Varo Energy to build $600 million SAF plant in Rotterdam

Gunvor CEO Torbjörn Törnqvist, left, and Varo Energy CEO Dev Sanyal sign an MOU Sept. 6 establishing the new SAF manufacturing partnership. (Photo: Gunvor)

Varo Energy announced Sept. 7 the construction of a large-scale sustainable aviation fuel (SAF) manufacturing facility at the Gunvor Energy Rotterdam site in the Netherlands, investing $600 million with the aim of helping its airline customers decarbonize.

This facility alone is expected to contribute up to 7 percent of the EU’s 2030 SAF target.

The 100 percent Varo-owned facility will feature a world-class pretreatment unit, guaranteeing renewable-feedstock flexibility and production-optimization capability.

The facility will have a total feedstock capacity of 350,000 metric tons per year with SAF production capacity of 245,000 tons (more than 80 million gallons) per year, alongside a mixture of bionaphtha and biopropane.

Production is expected to begin in late 2026, enabling Varo to contribute to the significant growth in European SAF demand expected in the coming years.

Aviation is a vital part of the global economy, connecting people and businesses around the world. But the industry is also one of the fastest growing sources of greenhouse-gas (GHG) emissions.

Through this investment, Varo is supporting the aviation sector’s decarbonization by manufacturing the SAF that airlines need to meet their targets.

This, according to Varo, is at the heart of its “Customer Lighthouses,” which the company established to support customers in the hardest-to-abate industries, such as aviation, in their energy transition.

The first of these was announced with Lufthansa and Varo in February.

Made from waste and renewable biomass sources, SAF is a viable and scalable low-carbon solution for the aviation sector.

This investment by Varo will provide more airline customers with access to SAF, which can be used in the current generation of aircraft and utilizes the current fueling infrastructure.

According to the International Energy Agency, European jet-fuel demand is set to grow by more than 20 percent over the next five years.

Located in Rotterdam at the center of one of the world’s major aviation hubs, Varo’s new SAF manufacturing facility will be well positioned to meet this demand growth, the company stated.

As well as benefiting from close proximity to major markets, the facility is also located alongside port infrastructure, wastewater treatment, and existing road, rail and pipelines, enabling SAF production and distribution.

In a scenario of European SAF demand hitting 3.5 million tons per year, this manufacturing facility alone could provide up to 7 percent of the EU’s 2030 SAF mandated target of 5 percent by 2030.

SAF is part of Varo’s biofuels business, one of the company’s five strategic growth pillars under its “ONE Varo Transformation” strategy, alongside biomethane and bio-LNG; hydrogen; e-mobility; and carbon removals.

These five pillars play to Varo’s traditional strengths while offering some of the most attractive low-carbon growth potential offered by the energy transition.

“The development of a large-scale SAF manufacturing facility in Rotterdam, at the center of one of Europe’s most significant aviation hubs, is an important milestone in the development of the ‘ONE Varo Transformation’ strategy,” said Dev Sanyal, CEO of Varo. “This $600 million investment strengthens our leading position in biofuels in Europe by adding SAF production to our portfolio of solutions and will provide our airline customers with an important route to decarbonization. With the potential to produce around 245,000 tons of SAF per year when it comes onstream in 2026, this new manufacturing facility alone will provide up to 7 percent of the EU’s 2030 SAF target. I would like to express my appreciation to Gunvor for the excellent cooperation and we look forward to working with them.”