Neste Oil Corporation
Stock Exchange Release
30 November 2007 at 8.30 am (EET)
Neste Oil plans to invest approximately €550 million in building a plant in Singapore to produce NExBTL Renewable Diesel. The plant will have a design capacity of 800,000 t/a, making it the largest facility producing diesel fuel from renewable feedstocks anywhere. The investment forms part of Neste Oil’s strategic goal of becoming the world’s leading renewable diesel producer. The use of biofuels such as NExBTL is predicted to increase rapidly in developed economies over the next few years. The plant will be based on Neste Oil’s proprietary NExBTL technology. The first NExBTL facility was commissioned in Finland at Neste Oil’s Porvoo refinery in summer 2007, and a second is due to come on stream there in 2009. NExBTL technology is the first commercial new-generation renewable diesel production process, and can use any vegetable oil or animal fat as its input. The end-product, NExBTL Renewable Diesel, is a premium-quality fuel that outperforms conventional fossil diesel fuel and can be used as such in existing vehicles and be distributed in existing logistics systems. NExBTL Renewable Diesel is also a good performer in environmental terms. When produced from sustainably sourced raw materials, its total lifecycle greenhouse gas emissions are 40-60% less than those of conventional diesel fuel. In addition, NExBTL has lower tailpipe emissions, contributing to better air quality. The main raw material planned for the Singapore plant will be palm oil. Neste Oil has committed itself to only using palm oil certified by the Roundtable on Sustainable Palm Oil as soon as sufficient quantities are available. Palm oil complying with the RSPO certification system, which was approved in November 2007, will probably be available from the early part of 2008 onwards. Excellent location Singapore is the world’s third-largest center of oil refining, and occupies a central location in terms of product and feedstock flows and logistics. This also gives Singapore excellent potential to develop into a center for Asian biofuel production. Singapore is a signatory to the Kyoto Protocol and has committed itself to reducing greenhouse gas emissions. The government of Singapore has played an important role in promoting Neste Oil’s investment, and the Singapore Economic Development Board (EDB) has assisted Neste Oil at every stage of the preparations for the project. The EDB will also support the investment through e.g. R&D support and assistance with recruiting and training personnel. Construction of the Singapore plant will begin in the first half of 2008, and the facility is due to be completed by the end of 2010. The plant will be built in the Tuas industrial zone in the southwest of the island, around 30 minutes from the centre of Singapore. The plant will be integrated into the area’s existing industrial infrastructure, and will make use of local site utilities and port and storage services. When operational, the plant will employ around 100 people.
Neste Oil Corporation Osmo Kammonen
Senior Vice President, Communications Further information:
Executive Vice President Jarmo Honkamaa, tel. +358 (0)10 458 4758
Encls:
Factsheet on NExBTL
Factsheet on biofuel goals in markets around the world
Factsheet on Neste Oil’s feedstock sourcing policy Images of the NExBTL plant at Porvoo can be found at www.nesteoil.com / Media / Image Gallery Press conference
Neste Oil will organize a press conference on the project at Neste Oil’s Head Office, Keilaranta 8, Espoo, Finland on 30 November 2007, at 10.00 am (EET). Conference call in English
A conference call in English for the international media, analysts and investors will be held at 11.00 am (EET) on 30 November 2007. Participants can join the call by dialing +44 (0)20 3023 4426. In the USA the call-in number is 1 866 966 5335. A recording of the call will be available for one week at +44 (0)20 8196 1998 and in the USA at 1 866 583 1035, code 725 434. You will also enter the recording of the conference call by clicking this link .
Neste Oil will soon hold a press conference on the project in Singapore. Further details will be provided later. Neste Oil in brief Neste Oil Corporation is a refining and marketing company focused on advanced, clean traffic fuels, with a strategy that prioritizes growing its refining and premium-quality renewable diesel businesses. Neste Oil's refineries are located at Porvoo and Naantali in Finland, and have a total refining capacity of approx. 250,000 bbl/d. The company employs around 4,800 people and its shares are listed on the Helsinki Stock Exchange. For further information, see www.nesteoil.com.
Finnish company Neste Oil have announced that they intend to construct the world's largest biodiesel plant in Singapore at a cost of €440 million. The NExBTL facility will be Neste's third such project, and is intended to have a maximum capacity of 800,000 tonnes a year.

Demand for biofuels is expected to rise greatly over the next few years, as they are often cited as a good way to reduce greenhouse gas emissions, and are viewed as a renewable alternative to crude oil which has been at record high prices in recent months.

The site has been strategically selected to be close to Malaysia and Indonesia, both of whom are leading world suppliers of palm oil, which is intended to be the main fuel for the plant. Between them they account for 80% of global production. However, the use of palm oil is controversial, as some environmental scientists and campaigners believe using it will have a negative effect as increased demand in turn causes higher food prices and greater levels of deforestation.

Earlier this year, Greenpeace attempted to stop a palm oil tanker ship destined to Neste's existing biodiesel plant in Porvoo, Finland, but failed to stop the delivery. In addition to the Porvoo plant, which began operations earlier this year and is at its capacity production of 170,000 tonnes, Neste plan a second plant to open in 2009.

The new plant will increase demand for palm oil, as it will require 200,000 hectares of palm oil plantations to supply the million tonnes of oil it requires per annum. "The new plantations are to be set up mainly in Indonesia, and increasingly in swamp rain forests," said Greenpeace's Lauri Myllyvirta. When such terrain is cleared of trees, the peaty soil begins to dry out. "In the years that follow, it releases all of the carbon that had been stored in it", Myllyvirta continues. He concludes that he believes palm oil cultivated in such conditions produces ten times the carbon dioxide emissions of fossil fuels. Jarmo Honkamaa, director of Neste's biofuel sector, countered these claims with his belief that the gas balance remains positive and points to Neste statistics which say biodiesel diesel produces 40-60% less greenhouse gas emissions than standard diesel.

Another potential problem has been highlighted by Citigroup, who voiced concerns that Neste may not be able to complete the project on time and within the intended budget. Recently, Neste added a standard diesel production line at their Porvoo refinery. This was finished this year, approximately one year late and at an actual cost of €750 million, versus a budget of €500 million. Neste CEO Risto Rinne said in response, "we have learned our lesson," regarding the miscalculations on the new facility, and said that this knowledge, coupled with that obtained during construction of the Porvoo biodiesel plant, had been factored into calculations regarding the Singapore plant.

Construction on the third facility will start early next year, and is scheduled to end in 2010. Neste said in a statement that the investment was "part of Neste Oil's strategic goal of becoming the world's leading renewable diesel producer."