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Neste favours Rotterdam for new billion-euro refinery

Porvoo is another potential location for the Finnish state-owned company's new facility.

Neste-kyltti
Revenues from Neste’s oil refining operations plummeted last year as the coronavirus crisis impacted trading. Image: Markku Ojala / EPA

Majority state-owned oil company Neste is leaning towards choosing the Dutch city of Rotterdam over Porvoo in southern Finland as the location of a new refinery.

According to a report (external link in Finnish) in business newspaper Kauppalehti, a final decision on the investment – thought to be worth around 1.5 billion euros – is expected to be made later this year.

The paper writes that establishing the refinery in Rotterdam would be up to 500 million euros cheaper than in Porvoo. The availability of raw materials and better logistics are key advantages for choosing the Dutch port city over Porvoo.

Prime Minister Sanna Marin (SDP) previously said that the government would "leave no stone unturned" in efforts to secure Neste's refinery investment in Finland.

In an interview with Yle earlier this month, Neste CEO Peter Vanacker said that the decision will be based on the availability of raw materials as well as market conditions.

Vanacker listed "regulation, available infrastructure, construction costs, availability of labour, possible incentives and risks," as the criteria informing the final decision.

Neste already has a biorefinery plant in Rotterdam, which means that locating the plant there would mean expanding the existing infrastructure.

The company suffered a significant decline in sales of traditional petroleum products last year due to the effects of the coronavirus pandemic, although sales of renewable products rose.

Neste announced plans to shut down its refinery in Naantali with the loss of 370 jobs last November

Another Finnish city, Kotka, is also currently competing against Rotterdam as the location for the new biorefinery of a separate Finnish company, forestry firm UPM. A decision on that plant's location is expected next year.

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