Neste tables original plan for Porvoo refinery renewable hydrogen unit
Neste Corp. has cancelled its first attempt at bringing renewable hydrogen production to its 10-million tonne/year (tpy) refinery in the Kilpilahti industrial area of Porvoo, Finland, about 20 miles east of Helsinki.
On Oct. 24, Neste said it will no longer move forward with an investment in a previously proposed project involving installation of a 120-Mw electrolyzer at Porvoo that would have allowed the refinery to produce green hydrogen as a replacement for fossil-based hydrogen currently used in its processing.
Cancellation of the renewable hydrogen plan follows completion of the project’s basic engineering study, which Porvoon Energia Oy began in May 2023.
Neste’s decision to cancel the project stems from a combination of “challenging market conditions and [the company’s] financial performance, requiring critical assessment of any new investments,” the operator said.
Project evaluation was also negatively impacted by Finland’s current regulatory framework for hydrogen utilization, which imposes strict limits on a refinery’s use of renewable hydrogen in its processes as related to the terms of Finland’s national statutory distribution obligations, according to Neste.
“These limitations prevent the full economic utilization of [an] electrolyzer of this size,” the company said.
With Neste’s plan already in place to transform the Porvoo refinery into a leading renewable and circular solutions refining hub by the mid-2030s, however, the operator said its decision to cancel this first renewable hydrogen project is more of a delay in bringing green hydrogen to the site (OGJ Online, May 14, 2024).
“[W]e are actively evaluating alternative pathways for securing renewable hydrogen in Porvoo,” said Markku Korvenranta, executive vice-president of Neste’s oil products business unit.
Committed to using renewable hydrogen at the Porvoo refinery as a means of attaining its own decarbonization goals, and contributing production to help fulfill Finland’s distribution obligation under the European Commission’s (EC) requirements for Renewable Fuels of Non-Biological Origin (RFNBO), Korvenranta said the company will continue working with partners to develop hydrogen ecosystems connected to its Porvoo site.
As defined by the EC, RFNBOs are synthetic drop-in fuels mostly derived from electricity that can cover part of the European Union’s (EU) demand in the coming years (OGJ Online, Sept. 12, 2024).
Porvoo’s decarbonization journey
Formally announced in December 2023, Porvoo’s planned transformation will proceed in phases and, upon completion, will equip the site with a long-term capacity potential of about 3 million tpy for renewable and circular products.
In December 2022, Business Finland awarded Neste €27.7 million in public funding to support Porvoo’s future green hydrogen projects following the July 2022 designation of its Project PULSE (Pretreatment and Upgrading of Liquefied waste plastic to Scale up circular Economy) by the European Commission as an Important Project of Common European Interest (IPCEI) (OGJ Online, Feb. 6, 2023).
Implementing Neste’s proprietary technologies for chemical recycling of waste plastic for gradual integration into Porvoo’s refining operations, PULSE—which is scheduled for start in January 2028—will enable the site to process 400,000 tpy of liquefied waste plastic to avoid carbon dioxide-equivalent emissions of 10.3 million tpy during its first 10 years of operation.
As part of PULSE, Neste confirmed in June 2023 its final investment decision to begin construction of a €111-million unit at Porvoo equipped to upgrade 150,000 tpy of liquefied plastic waste into high-quality feedstock for new plastics. The upgrading unit is scheduled to be completed first-half 2025, the operator said.
In December 2022, Neste partnered with Norway-based hydropower producer Statkraft and wind farm developer Ilmatar to help transition its operations to a more sustainable energy supply via deliveries of renewable wind power to the Porvoo refinery. Statkraft began supplying the site in August 2022, with deliveries from Ilmatar scheduled to begin early 2023. Together, Statfraft and Ilmatar will supply about 290 Gw-hr/year of renewable electricity. Combined with an existing power purchase agreement with Fortum, Neste said renewable wind power will account for about 40% of the refinery’s electricity usage by 2025.
Robert Brelsford | Downstream Editor
Robert Brelsford joined Oil & Gas Journal in October 2013 as downstream technology editor after 8 years as a crude oil price and news reporter on spot crude transactions at the US Gulf Coast, West Coast, Canadian, and Latin American markets. He holds a BA (2000) in English from Rice University and an MS (2003) in education and social policy from Northwestern University.
