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Home , Neste, Neste Renewable Diesel

Neste

Cimac Cascades 2017

Teemu Sarjovaara, D.Sc.(Tech) R&D, Products This is what we want to achieve

We want to We want to be grow in the Baltic Sea global renewable downstream feedstock-based champion markets

2 Neste in numbers

Comparable Several years in operating profit Largest owner ~ 5,000 the Global 100 list € 11.7 the Finnish employees of the world’s € 983 most sustainable State (50.1%) in 15 countries billion million companies

3 Neste globally

Production: Headquarters: , • • • • • (, Neste's share 45%)

Sales and marketing: • Espoo • Stockholm • Tallinn • Riga • Vilnius • St. Petersburg • Geneva • Beringen • Houston • Toronto • Singapore

4 We operate on a global market

SALES BY REGION FROM IN-HOUSE PRODUCTION IN 2016 (2015)

Finland 40% (40) Other Nordic countries 16% (14) Other Europe 30% (34) USA and Canada 12% (8) Other countries 3% (3)

5 A wide range of premium-quality products

SALES BY PRODUCT FROM IN-HOUSE PRODUCTION IN 2016 (2015)

Diesel fuel 35% (34) Motor and gasoline components 27% (26) Jet fuel 3% (4) Base oils 3% (3) Heating oil 1% (0) Heavy 10% (8) 14% (16) Other products 7% (9)

6 Cleaner solutions through the years

Lead-free and Low-sulfur sulfur-free fuels marine fuel

1980– 2007 2011 2013 2014 2015 2016 2005 2017

7 Crude Oil fractions Processing Products

LPG IBP-20°C • Distillation Propane 1,5 wt-% • Desulphurization Butane

Naphtha • Distillation 20-180°C • Desulphurization Gasoline 17,5 wt-% • Reformation

JET A1 180-220°C • Meroxing JET A1 RMG is unique refined 6 wt% product because of: 1. Low sulphur 2. Low Sediment content Gasoil Diesel 3. Heavy product 220-360°C • Desulphurization DMA 24 wt-% DMA

Neste’s customer promise is: DMB

VGO Gasoline RMB 360-565°C • Catalystcracking Diesel The most cost-efficient 32 wt-% • Hydrocracking DMB reliable low sulphur RMB fuel solution! Diesel • New Feed Pre- Vacuum residue 0,1% RMG Treatment Unit RMG +565°C (low sediment) 19 wt% • Thermocracking • Hydrocracking Asphaltene

8 High quality Neste product stream renewable bunker fuels 2020? Heavy Sulphur limit distillate 0,1% sulphur 0.1% SECA bunker fuel fuel oil Jan. 2015 May 2015 2018 Renewables

0,5% sulphur DMB RMB RMG fuel oil 2020? 

All products based on standard ISO 8217 Fuel oil

DMA

9 Example: Neste DMB/RMB refining

10 Excellent test results of Neste’s MDO DMB

• Product was delivered to five ships at December 2014 • Total volume ~500 tons • Tests in different types on engines: main engines, auxiliary engines and boilers • Based on test, Neste MDO DMB proved to be a high quality product performing excellently as a bunker fuel • Positive feedback from engine manufacturer

11 12 RMG will be the most cost efficient low sulphur Fuel

DMB RMB RMG Viscosity 6 cSt@40 °C Viscosity 12cSt@50 °C Viscosity 300cSt@50 °C Density 870 kg/m3 Density 880 kg/m3 Density 920 kg/m3 Pour point max: Pour point max: +25 °C Pour point max: +30 °C • Summer: +10 °C • Winter: +5 °C

Energy content 42,5MJ/kg Energy content 42,6MJ/kg Energy content 42,2MJ/kg Distillate, no residue Distillate, no residue Carbon Residue 8,0wt-% No Sediment No Sediment Low Sediment No Asphaltenes No Asphaltenes Low Asphaltenes No Metals No Metals Low Metals

13 14 Global leader in renewable diesel • Annual production capacity 2.4 million tons of have been increased to 2.6 Mt • Production based on Neste’s proprietary NEXBTL technology • Flexible and sustainable raw material base • In 2016, Neste invested 70% of its R&D costs (total EUR 41 million) in the development of future raw materials, as well as research on NEXBTL technology and renewable products

15 Our renewable products

Neste Renewable Fuels Neste Renewable Chemicals

Neste Neste Neste Neste Neste Neste Neste Renewable Renewable Renewable Renewable Jet Renewable Renewable Renewable Diesel Gasoline Propane Fuel Isoalkane Naphta Propane

16 Neste Renewable Diesel • The highest quality diesel in the world • Produced from waste and residue fats from food processing as well as vegetable oils with Neste’s proprietary NEXBTL technology • Using Neste Renewable Diesel significantly reduces greenhouse gas and tailpipe emissions • Compatible with existing distribution systems and engines • Meets even the toughest manufacturer requirements

17 Fully compatible with fossil diesel

Renewable diesel (HVO) Fischer-Tropsch Conventional fossil diesel e.g. Neste Renewable Diesel (BTL) (FAME / RME)

Flexible mix of Vegetable oils Crude oil Raw material raw materials Biomass and animal fats (mineral oil) (waste fats and vegetable oils) (mainly oil)

Gasification & Technology Traditional refining Hydrotreating Esterification Fischer-Tropsch

Bio-based Bio-based hydrocarbon Ester-based, Hydrocarbon (gasoline, End product (renewable diesel, jet fuel, (renewable gasoline, conventional jet fuel, diesel) bionaphta, biopropane) jet fuel, diesel) biodiesel

O C H Chemical composition n 2n+2 C H C H II + aromatics n 2n+2 n 2n+2 H3C-O-C-R

HVO = Hydrotreated , advanced , i.e. renewable fuel FAME = Fatty Acid Methyl Ester, conventional biodiesel BTL = Biomass to Liquid RME = Rapeseed Methyl Ester, conventional biodiesel

18 Low-carbon Neste Renewable Diesel

Fossil diesel Up to 90% less greenhouse gas emissions Renewable diesel produced from

Renewable diesel produced from waste and residues

*g CO2eq/MJ. Greenhouse gas balances 83.8 g* 40.0 g* 13.0 g* calculated in accordance with the method defined in the EU RED Directive.

19 HVO reduces exhaust gas emissions

Helps to improve local air quality

Exhaust emissions compared to fossil diesel: • NOx – 9% • Particulates – 33% • CO – 24% • HC – 30%

Source: Average on over 40 scientific publications

20 Different biocomponents

Biodiesel (FAME) Renewable diesel (HVO) Other renewable • Esther • Hydrocarbon • Maximum 7% (ISO • Not limited (ISO 8217) • E.g. Co-feed 8217) • Challenges: No • Not limited (ISO 8217) • Challenges: Storage challenges • Not different from fossil stability, microbial • Stability similar to fossil hydrocarbons growth, material diesel, good cold compatibility, water properties, good separation compatibility, doesn’t absorb water

21 Neste Renewable Diesel (NEXBTL) marine use cases

2011 trial with Rotterdam Port Authority patrol boats running on 100% NEXBTL renewable diesel

NEXBTL renewable diesel is already sold to boat operators in marinas in Germany and Austria

The largest Norwegian ferry operator Fjord1 will start using 100% NEXBTL renewable diesel on two stretches in 2016

The US and Italian navy are already using different renewable diesel blends in their vessels

22 Thank you!

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