Neste revises climate targets

Renewable diesel and sustainable aviation fuel (SAF) producer Neste announced Dec. 15 that it is revising some of its climate targets due to the company’s current financial position and streamlined investment portfolio.

Reaching the original climate targets by the previously communicated “very ambitious” target years would have required significant investments that are currently not realistic, Neste stated.

Neste said it continues to drive growth in renewable fuels, however, providing alternatives to fossil fuels to mitigate climate change.

Instead of reaching carbon-neutral production by 2035, Neste is now setting a carbon-footprint target of reducing greenhouse-gas (GHG) emissions in its own operations (scope 1 and 2) by 80 percent by 2040.

The timeline for the related interim target of 50 percent emission reduction is extended from 2030 to 2035.

With these changes, Neste said it is focusing solely on absolute emission reductions in its own operations and removes the option of using emission compensation from its climate target setting.

Two of Neste’s climate targets remain unchanged: the carbon-footprint target to reduce the use-phase emission intensity of sold products by 50 percent by 2040, and the carbon-handprint target to help customers reduce their GHG emissions by 20 million tons annually by 2030.

The respective reference years 2019 and 2020 have not been changed.

“The company’s original targets to reduce its carbon footprint were based on a plan to transform Neste’s Porvoo refinery into a renewable and circular solutions refining hub by 2035,” said Neste CEO Heikki Malinen. “Since we announced the delay of Porvoo refinery transformation earlier this year, we have conducted a careful assessment of our climate targets to ensure they are ambitious but realistic. Neste’s current financial position does not allow further major capital expenditure beyond the ongoing 2.5-billion euros (USD$2.94 billion) investment in expansion of our renewables refinery in Rotterdam. As investment projects in our industry take years to complete, the timelines of our climate targets have to be delayed under the current circumstances.”

In the short term, Neste’s climate footprint-mitigation actions focus on energy-efficiency and operational-excellence measures as well as evaluating alternatives to fossil hydrogen.

Neste’s planning and development work to gradually convert the Porvoo refinery will continue, and the timeline for transitioning from crude oil to processing renewable and circular raw materials will be determined in line with the actual fuel-market demand, legislation and technological development, the company said.

“For the time being, fossil fuels are needed, among other things, to ensure security of energy supply in Finland,” Neste stated.

Malinen added, “Neste continues to provide its customers and consumers alternatives to fossil fuels, and our continuing investment in the world’s largest renewable fuels refinery in Rotterdam underlines our commitment to this. We have also been able to reduce GHG emissions in our own operations by 24 percent since 2019, despite increasing our production of renewable fuels. We continue our efforts to contribute to mitigating climate change, while at the same time ensuring sustainable financial performance and long-term success.”