Renewable diesel: a key contributor to West Coast low-carbon markets Presented at PRIMA/ISCC Conference San Francisco, California April 6, 2017
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Neste in brief
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Neste in numbers Revenue $12.7 billion largest producer of renewable diesel Production capacity of renewable diesel: over 900 million gallons per year employees in 15 countries ~ 5,000 Several years in the Global 100 list most sustainable companies
Neste has been a leader in cleaner solutions throughout the years Lead-free and sulfur-free fuels Renewable Diesel Renewable Jet Fuel Low-sulfur marine fuel Renewable Propane 1980 2005 2007 2011 2013 2014 2015 2016
Renewable products refineries ~ 900 million gallons per year Porvoo, Finland renewable diesel refinery ~3 MMbbl/yr Singapore renewable diesel refinery ~8 MMbbl/yr Rotterdam, The Netherlands renewable diesel refinery alongside Singapore Biopropane will be available on the market during the year 2017 ~8 MMbbl/yr
Production based on proprietary NEXBTL technology Annual production capacity 2.6 million tons = 900 million gallons Meets ASTM D975 and CARB diesel specifications Fully fungible can use the existing petroleum diesel infrastructure Flexible and sustainable raw material base over 10 different feedstocks in use largest producer of renewable diesel
Diverse demand for Neste MY Renewable Diesel, as blending component and 100% use Commercial and municipal bus fleets Dump and garbage trucks Truck fleets Construction; Mining Aviation Marine Emergency generators Agricultural machinery
Low-carbon Neste MY Renewable Diesel is ideal for fleet operations and also a cost competitive fuel High performance Consistent quality, free of sulphur, oxygen, and aromatics. Together with a high cetane number of 75-85 the fuel ensures an efficient and clean combustion. Lower maintenance and operating costs Longer service and maintenance intervals than for other alternative fuels. Smaller environmental footprint Reduces greenhouse gas emissions by up to 80% in addition to sizable reductions in tailpipe emissions. 11 Long shelf life Can be stored over long periods of time with no deterioration in quality or water accumulation. Superior cold weather performance Suitable for very cold weather conditions. No matter the raw material, Neste guarantees its fuel will exceed cold temperature requirements. Easy switch; no additional investments Fleets can switch to renewable diesel overnight without any conversion of vehicles or to logistics systems.
Based on several scientific studies with different engines and aftertreatment system, Neste MY Renewable Diesel provides significant reductions in major air pollutants: Particulate matter (PM) -33% Nitrogen oxides (NOx) -9% Carbon monoxide (CO) -24% Hydrocarbons (HC) -30% A low-carbon, clean-burning premium diesel fuel
Neste MY Renewable Diesel is being used by cities, municipalities and corporations around the world; the number of neat users is growing steadily Renewable Fuel Endorsement * San Francisco Bay Area Super Bowl 50 Host Committee * This material is confidential and intended for *) Neste User internal of Neste use only Renewable Jet Fuel 13
Californian based Propel Fuels was the first retail chain in the world to sell neat Renewable Diesel to consumers Mary Nichols, CARB Chairman Stations across California
Neste MY Renewable Diesel is being used by UPS fleets operating in the USA since mid- 2015 UPS is planning to use up to 46 million gallons equivalents of renewable fuels over the next three years
Google's gbuses in Silicon Valley, California are running on neat renewable diesel gbuses shuttle employees from their homes in San Francisco and Oakland campuses 16
The City of San Francisco leapfrogged its efforts to protect the climate from harmful effects of diesel emissions by phasing out the use of petroleum diesel in their municipal fleet and replaced it with renewable diesel at the end of 2015 17
The City of Oakland began filling its vehicles with renewable diesel in order to reduce the emissions of their municipal fleet Oakland operates 250 diesel-powered vehicles and equipment Oakland has used 230,000 gallons of renewable diesel per year
The City of Walnut Creek is the first city in the US to convert its municipal fleet to renewable diesel The switch to renewable diesel in August emission by more than 60% They operate around 60 diesel powered vehicles and equipment
The City of San Diego has converted its municipal fleet to Neste MY Renewable Diesel Over 1,100 vehicles and equipment, representing approximately 25% of the city's fleet, run on renewable diesel
The City of Carlsbad has converted its municipal fleet to renewable diesel Carlsbad runs renewable diesel in a range heavyduty vehicles including fire trucks, dump trucks and vacuum trucks
The County of Sacramento has converted its municipal fleet to renewable diesel; reducing greenhouses gases by approx. 8,000 tons annually renewable diesel is used in a range of heavyduty vehicles including more than 400 municipal public works and specialty vehicles
Sustainability, raw materials and R&D We work continuously to offer cleaner solutions for our customers, reduce the environmental impact of our operations, and improve the sustainability of our supply chain.
Five California pathways can reduce carbon intensity up to 83% Currently Used Raw Materials in California GHG Emission Reduction Neste can produce high-quality renewable hydrocarbon diesel from more than ten different feedstocks on an industrial scale. Neste MY Renewable Diesel used in California may be produced produced from: Animal Fat Fish Fat Used Cooking Oil Technical Corn Oil Carbon Intensities of different raw materials under CARB LCFS: 102-83% Additional pathways are pending 17 33 34 37 39 CARB Diesel Used Cooking Oil Fish Fat North American Tallow Technical Corn Oil Global Animal Fat Units are all gco2e/mj
Broad range of renewable raw materials Animal fat from food industry waste Fish fat from fish processing waste Vegetable oil processing waste and residues (e.g. PFAD, PES, SBEO) Used cooking oil Technical corn oil Crude palm oil Rapeseed oil Soybean oil Camelina oil Jatropha oil Neste uses bio-based ethanol from the global market as a bio-component in gasoline. The company also uses tall oil pitch at its refinery in Naantali, Finland.
Waste and residues form nearly 80% of our renewable raw material inputs Renewable raw material mix 2016 21 % Waste and residues (e.g. waste and residue fats from food processing, technical corn oil) Other vegetable oils In 2015, we achieved capability to use solely waste and residues as raw materials in our processing. 79%
Our approach to sustainability Neste Sustainable Way includes: Cleaner solutions Safety Our people Society Climate and resource efficiency Sustainable supply chain Neste has been chosen for the Global 100 list and the Dow Jones Sustainability Index for many years.
All renewable raw materials sustainably produced All renewable raw materials used by Neste are traced back to the land or production plants Traceability ensures renewable raw materials are sustainably produced and production human rights or endangered rainforests or carbon-rich areas Taking leadership in sustainability practices is essential to growing acceptability of renewable feedstocks
Cutting-edge research Continuous research to expand renewable raw material base and further develop NEXBTL technology 70% approx. euro 41 million of R&D costs in 2015 Cooperation with over 20 research institutions around the world Approx. 1,000 people working with research and engineering
Expanding our raw material portfolio Short term Long term Waste animal fats, waste oils, residue and side streams Biological pathways Thermo-catalytic pathways Photosynthesis
Renewable Jet Fuel: A Solution for Sustainable Aviation
The case for renewable jet fuel Aviation is a significant source of GHG emissions Aviation accounts for 2% of global GHG emissions and 10% of all transportation emissions The aviation industry will continue to grow Air traffic is expected to double in 15 years The industry realizes that continued growth must be sustainable Potential benefits include approvals to grow, improved brand image, new revenue streams, price diversification, incentives Airlines, airports and OEMs are pulling all levers to lower their carbon and emission footprint Improvements in aircraft technology, operations, air traffic management Renewable jet fuel must be part of the solution Renewable diesel assets can be utilized to produce renewable jet fuel
Neste Renewable Jet Fuel Offers airlines an easy way to cut their emissions Compatible with existing jet engines High energy content (MJ/kg), no aromatics, reduces CO2 and sulphur emissions Complies with ASTM D7566 specification (Annex A2 HEFA) Already available at industrial scale
Neste Renewable Jet; proven high-level performance that has been used on over 1,000 Lufthansa flights 1,187 Lufthansa flights 1,600 tonnes of blended fuel 1,500 tonnes reduction in GHG emissions 1% better fuel consumption 0 quality issues
In January 2016, Oslo Airport offered Neste MY Renewable Jet Fuel via the hydrant system Neste has produced renewable jet fuel to be used by airlines Lufthansa, KLM and SAS at Oslo airport The fuel is transferred to Oslo as a 50% blend with conventional jet fuel For the first time, renewable jet fuel is delivered into-plane via the airport's hydrant system The fuel was produced in Porvoo, Finland, as part of the EUfunded ITAKA* project The feedstock is 100% certified camelina oil * http://www.itaka-project.eu/default.aspx
The next development of HEFA: HEFA+ renewable jet fuel should accelerate use The airplane performed as designed with the green diesel blend, just as it does with conventional jet fuel. This is exactly what we want to see in flight tests with a new type of fuel." Captain Mike Carriker, Chief Pilot Boeing Product Development and 777X describing test flight with 15% HEFA+ supplied by Neste, Dec 2014 HEFA+ is HEFA with a slightly higher freezing point Supply should increase as more efficient to produce Will be used at lower blend levels: likely max 15% HEFA+ vs. max 50% HEFA. Boeing is leading the effort for HEFA+ specification Neste is supporting with supply of fuel and testing Research report was issued in November 2016 and Version 3 is being issued for review
Renewable plastics
Bioplastics cooperation with IKEA What are the goals? IKEA is committed to using 100% renewable or recycled plastics in home furnishing by 2020 We aim to produce plastics and other materials by replacing virgin fossil feedstock with renewable or recycled waste and residue raw materials How are Bioplastics produced? IKEA and Neste will work with a number of partners in the supply chain When will we hear more? We aim to produce the first proof-of-concept during 2017
Pre-order the Future Project to investigate the future of renewable materials and use of technology through product development. Engage audiences in finding bold and innovative solutions to create new kind of renewable products and services for more sustainable future. Future of Public Space Entertainment Travel Mobility Education 39
The Winning Concept: EduCycle EduCycle is an augmented reality game for educating school children about the carbon cycle and the effects of their choices on the environment. A prototype has already been developed and tested and launched in San Francisco on March 30, 2017 40
The Stone Age did not end for a lack of The world is not running out of fossil fuel anytime soon. But the environmental impact of GHG emissions means we cannot burn it all. CO 2 emissions potential of fossil fuel reserves compared to the 2ºC global carbon budget until 2050 Emissions caused by fossil fuel use 19902015 2,800 Gt CO 2 670 Gt CO 2 420 Gt CO2 Emission potential of proven global fossil fuel reserves The maximum amount of fossil fuel emissions until 2050 before reaching 2ºC carbon budget Source: IEA, World energy-related CO 2 emissions, 2016; Carbon Tracker Initiative, Unburnable Carbon markets carrying a carbon bubble?, 2014 41
Thank you Neville Fernandes Houston, Texas Neville.Fernandes@neste.comyou