How is Sustainable Aviation Fuel (HEFA SAF) made?
Sustainable Aviation Fuel (SAF) is the future. Without it, aviation has no chance of meeting net-zero targets by 2050. SAF Investor visited Neste’s Rotterdam refinery to find out how it is made.
Unless you are a petroleum engineer, you could spend days staring at Neste’s Rotterdam refinery trying to understand how it works. The scale is staggering. There are kilometres of pipes. Big pipes. Little pipes. Shiny steel pipes. Pipes covered with green insulation.
It is modern alchemy. Neste takes used cooking oil and waste fats and turns them into fuel. As a banner in the office says: “Why waste good waste?”
Neste Rotterdam is a busy place. Walking around the site you often need to stand aside as cranes go past. Scaffolding was being taken down after a big maintenance project and erected again in different areas as part of a large expansion. The site has been producing renewable diesel since 2011. By the end of 2023, Neste aims to produce 500,000 tons of Sustainable Aviation Fuel (SAF) here. If aviation has any hope of being carbon neutral by 2050 the world will need hundreds of SAF refineries like this.
Originally a fossil fuel refiner, the Finnish company patented a new way to make renewable diesel in 1997 called NEXBTL technology. In 2007 it started making it commercially alongside traditional refining. Its SAF was approved for use in aircraft in June 2011, with the airline Lufthansa using Neste SAF for commercial flights a month later. The Rotterdam site has only been used for biofuels. It has not refined a drop of fossil fuel.
Neste does not organise many tours of the refinery. You can tell this by the street signs. The road from the main entrance is called Road to Progress and there is Raapzaad Weg (Rapeseed Street) and Singapore Street, but the rest are more utilitarian: Wastewater Treatment Street, Jetty Street, Laboratory Street and so on. We got to walk down Pipe Alley – full of gauges at ground level – which few visitors get to see. These signs help workers as they cycle across the site (cycling is a feature of many oil refineries and not just because this one is in Holland).
Refineries are hazardous places. To enter the site, you need steel-toed boots, overalls, ear defenders, gloves and a hard hat You also clip a gas detector on your chest which picks up any leaks (it tests for four different types of gas). Everyone carries an emergency mask which is designed to give you 15 minutes of oxygen. To use it, you clip one part over your nose like a synchronised swimmer and breathe through the scuba- like mouthpiece. None of the Neste team showing us around had ever had to use one.
Neste takes safety seriously. On the way up to its meeting rooms there are signs saying “Please use the handrails for safety” but, with any fuel, accidents can happen. There was a small fire at the Rotterdam refinery in December. No one was hurt but it has delayed production of renewable diesel – although not the SAF upgrade.
The refinery is not in a part of Rotterdam that tourists visit. To get to it you pass other refineries and factories. A coal-powered power station, relit after the Russian invasion of Ukraine, is puffing out water vapour next door.
But it is the perfect location. Rotterdam is Europe’s busiest port with access to the North Sea as well as the river Rhine. This allows Neste to take the feedstock direct from both ocean and inland vessels and ship SAF out. There are also rail and pipeline connections that can be used. Neste is expanding its quay so it can take the largest ocean-going ships. Rotterdam is home to five fossil fuel refineries. Shell is planning to start making 400,000t of SAF a year from a nearby biofuel refinery in 2024.
66m years faster
SAF is referred to as a ‘drop in fuel’. While for now at least it needs to be blended with fossil jet fuel, it can be pumped or dropped straight into aircraft fuel tanks.
SAF is simply jet fuel. Pure jet fuel. This purity is why it cannot yet be used 100% in aircraft engines. Engine seals were developed to work with aromatics – impurities like naphthalene – and it is unclear how they will work with much purer SAF. The absence of aromatics means that SAF burns cleaner so produces fewer contrails – the European Union Aviation Safety Agency (EASA) has argued that aromatics should be removed from all jet fuel. Engine manufacturers are all working to make their engines work with 100% SAF but certification will take time.
Fossil fuel was formed millions of years ago when plankton died and fell to the bot- tom of shallow seas. The upper seas were full of living animals, but the bottom was dead (so there was little oxygen). The dead plankton were decomposed by bacteria, covered by sediment and, eventually, created miles of rock. More than 70% of all oil deposits were formed in the Mesozoic Era (between 252m and 66m years ago – when dinosaurs lived).
The oil formed in this way is a mixture of carbon and hydrogen – joined together in hydrocarbon chains. SAF producers simply replicate these molecules. They just do it above ground.
SAF can be made from many different feedstocks – and it will take a lot of different feedstocks to meet carbon targets. But in 2023, when you hear about a flight taking place using SAF, the odds are that the fuel was created from a mixture of used cooking oils and left-over fats from abattoirs. This is what Neste is using in Rotterdam.
In 2017 sewerage engineers in London discovered a 250m long, 130t fatberg of used cooking oil, greases and wet wipes blocking a major pipe. Dubbed “Fatty-Mc-Fatberg” by Londoners, it was caused by restaurants pouring oil into sinks for decades. Part of it is displayed in the Museum of London.
Restaurants used to have a choice of paying for used cooking oil to be taken away or dumping it. No one does this now. Instead, they sell it to be made into biodiesel and HEFA SAF (HEFA stands for hydroprocessed esters and fatty acids.) McDonald’s Netherlands supplies Neste with its used cooking oil and then uses the renewable diesel in its delivery trucks.
You can trade used cooking oil futures on Chicago’s CME exchange. Prices soared during Covid when restaurants were shut. Demand for used cooking oil is soaring. In many countries police are warning restaurants to keep their used cooking oil locked up to stop gangs stealing it.
Neste has bought used cooking oil and rendered fat collecting companies in the US, the Netherlands and Ireland to ensure it has enough feedstock.
The biggest difference between refining HEFA-SAF and crude oil is the range of feedstocks. There are different types of crude oil – some are lighter or heavier, some sweeter and some more acidic – but refineries develop expertise for their local products. With SAF, the feedstock changes often. Neste could easily be refining used cooking oil from the frites shops of Brussels at the same time as left-over duck, chicken and pork fats from a German abattoir.
Tracking where the raw materials come from is crucial. One of the advantages of the HEFA process is the range of oils and fats that can be used. But not all of them are sustainable. You can easily make aviation fuel from palm oil that has been grown on land cut down from virgin rainforests, but it would not be sustainable. Neste says that tracking feedstocks is one of its core strengths and something it has invested significant amounts in. Although it does use some palm oils from mature farms for diesel, it never uses them for SAF.
Sucking the oxygen out the room
Neste’s feedstock typically comes by ship and can be stored for weeks if needed. When ready, the fats are heated to above 50°C/120°F to make them run easily. They are then pre-treated, which involves mixing with activated clays to remove impurities. A lot of Neste’s proprietary technology is in pre-treatment and it guards its secrets. Visitors are never allowed in this building.
Standing next to pre-treatment is the only place you can smell the feedstocks. It is not rancid, but quite a pleasant smell like animal feed (which also contains oils and fats).
In the 40m (131ft) hydroxenation tower, Neste takes the oxygen from the fat molecules and replaces it with hydrogen. The oils are put in the top and then run down through metal catalysts. Pre-treatment is important to stop residues interfering with the efficiency of the expensive metal catalysts in the tower. At the end you now have a pure hydrocarbon.
These molecules are then transformed (or isomerised) into molecules that match diesel or SAF. They will then be distilled. There is a huge metal pipe with tentacle- like pipes jutting out now which will become a distillation tower. Because jet fuel has a higher evaporation point than diesel it is easy to split it out. Neste is building a pi- lot plant to create green (environmentally friendly) hydrogen. When completed it will be the largest of its type in the world.
The SAF will then go to storage tanks until it is sent to be blended in Ghent, Belgium. The SAF tanks – which are built from the top down – are almost completed. On January 1st, 2023 NATO agreed to start transporting SAF in its Central European Pipeline System. The 5,300km pipeline is used to deliver fuel to 20 military airbases and six commercial airports.
It is all very calm in the Rotterdam facility. When you visit a refinery you expect to see flames coming from the flare stack. This is where Neste disappoints. While it is tall – and painted red and white to draw your eye – you only occasionally see a very small flash. “This is a sign that everything is under control,” says one Neste manager.
The control room is also relaxed. Apart from the odd beep, everything is quiet. But focused. Dressed in jeans and sweatshirts, the four engineers are each watching 12 monitors. Each monitor is split into four different parts showing Gantt-like flow diagrams – which means they are each monitoring 48 dashboards at a time.
The minimum number of staff needed to operate the whole refinery – which covers about 20 acres – is just seven. Although the site employs several hundred more engineers and technicians to keep it running safely. There are also hundreds of contractors working on the expansion.
“Co-processing on its own won’t be enough to meet increasing SAF demand. Stand-alone units will also be required to ramp up production.”
Traditional oil companies can also adapt existing refineries to co-process 5% feed- stocks – typically used cooking oil – along- side fossil fuels. Bp is producing SAF this way in Lingen, Germany and has plans to do this at four other refineries. Eventually they hope to be able to add up to 30% of renewable feedstock. “Co-processing has an integral role to play,” says Andreea Moyes, Air bp’s global head of Sustainability. “However, we also believe that co-processing on its own won’t be enough to meet increasing SAF demand. Stand-alone units will also be required to ramp up production.”
Where there is muck
HEFA SAF made from waste oils and fats is referred to as first generation SAF. Because fats have been used to make biodiesel for many years it is the most efficient way to make SAF. But there are not enough restau- rants selling fried food to make the billions of gallons of SAF than the world needs, and the feedstock is not cheap. Neste estimates that HEFA can supply around 10% of global jet fuel use.
“There is limited availability of used cooking oil and fat feedstocks. We have three concerns about this,” says Matteo Mirolo, aviation policy manager, at non-government organisation Transport & Environment in Brussels. “First, there is a limit to how much SAF can be produced from them. Second, the more demand you have for things like used cooking oil, the greater potential for fraud. Third, there is also a trap that producers focus too much on HEFA feedstocks that they ignore other SAF production pathways with more scalability potential such as synthetic kerosene.”
Transport & Environment says that di- verting non-sustainable feedstocks to SAF can be an issue. HEFA SAF can be made using Palm Fatty Acid Distillate (PFAD) which is left-over when palm oils are refined. Al though PFAD is a waste product, it is also used to make soaps and animal feeds. If the aviation industry uses PFAD for SAF, soap and animal feed companies are likely to re- place PFAD with pure palm oil, which leads to more deforestation. The same is true with higher grade (category 3 waste ani- mal fats) that are used for food and animal feed. Airlines – including low-cost carrier easyJet – have worked with Transport & Environment to raise this issue with European lawmakers.
“Customers need transparency”
“SAF is a double-edged sword. It is drop-in and the quickest solution to decarbonise long- haul aviation, but customers need transparency,” says Mirolo. “It is great if the pilot goes ‘Ladies and gentlemen today we are flying with 20% Sustainable Aviation Fuel’ but if passengers later find out that SAF producers are using non-sustainable feedstocks like palm oil you have destroyed that trust and created a cure that is worse than the disease. It is so important that producers are transparent.”
A quarter of Neste’s staff work in research and development and they are always looking at new feedstocks and pro- duction techniques like power-to-liquid SAF. In the next 10 years the Rotterdam facility is expected to use more than 10 different feedstocks to make SAF.
“We are seeing strong demand for SAF – especially from business and general aviation,” said Keith Sawyer, manager of Alternative Fuels, Avfuel. “In California currently SAF is indicatively about $2-$4 more per US gallon than Jet A, excluding tax and freight. It can be a bit higher if delivered outside California, but we saw wide fluctuations in jet pricing in 2022 so the difference changes all the time.”
We visited Rotterdam with Victor, the business jet charter broker. Victor has worked with Neste to launch an innovative scheme so charter customers can buy SAF for their booking. Since June 2022, one fifth of its customers have chosen to use SAF.
“A lot of people say that there is not the demand, but there is,” says Toby Edwards, co-CEO, Victor. “We have shown this and would love to help others in the industry. We have proved that customers will choose SAF.”
Customers choose what proportion of their booking is covered by SAF. On average customers who have opted-in have chosen to use SAF for about a third of their fuel burn. Rather than physically fill the aircraft they are flying on, Neste delivers the fuel to a partner airline which uses it. Victor’s customers get an audited SAF delivery certificate. It calls this: “Pay here, use there.”
Governments are also encouraging production. US president Joe Biden wants the US to produce 3bn gallons of SAF per year by 2030. By 2050 the US aims to be making 35bn. The US has started subsidising production with a federal SAF Tax Credit of $1.25 for each gallon. Illinois will also subsidise operators with a $1.5 per gallon credit for using SAF.
The EU is finalising rules that mean by 2025, 2% of all jet fuel needs to be SAF – about 1.2m tons. By 2030 the mandate will be 5%, by 2050 at least 63%. Japan and the UK also have SAF targets.
Truckers are concerned that incentives like SAF credits mean aviation is taking feedstock they need for renewable diesel. “We are disappointed that the Administration ignored the harmful effects that come with incentivising sustainable aviation fuel above over-the-road fuels that can be produced at less cost and have a more favourable environmental impact,” said NATSO – the US association for truck stop companies – in a statement.
Neste, the world’s largest SAF refiner, produced 100,000t of SAF in 2022. In 2026 – with production increases in Rotterdam and Singapore – its production capacity will rise to 2.2m tons. This means that Neste could theoretically meet the EU targets on its own.
“There is a lot of focus on mandates, but voluntary demand can get the industry to net zero much faster,” says Neste’s Wood. “Everyone has seen recent protests at airports, being sustainable is becoming a licence to operate.”
So, when a waiter next asks: “Would you like fries?” Please say yes.