Neste Oyj (international name: Neste Corporation; former names Neste Oil Corporation and Fortum Oil and Gas Oy; Finnish pronunciation:[ˈneste]) is an
oil refining and marketing
company located in
Espoo,
Finland. It produces, refines and markets oil products, provides engineering services, and licenses production technologies. Neste has operations in 14 countries.[2]
Neste
shares are listed on the
Nasdaq Helsinki. As of 2022, the Prime Minister's Office of Finland is the largest
shareholder in the company, owning 35.91% of shares.[3]
In 2021, Neste was the third largest company in Finland in terms of
revenue.[4]
Neste was founded in 1948 as the State petrol company of Finland with the purpose to ensure the availability of refined fuels in Finland. The company's headquarters was established in Espoo.[5]
In 1955,
Uolevi Raade became the company's
CEO.[5] In 1957, the first oil refinery in Finland was built at
Naantali using US technology.[6][7][8] The
Porvoo refinery was built in 1965 in Sköldvik (Kilpilahti).[6] Originally, much of the oil refined was of
Soviet origin, though
North Sea oil was used after the collapse of the USSR.[9]
In 1971, Neste acquired half of
Kesko-owned Kesoil.[10]
In 1991, Neste became the majority owner of Finnoil. Kesoil also became a wholly owned
subsidiary. In 1992, Union service stations became Neste service stations. The following year the same happened to Finnoil service stations.[13]
In 1994, Neste began as the main
sponsor of a competition previously known as the
Finnish Rally and renamed
Neste Rally Finland. In October 2020, Neste ended its 26-year title sponsorship.[15][16]
In 1998, Neste
merged with the power company
Imatran Voima Oy to create
Fortum Oyj. After the merger the chemical operations of Neste were transferred to the newly established company
Neste Chemicals, which was sold to the investment firm
Industri Kapital for $535 million.[17] In 1998, Kesoil service stations also became Neste stations.[13]
An engineering joint venture, Neste Jacobs Oy, was established with the
AmericanJacobs Engineering in 2004.[18] In May 2004, Fortum Oil and Gas Corporation was split into two: the company's oil business was renamed Fortum Oil Corporation and other operations renamed Fortum Heat and Gas Corporation.[6] Fortum Oil Corporation was a subsidiary of Fortum Corporation.[19]
2005–2014 (Neste Oil)
In the spring of 2005, Fortum Oil Corporation was
demerged from Fortum, becoming the Neste Oil Corporation.[19]
Neste Oil Corporation was listed on the Helsinki Stock Exchange in June 2005.[19] Risto Rinne started as Ihamuotila's successor and CEO.[20]
A renewable
diesel plant, using second generation
biofuels and
NEXBTL technology and located at the Porvoo refinery, was brought on stream in 2007, together with a new conventional diesel production line.[21] In the same year, the entire
bus fleet of
Helsinki Region Transport switched fully to diesel produced using NEXBTL technology. Experiments by Neste,
VTT Technical Research Centre of Finland and Proventia showed that local emissions decreased significantly after the switch, with overall particle emissions decreasing by 30% and
nitrogen oxide emissions by 10%, with excellent winter performance and no problems with
catalytic converters.[22][23] A second renewable diesel plant at Porvoo became operational in 2009.[24]
In 2007, Neste started a research program on
algae, but this was discontinued in 2015. In 2019, the research program restarted to investigate the production of
aviation fuel from algae and
municipal solid waste.[25]
In 2008, Rinne retired, with Matti Lievonen succeeding him as CEO.[26]
In 2011, a plant similar in size to the Singapore plant was launched in
Rotterdam,
Netherlands.[29] Its investment costs amounted to 670 million euros.[30]
In 2015 the company's name was changed from Neste Oil back to Neste to emphasize the company's focus on the
renewable energy business.[35][36][37]
In 2017, Neste acquired Jacobs Engineering's 40% stake in Neste Jacobs and gained full control of the company. After the takeover, Neste Jacobs was renamed Neste Engineering Solutions Oy.[18]
When CEO Lievonen retired in November 2018, he was followed by the
Belgian-
German Peter Vanacker.[26]
[38] In June, Neste and
LyondellBasell announced the commercial-scale production of bio-based
plastic from renewable materials.[39]
In March 2020, Neste invested in German Sunfire, a company developing high-temperature
electrolysis technology.[42] In September, Neste sold its 49.99% stake in
Nynas to Bitumina Industries, and began closure-related negotiations for the
Naantali refinery.[43][44] The refinery was planned to close by the end of March 2021.[45] As part of the cooperation, Neste produces
hydrocarbons from renewable raw materials as a feedstock to manufacture
phenol by Borealis. Phenol is used by Covestro to produce
polycarbonate plastics, which would primarily be used for car
headlights and window coatings.[46][47]
In December 2021, CEO Vanacker resigned to become the CEO of
LyondellBasell.[48] Matti Lehmus became CEO in May 2022.[49]
Neste's operations are divided into marketing and services, oil products, renewable aviation, renewable polymers and chemicals, and renewable road transportation units, as well as managing an operating platform.[51]
In 2015, two renewable diesel production lines in Porvoo produced 0.525 million metric tonnes of renewable diesel, which was approximately one fifth of the diesel consumption of Finland.[53][54][55] Neste's production facility in Singapore is the largest renewable diesel refinery in the world, with an annual capacity of 1.1 million metric tonnes.[56] A planned new production line is expected to increase its capacity by one million tonnes in 2022.[56]
Neste's refinery feedstock includes of
crude oil and renewable raw materials, such as used
cooking fat, waste
animal and
fish fat from the
food industry,[44] waste and residues from
vegetable oil production, technical
corn oil, palm oil,
rapeseed oil, and
soybean oil.[57] About 80% of renewable feedstock is waste and residue fats and oils.[58] Neste also researches the use of community waste, algae,
lignocellulose,[44] and liquefied waste plastic as feedstock.[58] In 2019, most of the crude oil used by Neste came from Russia.[57]
Neste produces
gasolines,
diesel,
aviation and
marine fuels, light and heavy fuel oils, base oils, gasoline components, special fuels and solvents.[59][60] LPGs,
carbon dioxide, and
sulfur are sold as by-products. Neste's products include dozens of types of gasoline and more than a hundred end-products.[61] In 2017, Neste was the world's largest producer of renewable diesel, producing 2.6 million tonnes per year.[62]
Neste has developed the proprietary
NEXBTL technology for the production of
renewable fuels.[63] Renewable diesel is a
hydrodeoxygenatedparaffinic fuel, which can be used in conventional diesel engines without engine modifications.[64]
Aviation biofuel
Neste's
sustainable aviation fuel (SAF) is a drop-in fuel, which can be mixed with
kerosene to produce a mixture that contains at least 50% kerosene.[65] Among others, it is used by
Lufthansa and the Swedish
Air BP.[65] In 2019, Neste produced about 100,000 tonnes of sustainable aviation fuel[65] and plans to produce around 1.5 million tonnes per year by 2023.[66]
Service stations
Neste owns a chain of
service stations, which is the largest in Finland.[67] In 2020, Neste had station chains consisting of more than 800 traffic and automatic stations in Finland,
Estonia,
Latvia and
Lithuania.[68][69]
Corporate issues
Shareholding
As of 31 May 2022, the five largest shareholders of Neste were:[3]
Ilmarinen Mutual Pension Insurance Company (1.28%)
Kela, the Social Insurance Institution of Finland (1.03%)
Recognition
Neste was ranked Finland's most respected service station brand in a survey of Finnish brands carried out by
Taloustutkimus and
Markkinointi & Mainonta in Summer 2013.[70]
In February 2014, Talouselämä magazine named Neste's NEXBTL renewable diesel as the most groundbreaking Finnish business innovation of the new millennium.[71]
Neste was ranked the second most sustainable company in the world on the 2018 Global 100 index ranking by
Corporate Knights, a financial information company.[72][73]
Neste has a target to make its production
carbon neutral by 2035.[7]
Palm oil
Neste has been criticized for using
palm oil and palm fatty acid distillate, a by‐product of physical refining of crude palm oil products, as a part of its feedstock for renewable products.[58][76] Critics include of
WWF,[76]Greenpeace,[77] Biofuelwatch[58] and
Milieudefensie,[78] among others.
Neste consumes 1–2% of the world's total
palm oil production.[58] In 2016, less than 20% of renewable raw materials used by Neste was crude palm oil.[79] Crude palm oil used by the company has been traceable to the oil palm plantation level since 2007, and has been 100% certified since 2013.[79] However, certification does not apply to palm fatty acid distillate.[58] Since 2016, Neste has published information about all its crude palm oil suppliers on its website.[79]
In 2018 Biofuelwatch stated in their annual report that Neste meets
EU sustainability standards for biofuels by sourcing palm oil from older plantations, commonly ones for which
rainforest was destroyed before 2008. However, it cannot guarantee that all of its crude palm oil is free of effects from more recent or ongoing deforestation.[80] Greenpeace has issued[81] similar concerns about Neste's palm oil usage after an investigation by
MapHubs showed that Neste's supply chain for palm oil includes
Indonesian palm mills creating the most
orangutan habitat loss.[82][83]
Neste has been a target of sustained attacks, including publicity campaigns.[84] In January 2011, Neste won the
Public Eye Awards.[85] Neste also attempted to shut down a
parody website launched by Greenpeace;[86][87] however, the
World Intellectual Property Organization rejected the trademark-based complaint, since the page is noncommercial, gives no economical benefit, is not misleading, and follows the guidelines of
freedom of speech.[88]
Used Cooking Oil
In November 2022, it was announced Neste had acquired the
used cooking oil (UCO) collection and aggregation business and related assets in the US from Crimson Renewable Energy Holdings, LLC. The transaction includes shares in SeQuential Environmental Services LLC, and Pure LLC, as well as a UCO processing plant in
Salem, Oregon.[89]
^
abc"Öljyn pyörteissä – Nesteen tarina" [In the Swirls of Oil - The Story of Neste]. Frack Media (in Finnish). 3 November 2015. Archived from
the original on 3 November 2015. Retrieved 19 November 2020.
^Greenpeace parodiasivu suututti Neste Oilin, Nesteen mielestä Nestespoil-sivu loukkaa sen tavaramerkkiä, Greenpeace taas pitää sivun sulkemisyrityksiä sensuurina HS 22 May 2012 B10