HELSINKI: Finland's Neste Oil yesterday said it would spend 550 million euros ($814m) to build the world's largest biodiesel plant in Singapore to meet the growing but controversial demand for biofuels. Neste, which last year supplied about 14m tonnes of conventional fuel products, said the plant would have a design capacity of 800,000 tonnes a year, and use mostly palm oil as its raw material. "The investment forms part of Neste Oil's strategic goal of becoming the world's leading renewable diesel producer," the firm said.
The use of biofuels made from crops such as maize, sugarcane and vegetable oils is expected to rise rapidly in developed economies and is seen by many as a way to cut emissions of greenhouse gases and provide an alternative fuel source to crude oil, which has been pushing $100 a barrel this year.
Some environmentalists, however, dispute the greenhouse gas emissions benefits of biofuels and are alarmed by deforestation to increase palm oil output and the effect on food prices of the additional demand.
Earlier, Environmental group Greenpeace tried to prevent a tanker bringing palm oil to Neste's first biodiesel plant, which started earlier this year and is running at full capacity of 170,000 tonnes, in Porvoo, Finland. Neste's second biodiesel unit is due to start operations in 2009.
Construction of the plant in Singapore, which is close to major palm oil producers Malaysia and Indonesia, will begin in the first half of next year, with completion due by the end of 2010.
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