Renewable fuels seen as rising in future
The market for renewable aviation fuel is still in its infancy, but it is expected to ramp up rapidly in the coming years as the air transportation industry moves to reduce its net carbon dioxide emissions, said Jeremy Baines, president of Neste U.S. Worldwide, Neste has a workforce of 5,000, and its U.S. operations employ about 340 people, including about 80 in Houston.
“There’s been a lot of talk about electrification, but the reality is there’s no electric cable long enough to power planes,” he said. “The only way we can enjoy the benefits of flying is if we make it more sustainable, and the only fuel that can do that is renewable aviation fuel.”
Baines recently spoke with the Houston Chronicle about the future of biofuels. Edited excerpts follow.
Q: After transitioning from a traditional oil and gas company to becoming one that gets 80 percent of your revenues from renewables, how does Neste plan to grow its business, across the United States? In Houston?
A:
We are certainly expecting strong growth, both in our Houston office and in our operations across the U.S. (Last year), Neste acquired Illinois-based Mahoney Environmental, one of the largest used cooking oil collectors in the U.S. We’re looking to expand that and are adding more jobs across the U.S.
We’re always looking for other opportunities to expand our physical presence or our capabilities in the Houston area. We’re definitely going to be adding more people (in 2021). Mahoney is planning to grow by 10 percent, and our Houston office is going to be expanding by at least 15 percent, with the known projects that we have.
Q: Can you describe the process for creating renewable diesel fuel from used cooking oil?
A:
The used cooking oil needs to be collected from tens of thousands of restaurants across the country. Imagine that you’re collecting from Burger King or Buffalo Wild Wings. First, you need to clean out all the food waste. Then, once you’ve collected it from tens of thousands of restaurants, it needs to be fed into an industrial process.
Renewable diesel is not the same as biodiesel. Renewable diesel uses a very similar technology to what you would find in a fossil fuel refinery. The big difference being that we’re not using any fossil fuels. All the carbon that we use was in the atmosphere at some stage.
Q: Where is the center of the current North American market for renewable diesel
fuel? Where do you see the expansion of the market in the future?
A:
The process is more expensive (than refining fossil fuels). The feedstock is a lot harder to collect, and it’s a lot harder to convert it into renewable fuel. But, because it reduces emissions and that emission reduction has a benefit in California, we are able to sell it in California at a competitive price to fossil diesel.
Renewable diesel can be used anywhere in the United States because it’s a drop-in fuel. You don’t need to do anything different. It uses the same logistics, the same technology. There’s nothing you need to change.
Q: You recently announced a deal with DHL Express to supply that carrier with sustainable aviation fuel. How does Neste view the market for that product?
A: That’s an exciting market. One of the big benefits of sustainable aviation fuel is it works in existing pipelines, in existing infrastructure and existing aircraft engines. The only thing you need to do is drop it in and fly. The market is still relatively small, but it’s an emerging mar
ket, a growing market not only in the U.S., but in Europe and Asia. This market is really on the point of taking off.
We’re working with Alaska Airlines, Jet Blue, American Airlines and some private aviation companies like Signature Flight Support and Net Jets. We
work with some of the courier companies. We see this for passengers, private plane passengers and for cargo.
At (Dallas-Fort Worth International Airport) we collect used cooking oil from all the concessions. That used cooking oil is then converted into fuel. In the future, we might even see some of the planes flying on converted used cooking oil from Dallas-Fort Worth.
Today it’s planes flying out of San Francisco, but we also hope to be able to bring that to Dallas-Fort Worth, or maybe even to the Houston airports.
Q: On Neste’s website, it’s stated that by 2022, the company plans to be able to produce over 1million tons of renewable aviation fuel annually. How does Neste plan to grow its production to meet that goal?
A: That’s equivalent to 515 million gallons of SAF. The majority of that will come from our Singapore refinery, which we’re in the process of expanding.
However, because of COVID, that increased production will be delayed until early 2023. Once that expansion comes online, we’ll have the ability to produce at least 340 million gallons of SAF annually, which is 10 times what we can produce today.
Q: How does Neste contribute to the fight against global climate change?
A: (In 2019) Neste helped our customers reduce their carbon dioxide emissions by about 9.6 million tons. Our vision is to get to 20 million tons by 2030. In that same time Neste wants to get to net-zero (carbon) production by 2030.
The world is looking for lowcarbon solutions. Over the next decade, we expect the demand for renewable diesel to increase fivefold in the United States. Add to that, Canada, Europe, etc., we see the market for liquid renewable fuels increasing enormously. We see that on land and in the skies and on the water, because all of those industries are looking to decarbonize.