Maija Suomela's speech at Neste Oil AGM 2012

Dear guests of the Annual General Meeting, and Neste Oil Executive Board

Publication - April 3, 2012
For several years, concerns have been raised in this Annual General Meeting about environmental problems caused by Neste Oil’s global production of palm oil diesel. During 2011, Neste Oil has finished building its enormous NExBTL refineries in Singapore and Rotterdam, and completed the full production capacity of two million tons.

 

Since 2007, the board has been regularly informed about risks and land use issues related to the use of palm oil and other vegetable oils for biofuels. To meet Neste Oil’s enormous demand for feedstock, vast areas of land have to be dedicated to crop production. Simultaneously the global demand for food is increasing and there is not enough available agricultural land for all sectors.

The Executive Board has had diverse views on the issue. First, the problems were understated by giving the impression that palm oil is only a temporary feedstock for the company. When the board finally realized that there is no environmentally viable raw material available, there was an attempt to re-profile Neste Oil as a leader in using sustainable palm oil. Last year it became clear that RSPO certification has failed in improving production conditions, as the European Commission did not approve the system as an indicator of sustainable biofuel production. The RSPO has never been an adequate gauge of sustainability of biofuels, as it does not include greenhouse gas criteria. The only step forward made by RSPO was seizing IOI Group’s certification process, due to reoccurring social conflicts and illegal logging. IOI Group is the only publicly identified supplier of Neste Oil.

Neste Oil gives the impression that it has reduced the use of palm oil in its products but this is not true. Even the use of crude palm oil has increased which is admitted by the Board: measured in tons, palm oil use has increased by 29% since 2010.

Neste Oil’s current ISCC-certificate does not take indirect land use changes into account, though this is the most pressing environmental problem regarding biofuels. When current crop area is dedicated to biofuel production, the existing agricultural production will move to new areas. The result is more and more destruction of peatlands and rainforests, and thus the aimed emission reductions are, in reality, emission increases. 

When European Parliament agreed on the Renewable Energy Directive, the decision was made that indirect land use effects should be to taken into account when measuring emission reductions. After a long delay, the indirect effects ought to be included in the Renewable Energy Directive and Fuel Quality Directive during 2012. Neste Oil is actively lobbying against improvements in the sustainability criteria, which shows the company’s persistent disregard of global problems caused by its palm oil diesel production.

Neste Oil continues to claim that there is not enough scientific evidence about the indirect land use change impacts of biofuel production. In fact, several peer reviewed publications have been released about the issue lately. European Commission has published and leaked research, indicating that due to indirect land use changes, palm oil diesel production may actually cause equally significant emissions as notorious tar sand oil. 

Last year, over 200 economists, ecologists and climatologists proposed European Commission to increase clean energy markets and work opportunities by supporting only such biofuels that do not cause significant land use changes. Strategic investment decisions should be based on best available estimates about true impacts to climate. Distinguished scientists stated also that biofuel emission estimations without indirect land use effects are simply false. Current, first generation biofuels cause significant emissions as new crop area is required for their production. Even though the estimates of such effects are not always precise, the science community does not support such policies that define indirect land use change as zero impact  on emissions, as the EU directive currently does. The calculation method is incorrect, and does not provide accurate estimation of climate impacts.

A Finnish state company could act as a true pioneer. Biofuel production should reduce climate emissions and reduce dependency on fossil fuels. Neste Oil would have had an opportunity to become a pioneer in sustainable biodiesel production, if it had started its NExBTL production with 100% sustainable feedstock instead of building the whole two million ton production on palm oil and other land based feedstock. Meanwhile, other producers like UPM, have reached Neste Oil’s technological lead and are investing in production that is based on mainly domestic feedstock.

I would like to ask Neste Oil CEO Matti Lievonen: Is the company finally ready to face the truth and admit that palm oil diesel production was a bad investment? This is the eleventh hour for Neste Oil to freeze the palm oil use to current levels and rapidly announce a roadmap, where it pledges to use only raw materials which do not aggravate climate change and the destruction of rainforests and peatlands. Thank you.