Biodiesel remains a key growth area for Finnish company Neste Oil

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Biodiesel remains a key area for growth for Finnish company Neste Oil. According to a report from Derunlin on January 18, while other biodiesel producers are concerned that rising raw material costs could erode their profit margins, biodiesel continues to be a crucial area of growth for Neste Oil. The company will focus on biodiesel in the coming years. Risto Rinne, president of Neste Oil, said that with the help of advanced technologies, Neste Oil can now choose to use different raw materials, from the currently expensive palm oil to cheaper animal fats, which will help maintain production profitability. Palm oil is currently the most widely used raw material for biodiesel. In 2007, the benchmark contract price for crude palm oil futures on the Malaysia Derivatives Exchange (BMD) rose by about 50%, forcing some biodiesel producers to seek alternative raw materials and delay the construction of new plants. Rinne said that efforts are being made worldwide to control climate change, so the demand for biofuels is expected to increase. This will also contribute to the development of the global biodiesel market, meaning that the global demand for biodiesel or biofuels will rise. NesteOil will begin construction of the world’s largest biodiesel plant in Singapore in the first half of this year, with operations expected to start in 2010. NesteOil will invest 550 million euros in this project; once completed, the plant will have an annual production capacity of 800,000 tons. It will be mainly sold to Europe and the western coast of the United States. Japan will be a potential large market. In other parts of Asia, China may also become a major market. China **is working to promote environmentally friendly fuels.