Latest news with #Neste
Straits Times
07-08-2025
- Business
- Straits Times
Flying greener will come at a price, industry players warn
Sign up now: Get ST's newsletters delivered to your inbox Because of limited availability and the high cost of production, sustainable aviation fuel is two to three times pricier than normal jet fuel. SINGAPORE – Consumers will need to accept that there is added cost to flying greener, as the price of less polluting jet fuel made from waste materials, such as used cooking oil, will not fall to that of regular fossil fuels any time soon. But if investments in sustainable aviation fuel are not made today, there could be more to pay later as the planet warms. DHL Express Singapore managing director Christopher Ong made this point during a media visit on Aug 7 to the parcel delivery giant's facility in Changi Airfreight Centre which was jointly hosted by Finnish renewable fuel producer Neste. The two companies inked a deal in July for DHL Express to use sustainable aviation fuel made in Neste's refinery in Singapore on cargo flights out of Changi Airport until June 2026. Similar moves have been made by carriers like Singapore Airlines Group and Dubai-based Emirates previously, but on a smaller scale. In total, 7,400 tonnes of sustainable aviation fuel, or around 9.5 million litres, will be supplied to DHL Express, accounting for 35 to 40 per cent of the total fuel used by its fleet of five Boeing 777 freighters here. This is the largest purchase of sustainable jet fuel in Asia by volume so far. Top stories Swipe. Select. Stay informed. 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He believes that the price premium for greener fuels will narrow over time as production grows, but he said there are no estimates today that suggest that sustainable fuel will ever get to the same price as regular jet fuel. 'I think it is a future we need to accept – that this will be more expensive,' he said. The cost of sustainable aviation fuel is among the major barriers that have limited its widespread adoption. Because of limited availability and the high cost of production, such fuels are two to three times pricier than normal jet fuel today. Neste's Asia-Pacific head of public and regulatory affairs, Mr Steven Bartholomeusz, said sustainable fuels have environmental attributes that fossil fuels do not. For instance, apart from having a lower carbon footprint, sustainable aviation fuel has been shown to produce less soot than conventional jet fuel. In the past couple of years, Neste has faced a more challenging market amid weak demand and increased production capacity from other firms. This has pushed the price of renewable fuels down and raised demand for the raw materials needed to produce such fuels, squeezing earnings. Mr Bartholomeusz called for more 'demand certainty', noting the €1.6 billion (S$2.3 billion) Neste invested into expanding its Singapore facility. 'You can't make that kind of investment purely on the basis that you will have a company like DHL come along and (voluntarily) take our volume,' he added. Neste's refinery in Tuas can produce up to a million tonnes of sustainable aviation fuel, making it the largest of its kind in the world. But this capacity has not been fully utilised. In the first half of 2025, Neste produced 497,000 tonnes of sustainable aviation fuel across all of its refineries globally. Things are set to change in Singapore in 2026, when all flights departing the city-state must use sustainable jet fuel , with an initial national target of 1 per cent use. Passengers will be charged a levy, which will be used by the Government to buy the fuel needed to meet this target. Early government estimates suggest that economy-class passengers may have to pay $3 more for short-haul flights, $6 more for medium-haul flights, and $16 more for long-haul flights. Mr Bartholomeusz said the reality is that the world needs more sustainable fuel manufacturing to reach its 2050 net-zero goal, and policies like Singapore's 1 per cent target help drive the industry forward. In response to earlier queries, CAAS chief sustainability officer Daniel Ng told The Straits Times that the authority is developing the legislative framework and operational details for the levy, in consultation with the industry. Asked if Neste plans to expand into other locations in South-east Asia, Mr Bartholomeusz said the company has no such investment plans for now. 'We have capability here to meet the sort of demand that we see at present in this part of the world,' he added.
Newsroom
30-07-2025
- Business
- Newsroom
Fuelling New Zealand's aviation future
Comment: When I board my flight from Wellington to Sydney, I'm not just thinking about the meetings ahead. As CEO of a transport energy company, I'm acutely aware that the fuel powering that aircraft represents one of our greatest decarbonisation challenges. New Zealand is a geographically remote island, which means air travel is vital to our connection with the rest of the world. Tourism also makes up an essential part of our economy. The overwhelming majority of visitors get on a plane to visit and air transport enables the export of some of our most valuable products to customers across the globe every day. While critical, its contribution to carbon emissions is a challenge that needs to be addressed. Aviation accounts for around 2-3 percent of global carbon emissions, but unlike road transport where we're seeing the adoption of electric vehicles, the technology pathway for low-carbon aviation is far more challenging. There is no battery technology currently on the horizon to power long-haul international flights. For the foreseeable future, if we want to keep flying, we need liquid fuels. Beyond changes such as reducing flights or deploying more efficient aircraft, airlines are looking to alternative jet fuel options, such as sustainable aviation fuel (SAF), as the most viable solution currently available for a lower-carbon emission future in air travel. SAF is an industry term used for a form of alternative jet fuel made using feedstocks such as forestry residues, municipal waste, or used cooking oils with the goal of reducing the lifecycle carbon footprint of jet fuel. SAF is most typically used by international airlines when blended with conventional jet fuel to form part of the overall fuel mix and is considered as a 'drop‑in' fuel, meaning it can be used in an existing aircraft fleet. SAF was first used in New Zealand in September 2022, when Z, in partnership with Air New Zealand and Neste, imported 1.2 million litres – enough fuel to power approximately 400 return flights between Wellington and Auckland. This remains the largest SAF shipment New Zealand has made to date. The aviation sector globally is showing growing interest in SAF. Some airlines have set carbon emission reduction targets, passengers are increasingly conscious of their carbon footprints, and international regulations are generally evolving towards tighter environmental standards. Yet today, SAF represents less than 1 percent of total aviation fuel use worldwide, primarily due to limited supply and high costs. One of the biggest challenges for SAF production is getting enough of the right feedstock (raw material from which fuels are produced). There are several different feedstocks that are commonly used, such as tallow and vegetable oils. Other feedstocks such as woody biomass or hydrogen can technically be used, however these can be harder or more costly to manufacture. The additional layer of complexity with any feedstock is that many have alternative uses in the energy transition, so the best use case for each feedstock needs to be taken into consideration as countries and industries navigate the energy transition. For me it isn't a question of if we need SAF in New Zealand, but how we will be able to successfully establish its supply for the domestic and Trans-Tasman markets when international demand for the product is increasing. At Z, we've spent considerable time over the past few years working with industry partners across Aotearoa to understand what it would take. Our conclusion is clear: we need supportive policy settings to give industry the confidence to invest, combined with strategic partnerships and economies of scale that can deliver SAF reliably and in the most cost-effective way to our airline customers. The global policy race is already underway All of New Zealand's top 10 trading partners now either have SAF-supportive policies in place or have shown support for it. Many countries already have minimum SAF-blending requirements, and over time, market access may depend on meeting these requirements. Without action to establish policy settings that create a level playing field, our region risks losing competitiveness, increased exposure to offshore compliance costs, and being shaped by policies set by others. The call for supportive policy settings extends beyond Z. Air New Zealand's public support for a SAF mandate last year reflects broader industry recognition of what's needed. We're continuing to collaborate with fuel supply chain partners, airports and airlines and their representative groups to help inform the Government on policy settings that aim to keep New Zealand competitive in an increasingly regulated global aviation market. Collaborative advantage Z's view is that New Zealand's approach to SAF should play to our strengths – our strong relationships, particularly our Trans-Tasman connections, may allow us to access SAF supply more effectively than attempting to build domestic production capacity from scratch. That is why Z is looking to our parent company Ampol, to see what opportunities we can leverage with our joint scale. Ampol's Memorandum of Understanding with GrainCorp and Industry Funds Management Investors (IFM) to explore the establishment of an integrated renewable fuels* industry presents one possible opportunity. The initial priority under the memorandum saw Ampol and IFM progress a feasibility assessment of a renewable fuels facility at Ampol's refinery in Brisbane and work with GrainCorp to explore the supply of homegrown feedstocks, including additional crushing capacity to supply canola oil to the potential future plant. The feasibility work for the plant is now complete, and the project has moved into the next phase of pre-FEED (front-end engineering and design). The project is still very much in its infancy, with much progress to be made before it's determined viable, but it's a step in the right direction. It's not the only project on the table, there are others exploring similar opportunities, and every initiative will keep more options on the table to hopefully see the industry create a viable market in the future. The opportunity remains New Zealand needs to evaluate any SAF policy announced in Australia and be ready to consider how it might be mirrored or adapted for the New Zealand market. This isn't just about following Australia's lead; it's about ensuring we don't create unnecessary barriers that fragment what could be a unified Trans-Tasman market. When policies are aligned, this will help investment stay in our region. Aotearoa New Zealand has a genuine opportunity to be part of building a thriving SAF market that could benefit our aviation sector, climate goals and economic competitiveness. *Note: 'Renewable fuels' is an industry term used for liquid hydrocarbons made from non-petroleum-based renewable feedstocks such as purpose-grown biomass, or from waste material such as tallow or used cooking oil. It includes sustainable aviation fuel and renewable diesel.
Yahoo
24-07-2025
- Business
- Yahoo
Finland's Neste tops earnings forecast on soaring SAF sales
(Reuters) -Finnish biofuel maker and oil refiner Neste reported stronger than expected core earnings for the second quarter on Thursday, citing soaring sales of sustainable aviation fuel (SAF) aided by increased production capacity. Neste's comparable quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) rose 42% from a year earlier to 341 million euros ($401 million). Analysts in a company-provided consensus had expected 302.5 million euros on average. "Our sustainable aviation fuel sales increased close to 80% quarter on quarter, benefiting from additional SAF production capacity at our renewables refinery in Rotterdam," CEO Heikki Malinen said in a statement. The rise in SAF sales drove the sales volume in Neste's renewable products unit to a new quarterly record of 1,096 thousand tonnes. The unit's sales volume margin fell 5% to $361 per tonne, but exceeded analysts' forecast of $329 per tonne. "We saw positive developments in the biofuel regulation both in the US and EU, largely supporting long-term renewables demand," Malinen said. Hovever, he warned that the market environment was volatile and headwinds from global trade tensions were expected to continue. Neste has been battling an excess supply in the renewable fuels market, pressuring its sales volumes and leading to a reduction of around 510 jobs globally earlier in 2025. Alhough the group said it still expected its annual sales volumes to improve from 2024, it also forecast persisting oversupply in the renewable fuels market for the year. Oversupply, weak demand and high input costs had made Neste cut its forecast for the renewables sales margin three times in 2024. ($1 = 0.8500 euros) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
24-07-2025
- Business
- Reuters
Finland's Neste tops earnings forecast on soaring SAF sales
July 24 (Reuters) - Finnish biofuel maker and oil refiner Neste ( opens new tab reported stronger than expected core earnings for the second quarter on Thursday, citing soaring sales of sustainable aviation fuel (SAF) aided by increased production capacity. Neste's comparable quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) rose 42% from a year earlier to 341 million euros ($401 million). Analysts in a company-provided consensus had expected 302.5 million euros on average. "Our sustainable aviation fuel sales increased close to 80% quarter on quarter, benefiting from additional SAF production capacity at our renewables refinery in Rotterdam," CEO Heikki Malinen said in a statement. The rise in SAF sales drove the sales volume in Neste's renewable products unit to a new quarterly record of 1,096 thousand tonnes. The unit's sales volume margin fell 5% to $361 per tonne, but exceeded analysts' forecast of $329 per tonne. "We saw positive developments in the biofuel regulation both in the US and EU, largely supporting long-term renewables demand," Malinen said. Hovever, he warned that the market environment was volatile and headwinds from global trade tensions were expected to continue. Neste has been battling an excess supply in the renewable fuels market, pressuring its sales volumes and leading to a reduction of around 510 jobs globally earlier in 2025. Alhough the group said it still expected its annual sales volumes to improve from 2024, it also forecast persisting oversupply in the renewable fuels market for the year. Oversupply, weak demand and high input costs had made Neste cut its forecast for the renewables sales margin three times in 2024. ($1 = 0.8500 euros)
Business Times
15-07-2025
- Business
- Business Times
DHL Express and Neste sign deal for 7,400 tonnes of sustainable aviation fuel
[SINGAPORE] Finnish oil and fuel producer Neste will provide 7,400 tonnes, or around 9.5 million litres, of sustainable aviation fuel to parcel-delivery giant DHL Express in Singapore. By volume, the contract is one of the largest of its kind for the air cargo sector in Asia, and will last from July 2025 to June 2026. DHL Express did not comment on the cost of the deal. Neste will supply the fuel from its refinery in Singapore to five Boeing 777 freighters that operate from DHL Express' South Asia Hub at Changi Airport. The fuel provided will account for around 35 to 40 per cent of the total used by the fleet. The use of sustainable aviation fuel is expected to reduce carbon emissions from the fleet by around 24,000 tonnes over the duration of the contract. Reliance on this type of fuel is expected to increase in the region in the coming years as countries introduce usage targets for sustainable aviation fuel to reduce emissions in their aviation sectors. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up For example, Singapore aims for a 1 per cent target beginning in 2026, raising it to 3 to 5 per cent by 2030. Both India and South Korea aim for departing international flights to use 1 per cent of sustainable aviation fuel from 2027. Additionally, the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation, which will require airlines to offset their carbon emissions from flights, comes into force in 2027. In January, DHL Express signed its first sustainable aviation fuel deal in Asia with Cosmo Oil Marketing for the supply of 7.2 million litres of the fuel to its air freighters in Japan, beginning in April. In May, Singapore Airlines Group signed a deal with Neste for 1,000 tonnes of sustainable aviation fuel.
