One year after the European Commission launched the Clean Industrial Deal to tackle mounting competitiveness challenges for EU industry, Neste ― the world’s leading producer of sustainable aviation fuel and renewable diesel ― is calling for urgent action to deliver on the Commission’s promise of turning “decarbonization into a driver of growth for European industries.”

POLITICO Studio spoke to Jenni Männistö, vice president, strategy, M&A and business development at Finland-based Neste, about the company’s investments in the EU, how renewable fuels can be scaled and what they offer the continent’s economic future. 

POLITICO Studio: How does the scale-up of renewable fuels strengthen the EU’s competitiveness, and why should the EU prioritize this?

Jenni Männistö: Commission President Ursula von der Leyen provided a clear diagnosis when she began her second term in 2024: the world is in a race to develop the technologies that will shape the global economy for decades to come as we move toward climate neutrality. This global race is still on today, and Europe must seize the economic opportunities that clean tech provides amid increasing pressure on traditional fossil markets. One in five European oil refineries has closed since 2009. Going backward and falling economically behind in the global race is not an option.

The EU is seeing its competitiveness challenged in some clean tech sectors, but there are also areas where it is a leader, such as biofuels.

Our story shows what is possible: Neste has grown from a regional Finnish oil refinery into the global leader in renewable fuels. Forward-looking EU and global policies to reduce greenhouse gas emissions have helped accelerate innovation and growth.

PS: Neste is investing €2.5 billion in expanding its Rotterdam refinery to make it the world’s largest biofuels production facility. What’s needed for more investments of this scale when many businesses are delaying projects or even shutting down sites in the EU?

JM: The expansion of our Rotterdam refinery is a major investment. EU refinery and chemical sectors have lacked projects of this scale in recent years. Instead, we have seen new projects cancelled or delayed, all while traditional crude oil refineries close. This is a very concerning trend.

To turn the situation around and strengthen Europe’s competitiveness and energy security, we need long-term certainty and a strong business case for early movers. And EU businesses should, of course, compete on a level playing field with imports.

PS: Long-term certainty is a common request from businesses, but what’s specifically needed?

JM: The first ingredient is long-term certainty about Europe’s commitment to climate neutrality and emissions reduction. The EU’s 2040 climate targets set a clear direction, and their adoption means we can now focus on the policies that get us there.

The second ingredient is long-term regulatory certainty. We have a clear framework in place for SAF, for which the ReFuelEU Regulation sets targets until 2050. These targets must remain in place.

We are calling for new, strong enabling conditions for airlines to uplift SAF beyond the EU minimum SAF targets, for instance by increasing support under the Emission Trading System.”

However, other areas are lacking: the EU’s Renewable Energy Directive currently has no transport sector target after 2030. Moreover, the EU Effort Sharing Regulation, which notably includes the national decarbonization objectives for the road sector, provides no visibility beyond 2030. That is a major issue, because biofuels producers cannot make major business and investment decisions based only on one customer segment — aviation — or a short-term regulatory outlook.

PS: Why is it important that the EU supports early movers who invest in solutions to reduce transport greenhouse gas emissions?  

JM: We were pleased with the direction of the Clean Industrial Deal and the EU’s Competitiveness Compass at the start of 2025; it clarified that there needs to be a business case for “clean production” with “lead markets and policies to reward early movers.”

These commitments would address some of the big challenges for early movers that we see at Neste. We have invested heavily in expanding SAF production capabilities, but demand is failing to pick up as expected. Once the €2.5 billion expansion of our Rotterdam refinery is completed in 2027, Neste’s SAF production capacity alone could be sufficient to meet the EU’s current 2 percent SAF mandate.

Today, we are a year on from the launch of the EU’s flagship competitiveness plans at the start of 2025, but we still need new policies that translate commitments to early movers into action. That is disappointing, and 2026 must be the year when the Commission acts to turn Europe’s early SAF lead into a long-term competitive advantage. That is why we are calling for new, strong enabling conditions for airlines to uplift SAF beyond the EU minimum SAF targets, for instance by increasing support under the Emission Trading System.

PS: A level playing field is a vital factor; what makes it so crucial?

JM: Although Europe currently leads in the scale-up of renewable fuels, other countries and regions are supporting their domestic companies to expand production capacity. This raises major level-playing-field concerns, similar to those we have seen in many other sectors.

The EU must align its trade and industrial policies, especially for newly scaling markets. For instance, the EU’s SAF target is just 2 percent until 2030, and other countries and regions are only starting to roll out their own requirements for SAF use. This creates a risk that global SAF volumes end up flowing into the EU.

Renewable fuels can strengthen Europe’s energy security in today’s uncertain geopolitical environment.”

In 2025, the European Commission introduced new protective measures on biodiesel imports. In Neste’s view, there should be immediate measures to protect Europe’s biofuels industry as a whole, including SAF production, from unfair competition. The current approach falls short and endangers EU players’ competitiveness, as well as their ability to continue to invest in production capacity and future-proof innovation.

PS: There’s a push to revisit and simplify some of the rules agreed during the last Commission, such as the carbon dioxide standards. How do you view this? What’s the balance between renewable fuels and electrification?

JM: The approach of the Clean Industrial Deal is the right one — climate action and competitiveness must go hand in hand to deliver a growth strategy for Europe. That is why it is good that we revisit some of the EU rules with these twin objectives in mind.

Neste is leading the way with its investment in the Netherlands; we believe that the EU industry can still lead in renewable fuels if we are bold. We need to ask how we can implement policies that cut greenhouse gas emissions and build on Europe’s competitive strengths.

With this in mind, it is a step in the right direction to recognize the role of renewable fuels in the legislation on CO2 standards, but their actual and immediate greenhouse gas contribution needs to be better reflected. Electrification plays a role, especially in light-duty vehicles and urban transport, but it is not a silver bullet for the transport sector as a whole. Once EU rules enable a range of low greenhouse gas emission options, users can choose the solutions that best fit their operational needs.

PS: There’s also the issue of EU autonomy and energy in an increasingly volatile world. What’s the role of renewable fuels in that context?

JM: Renewable fuels can strengthen Europe’s energy security in today’s uncertain geopolitical environment. A key priority is diversifying supply; expanding European-produced renewable fuels can reduce our reliance on volatile global markets. In 2023, which is the most recent data available, the EU’s import dependency for oil was nearly 95 percent, underscoring the need to de-risk and diversify.

The aim is not to be an island ― EU companies will need global supply chains and partners. Scaling up renewable fuels brings opportunities for new partnerships, such as the pledge by several major countries at COP30 to boost biofuels significantly by 2035.

Disclaimer

POLITICAL ADVERTISEMENT

• The sponsor is Neste
• The advertisement is linked to is linked to the ReFuelEU and the Clean Industrial Deal.

More information here.