SM Tharman Shanmugaratnam at Neste Singapore Refinery Expansion Foundation Stone Ceremony

His Excellency Antti Vanska, Ambassador of Finland to Singapore
Mr Peter Vanacker, President and CEO of Neste Corporation
Distinguished guests, ladies and gentlemen,

It is a real pleasure for me to join you this morning for the Foundation Stone event for Neste’s major new investment in Singapore. 

It is a major step forward not only for Neste, but for Singapore’s Energy and Chemicals (E&C) industry, and for our two countries’ mutual quest to grow, and help the world grow, in an environmentally sustainable way. And as Peter said very eloquently, this foundation stone of the toughest Finnish granite also symbolises Neste and Singapore’s solid partnership with each other, a partnership marked by our determination to build something that will last.

Transitions towards Sustainability

I had the opportunity to meet Neste’s top management team in Porvoo, Finland in October last year. I was impressed by what you had achieved, and your vision for the future. The company is a bright spot in global sustainability efforts. 

Neste is not only the world’s most sustainable energy company and a leader in renewable products, but also one of the world’s most sustainable corporations across all industries¹. What is even more impressive, is the journey Neste has undertaken to get here and the steps it is continuing to take, to ensure that sustainability is embedded in its business. Your own journey shows how much can be achieved in a short period, with bold ambition and determined strategies and implementation. 

About a decade ago, Neste was a traditional fossil fuel company. Through its R&D and transformation efforts, it developed proprietary processes to turn animal fat and plant oil into renewable diesel. 

Today, Neste is the world’s largest renewable diesel provider, and as Peter said, almost two-thirds of its profits come from renewable products. Neste’s renewable diesel is amongst the world’s most advanced and cleanest diesel fuel, delivering up to 90% reduction in greenhouse gas emissions compared to fossil diesel. It can also be used directly by existing engines. 

Such innovations are critically needed today, in our efforts to tackle climate change. Without innovations to create efficient, affordable and scalable forms of clean energy, the cost to economies and societies of transiting to clean energy will be far higher. It will then be far more difficult to secure the necessary political commitment in any democracy to make that transition. So it is extremely important that we have innovations like Neste’s, to reduce the trade-offs between sustainability and affordability, between sustainability and growth, and between sustainability and political support.

It is in this spirit that we have partnered Neste in Singapore to develop capabilities, innovate, and contribute to sustainability. It has been almost 10 years since the existing plant started operations – this was in fact Neste’s first renewable fuels refinery outside Europe – and it is already producing over 1 million tons of renewable diesel per annum.

Neste has now decided to spend more than S$2 billion in infrastructure investment and operational expenses in Singapore in the next five years. This will double its refining capacity in Singapore (to about 2.3 million tons per annum). It will make it Neste’s largest renewable products plant, and account for about half of its global production capacity. 

Equally important, Neste will be using its Singapore facility to move further along sustainability journey. First, it will expand its product slate beyond renewable diesel to jet fuel. Singapore will be Neste’s first site globally to produce renewable jet fuel at commercial scale. Second, the Singapore facility will build in new innovative capabilities to process a wider range of feedstock, including dirtier waste animal fat and residual plant oils, making the process not only more environment friendly, but also more cost efficient. 

Neste will also add to our efforts to develop the circular economy. I understand that in its next phase of development, the company is exploring ways to use liquefied waste plastic as a future raw material for its refining processes². Using waste plastic as a raw material increases material efficiency, reduces crude oil dependency and of course the carbon footprint of products based on such raw materials. We are very keen to partner Neste in this new and exciting possibility for converting waste to energy.

Developing Win-Win Partnerships

Peter spoke earlier about the advantages that Singapore offers Neste, but I would say that this is really about developing win-win partnerships with leading players like Neste. 

Besides collaborating in innovation, one of the ways we are developing these win-win partnerships is by developing a trusted, digitised and resilient supply chain network. This is critical for refinery operations. We are also developing new capabilities in managing and greening our supply chains, to meet the demands of firms like Neste. Neste’s Singapore refinery had to meet the stringent criteria for International Sustainability & Carbon Certification (ISCC) - a well-recognised global certification system for sustainability - which required access to renewable feedstock from our neighbouring countries. 

Last but not least, as Peter highlighted too, people are critical. The EDB’s working with companies on cutting edge production processes helps to create new opportunities for our people, and develops their skills and capabilities over time. 

Neste’s upcoming expansion will create more than 100 good quality local jobs, but I should also give special credit to Neste for your commitment and emphasis on training. Neste has developed specialised in-house training for their workers to equip them with the necessary skills in its niche technology. These include e-learning and simulated on-site training, as well as sending workers to Neste’s sites in Finland and Netherlands. 

As Neste introduces new processes in the facility, workers are also engaged and involved in the development and commissioning of new processes. Mr Mohammad Azmi is a good example. He was a senior technician who started out in the energy sector with no prior experience in renewable fuels. Following his training in Neste’s proprietary technology, Neste offered him an opportunity to join its Technical Department and get involved in plant improvement projects, where he gained deep knowledge of plant processes. Azmi has now taken up a management position and plays a critical role in training new technicians, to prepare for Neste’s expansion. 

Conclusion

In conclusion, I would like to thank Neste for your continued trust in Singapore. I am sure that your latest investment in Singapore will put you in a good position to capture further growth opportunities in the region and globally. Let us keep working together, to create a liveable and better planet for generations to come.

[1] The Corporate Knights’ Global 100 Index has ranked Neste in the top three most sustainable companies in the world – it is not only most sustainable energy company, but one of the top in the world across all the companies the Index has ranked. (Neste was ranked second in 2018, and third in 2019.)

[2] Liquefied waste plastic would be used as a replacement for crude oil for the chemicals industry, where it can be upgraded to fuels, chemicals and new plastics.

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