ZUG / GENEVA: Gunvor Group has announced a significant collaboration with VARO Energy to develop a large-scale Sustainable Aviation Fuel (SAF) manufacturing facility in Rotterdam. This venture represents a major commitment to advancing the aviation industry’s transition to greener fuels. Since VARO’s initial announcement in September 2023, the project has made notable progress, with the Front-End Engineering Design (FEED) phase expected to be completed by Q4 2024.
The proposed facility is strategically located at the Gunvor Energy Rotterdam site, utilizing existing infrastructure, including transportation networks, utilities, and port facilities. This location offers a unique advantage, providing easy access to key markets in Northern Europe and beyond. The plant is designed to produce up to 350 kilotons per annum (kt p.a.) of SAF and Hydrotreated Vegetable Oil (HVO), with a flexible feedstock and product capability. This flexibility allows the facility to adapt to market shifts and regulatory requirements, positioning it as a critical player in meeting the EU’s ambitious SAF mandate.
The collaboration agreement specifies that Gunvor and VARO will share development costs and risks equally until the final investment decision (FID). Upon reaching the FID, the partners will form a project company, subject to regulatory approvals, to oversee the construction and operation of the facility.
Implications and Industry Impact
This partnership between Gunvor and VARO is not just about building a production facility; it’s about creating a robust infrastructure for the future of aviation fuel. The facility’s capacity to produce SAF equivalent to 7% of the EU’s 2030 mandate underlines the scale of this endeavor. SAF is a critical component in the aviation industry’s efforts to achieve net-zero emissions by 2050, offering up to 90% reduction in greenhouse gas emissions compared to conventional jet fuel.
“Large-scale production and adoption of SAF are critical to meeting the airline industry’s goal of achieving net-zero emissions by 2050.”
The project’s design also allows for the processing of a wide range of feedstocks, ensuring resilience against supply chain disruptions and price fluctuations. This adaptability is crucial for the long-term viability of SAF production, especially as global demand for sustainable fuels grows.
Statements from Executives
Torbjörn Törnqvist, CEO of Gunvor, emphasized the importance of SAF production in meeting the airline industry’s net-zero goals. “Large-scale production and adoption of SAF are critical to achieving these targets,” he stated, highlighting the strategic location of the Rotterdam site with its access to extensive port facilities and energy infrastructure.
Dev Sanyal, CEO of VARO Energy, echoed this sentiment, noting the project’s potential to meet the growing demand for SAF. “If efforts to decarbonize aviation are to be successful, it is essential that European SAF supply increases to meet mandated demand growth by the end of the decade,” Sanyal said. He emphasized the need for a cost-competitive and flexible production facility to ensure reliable supply.
