For over two decades, Neste has been quietly transforming itself from a regional oil refiner into a provider of renewable and circular solutions. Mercedes Alonso, Executive Vice President, Renewable Polymers and Chemicals at Neste, talked to Sustainable Plastic about the company’s leading role in the move away from fossil fuels – and about making choices.
Looking back, the catalyst for change was probably the climate convention of the United Nations in 1994, according to Mercedes Alonso, Executive Vice President, Renewable Polymers and Chemicals at Neste. As a mark of the growing awareness of the problems associated with climate change, the United Nations Framework Convention on Climate Change entered into force on 21 March 1994 with the specified aim of preventing “dangerous” human interference with the climate system. The ultimate objective was to stabilize greenhouse gas concentrations "at a level that would prevent dangerous anthropogenic interference with the climate system."
At Neste, as a producer of products derived from fossil resources, the Convention sparked a new vision of what the future could look like.
The company embarked on a programme to explore technology that, instead of fossil resources, would allow the use of oils and fats from renewable origins to produce renewable diesel and other renewable products, which led to the development of a proprietary technology called NEXBTL, an acronym for Next Generation Biomass to Liquid. The NEXBTL technology allows Neste to turn a wide variety of renewable fats and oils into premium-quality renewable products, such as renewable diesel, sustainable aviation fuels and feedstock for polymers and chemicals production to replace fossil naphtha.
“Also, in 2005, Neste Oil Corporation, as the company was then known, was floated into the market as a public company. Neste wanted to have a very clear strategic direction and took the decision – which was at the time quite bold and visionary - to look at how we could improve the effect of humans and the petrochemical industry on the environment. And having this proprietary technology in house was what allowed us to go ahead when nobody else was doing this,” she explained.
The company’s first renewable diesel facility, processing renewable raw materials with NEXBTL technology and located at the Porvoo refinery, was brought on stream in 2007.
“We invested €100 million at the time to have the first plant come onstream at a time when nobody was looking for renewable products. There was nothing like the public discussions today about climate change, plastic waste, marine pollution or whatever. But we believed that this was the path forward and accordingly, we invested heavily.”
The process was essentially top-down - a management decision originating from the CEO, supported by the new board of management and team of directors at the time who sought a solid strategy for a new kind of growth. And while Neste still has a conventional oil business the renewables ‘are 94% of our operating profit’.
The transition did not happen overnight. “A culture change is never that simple. In our case, the process cascaded down from the top leadership to the second level of management in the company and continued to disseminate into every corner of the organisation,” said Alonso.
“And of course, not everybody at Neste believed in it. It was probably around 2012 that this really started to be a business that positively contributes to Neste’s profit. In these years, the development of the business was also stimulated by new regulations on EU level. It became more and more clear that the decision taken many years earlier turned out to be just right. ”