Mundus Nordic Green News – 2 March, 2021

Neste's completes acquisition of Bunge plant in Rotterdam

Last November, Neste (of Finland) announced that the company would acquire Bunge Loders Croklaan's refinery in Rotterdam. The facility is located next to Neste's existing biorefinery and consists of a pre-treatment facility, storage, piers and a pipeline connection to Neste's facility. The acquisition has now been approved by the authorities and the transaction was completed on March 1, 2021. The transition will be completed in phases, and the full pre-processing capacity will be available for processing Neste's raw materials by the end of 2024. 

 

Neste is one of the biggest producers of biofuels in the world. Neste's President and CEO Peter Vanacker commented; “The acquisition of the production facility supports our global growth strategy in renewable products. This means that we can scale up our capacity to pre-treat renewable raw materials at a faster pace, and this in turn is an important driving force for increasing the use of raw materials based on waste and by-products, which also provides greater flexibility in the choice of raw material. We have a commitment to increase the proportion of waste and residual products in our mix of renewable raw materials to 100% by 2025. We will also expand our growth platform so that it can help our customers reduce their greenhouse gas emissions by at least 20 million tonnes annually by 2030.”

 

Norway highlights its interests in taxonomy debate

The EU’s proposed taxonomy classification has been the subject of much criticism in the Nordics, given differing attitudes and solutions to environmental issues. As Mundus Nordic Green News reported yesterday, 4 Norwegian ministers met their Commission counterparts. Following the meeting it was reported that the Norwegians expressed their view that the EUs criteria for hydropower were too strict and a new meeting has been called to discuss the issue. The Minister of Petroleum and Energy Tina Bru commented “We have expressed a concern that hydropower will have much stricter criteria than for example investments in solar cells or wind power will have. We experienced that there was a willingness to listen”.

 

Separately, Norway’s Prime Minister, Erna Solberg, published a post, together with fellow conservative leaders from other Nordic countries, which was picked up by the Norwegian Forest Owners Association. Solberg and her colleagues stated that “The taxonomy must be designed so that fossil-free energy production and forestry are classified as sustainable investments,” a clarity of message that was appreciated by the Forest Owners.

 

Risk of environmental devastation or price shock if climate targets are to be reached

Sweden’s Dagens Nyheter (DN) newspaper reported in depth on the options facing Sweden’s government, concluding that Sweden is facing difficult political choices when it comes to reducing emissions from vehicles. One option would be for sharply increased production of biofuels, with risk of harmful environmental effects, or a fuel price of SEK 50 per liter to reduce traffic.

 

DN explains that when one listens to the Government’s explanation it is easy to be lulled into a mistaken complacency by the nicely downward sloping charts of GHG emissions. However reality is far more complicated. Sweden currently produces only a fraction of the biofuel that will be needed for fuel change and 95% of the raw material is imported almost half of which is palm oil a highly questionable raw material that has contributed to the destruction of rainforests. The EU and Sweden agree that this cannot continue and will tighten regulations. 

 

But if the palm oil disappears, it must be replaced with something else, for example Swedish forests. But for that it requires new production facilities - urgently. As early as 2024, the fuel change will require almost twice as much biofuel as today. By 2030, an increase of over 160% is required. But there are arguments over whether there is sufficient biomass available, and the desirability of turning this into fuels.

 

Therefore it is questionable whether the investments will ever be made in biofuels production. If plants are not built, and Sweden intends to stick to its targets, then demand destruction is a logical alternative. As DN says, “In plain text: Price shock warning at the pump.” Unsurprisingly, this option is heavily criticized by stakeholders in sparsely populated parts of the country, where the car is the only option.

 

[Editors note: Mundus agrees with this analysis, and sees the Government’s transport fuels policy as challenging. See our blog for more]

 

Swedish government directs SEK 572 million for research on food, bioeconomy and rural areas

The Swedish Government has decided that SEK 117 million from the research and innovation policy bill will finance research on food, the bio-based economy and rural and regional development in 2021. In total, for 2021-2024 period, the investment amounts to SEK 572 million.

 

According to the press release, Research and innovation lay the foundation for Sweden's transition to a sustainable food system and are an important part of meeting the goals of the food strategy. The national research program will therefore receive SEK 75 million in 2021. Research and innovation are also needed to take advantage of the potential for the development of bio-based value chains from forests, agriculture, sea and water, as well as residual flows from industries and communities. Secured access to sustainably produced biomass from the forest, in line with the strategy for the national forest program, is sought, with SEK 30 million set aside in 2021.

 

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