Innovation

Neste MY Renewable Diesel is a HVO-type biofuel, which is derived from 100% renewable raw materials. The diesel has been shown to reduce greenhouse gas emissions by up to 90% compared to common diesel and Neste has calculated that in 2017 roughly 8.3 million tons of carbon emissions were cut by using the biofuel. For its production, Neste uses different vegetable oils and animal fats, which are mostly sourced in the form of waste and residues. What is more, the fuel has even been shown to outperform both conventional diesel and other biodiesels.

The low-carbon biodiesel is produced and distributed by Finnish energy company Neste. In fact, Neste was recently ranked the world’s second most sustainable company in the ‘2018 Global 100 Most Sustainable Corporations in the World index’ and Neste MY Renewable Diesel played an integral role in achieving this recognition. One of the biofuel’s main advantages over many other biodiesels is that no modifications to an engine are required for its use. Furthermore, it does not need to be blended with fossil diesel, but can safely be used in 100% concentration, whereas ethanol-based biofuels for instance can usually be blended only up to a maximum concentration of 7%. All these characteristics demonstrate the high potential for greenhouse gas emission reduction Neste MY Renewable Diesel can achieve.

Inspiration

The inspiration for Neste MY Renewable Diesel and Neste’s actions in support of sustainability in general lays in the wish to take responsibility in the fight against climate change and to “to create a healthier planet for future generations”, as Kaisa Lipponen stated in her interview. Neste tries to achieve this by mitigating society’s impact on the climate by reducing its carbon footprint and by helping cities and communities reach their environmental goals.

When Lipponen started to work for Neste, they “had the vision to become the world leader in renewable diesel. Responsibility was already one of the core values. Sustainability is now at the core of everything.” The Communications Director went on to explain that they are “increasingly exploring the development of more renewables. We have a lot of experience, expertise in how to offer sustainable solutions to cities and other segments. Sustainability, circular economies and climate change are key in all this. Our solutions can help our customers to find solutions to those challenges”.

Furthermore, Lipponen’s personal urge to play an integral part in preserving our planet became clear when she laid out that the most exciting part of her work at Neste is “the transformation that the company has seen over the past 10 years. […] I have been part of the growth that the renewable operations have seen from the beginning. Over the past ten years we have grown to become a global leader in renewables.”

Overall impact

The overall impact of Neste MY Renewable Diesel in terms of reducing greenhouse gas emissions is already substantial and has been growing steadily over the past years. Neste calculates that roughly 8.3 million tons of greenhouse gas emissions were cut in 2017 alone, which equals completely removing about 3 million cars from traffic. Furthermore, the biodiesel is currently being sold in Europe and North-America, where it helps businesses and communities reach their emission reduction targets in an easy and cost-efficient way. What is more, the biofuel can be used in diverse applications which include passenger cars, heavy duty vehicles, ferries, boats, public transport or even music festivals such as Helsinki’s Flow Festival.

As governments and businesses become increasingly aware of the necessity to cut greenhouse gas emission to contain humans’ impact on the climate, it appears evident that demand for solutions like Neste MY Renewable Diesel will only increase in the future. In fact, according to Lipponen, the demand for renewable diesel is already continuously increasing while the demand for conventional fossil fuels is stagnating or even decreasing. Due to this development as well as the biofuel’s versatility and cost efficiency, the potential for increasing sales from the 2017 level of 2.6 million tons, is substantial. This in turn will accelerate the biofuel’s overall positive impact on the environment even more.

Business benefit

Sustainability is key in Neste’s strategy and Neste MY Renewable Diesel is its most important sustainable solution. The amount of renewable diesel sold in 2017 was 2.6 million tons. This generated a revenue of approximately 3.2 billion euros, which resulted in a net profit of roughly 600 million euros from its renewable diesel business. When comparing these numbers with Neste’s total revenue of 18 billion euros, it becomes clear that the biofuel is integral for Neste’s business.

As mentioned before, demand for the product is expected to further increase over the coming years, as environmental regulations will become stricter. Neste has already strongly positioned itself in markets where this development is expected to be the most impactful. These markets include the Baltic area with its highly environmentally conscious countries such as Sweden and Finland, the rest of Europe, California in the United States of America as well as other areas within North America.

Furthermore, Neste’s focus on developing sustainable renewable fuels has equipped the energy company with a high level of expertise in the field. As Kaisa Lipponen points out, “this is only the beginning”, as Neste aims to utilise its competence to decarbonise other industries such as chemicals and plastics. What is more, Neste has already made use of its skills to develop a renewable fuel to be used in aviation. This goes to show that Neste MY Renewable Diesel has immensely benefited Neste’s business both directly and indirectly.

Social and environmental benefit

Climate change and specifically global warming is perhaps the biggest challenge society is facing. Greenhouse gases accelerate the greenhouse effect, which in turn leads to rising average temperatures around the globe. CO2 is one such greenhouse gas and in 2010 the transport sector was responsible for roughly 23% of global CO2 emission. Neste MY Renewable Diesel drastically decreases greenhouse gas emissions and thus represents a powerful tool to mitigate humans’ impact on the environment. For this reason, the innovation supports the SDG of ‘Climate Action’. As previously laid out, the innovation is also a cost-efficient alternative to conventional diesel, and thus it addresses the SDG of ‘Affordable and Clean Energy’. What is more, diesel is widely used in heavy duty vehicles, so changing to Neste MY Renewable Diesel represents a way for industrial companies to support the SDG of ‘Industry, Innovation and Infrastructure’. Finally, Neste’s biodiesel offers a low-threshold means for cities to reach their environmental goals, which is why the SDG of ‘Sustainable Cities and Communities’ is advanced as well.

It is clear that Neste MY Renewable Diesel cannot solve the threat the changing climate poses to our planet on its own, but it offers a convenient and cost-efficient tool to substantially cut greenhouse gas emissions for businesses, cities and average consumers alike. Paired with other innovations that help fight climate change, it might have an important part in averting the crisis human society and the planet at large will face, if nothing is done to preserve the environment.

Interview

Kaisa Lipponen, Director of Corporate Communications and Brand Marketing