Mass balance principle for biofuelsWhat do we mean by mass balance?
Mass balance principle is a method approved by EU for recording the various raw materials used in producing renewable fuels. In Neste Oil’s case, the principle enables customers to buy NExBTL renewable diesel produced from a specific raw material. As different raw material inputs are mixed together in the production process, the physical end-product supplied to customers contains molecules from all the inputs. Using mass balance principle, Neste Oil can ensure that the amount of specific raw material requested by a customer and needed to produce the volume ordered, has indeed been ordered, procured and used in production.
Why does Neste Oil use the mass balance principle and is it allowed?
Yes, the mass balance principle is approved under the EU directive on renewable energy as a means of identifying the bio content of renewable fuels. The availability of bio-based raw materials varies, thus mass balance principle enables Neste Oil to procure and use different bio-based raw materials flexibly, on the basis of availability and price, to produce its NExBTL renewable diesel. Because oil refining is a process-based industry, production without disruptions is also more cost-effective for Neste Oil’s customers than if the company produced NExBTL from just one, specific raw material.
Can the use of mass balance principle result in part of Neste Oil’s bio-based inputs not being produced sustainably?
No. All of the bio-based inputs that Neste Oil uses are produced sustainably, as required by EU directives. The company only uses mass balance calculations to ensure that we know the quantities of different inputs (e.g. palm oil, rapeseed oil, animal fat) in our process at all times. We do not compromise on sustainability in respect of any of our bio-based inputs.
Is this principle used only for biofuels?
For example, so called "green electricity" is produced on the same basis. Electricity generated in different types of plants is all fed into the same grid. If a customer buys specifically hydropower- or wind power-generated electricity, the utility must ensure that the equivalent amount of electricity has been generated by hydropower or wind power and that the utility has either generated it himself or sourced it from another utility that has. In other words, the amount of hydropower- and wind power-generated electricity available through the grid must always match or exceed the amount purchased by customers.
Couldn’t Neste Oil simply produce individual lots of renewable fuel from different inputs?
The continuous nature of Neste Oil’s production processes means that this is impossible in practice. The storage tanks and pipework that would be needed for segregate production would bee too expensive to be profitable. All Neste Oil’s products are premium quality, irrespective of the feedstocks that are used. By using mass balance principle, the company can show in an EU directive approved way that some of our output is produced from specific inputs.
Does it really matter if, based on mass balance principle, someone buys fuel produced from a specific raw material?
Yes, it does. Demand shapes production decisions and how much renewable diesel is produced from a specific raw material. It can also shape future investments and future R&D.
Palm oil accounts for the majority of the bio-based raw material that Neste Oil uses. When produced appropriately, palm oil is an excellent raw material and all the palm oil that Neste Oil uses is produced sustainably. Renewable diesel produced from palm oil has proved the most economic for customers so far. But Neste Oil also strives to serve customers that prefer fuel produced from alternative inputs.
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