Finnish firm Neste Oil opened the world's biggest renewable diesel plant in Singapore on Tuesday, taking advantage of massive palm oil production in nearby Malaysia and Indonesia.
Clean diesel produced from the 550 million-euro ($769 million) plant using feedstocks such as palm oil and animal fat will be marketed in Europe, Canada and the United States, which already have legislation in place supporting biofuels.
"Asia in the next five years is not going to be a big market for us," Neste Oil Corp president and chief executive Matti Lievonen said at the plant's opening.
With an annual capacity of 800,000 metric tonnes, the Singapore facility is the biggest renewable diesel plant in the world, Neste Oil said.
The plant produces Neste Oil's patented NExBTL renewable diesel, which the company says is the cleanest diesel fuel in the world, although it is more expensive than conventional diesel.
NExBTL can be used in all diesel engines and significantly reduces exhaust emissions compared with regular diesel, the company says.
About 45 percent of the facility's feedstock is currently palm oil from neighbouring Malaysia and Indonesia, while the rest comes from other by-products of the palm oil production process and waste animal fat from Australia and New Zealand.
The palm oil industry in both Malaysia and Indonesia has come under pressure from environmental campaigners who believe it causes deforestation and threatens species such as orangutans and rhinos.
Neste Oil said that its Singapore plant had obtained an International Sustainability and Carbon Certification (ISCC) certificate from Germany, guaranteeing that it has met tough environment standards.
Lievonen said the firm had earmarked 80 percent of its research and development for finding ways to produce clean diesel from other feedstocks like algae and microbes.
Algae will not compete for fresh water or land because production plants can be built on wasteland and the algae can be grown in seawater, said the company, adding that research was still in its early stages.
Explore further: EPA mandates ultra-low-sulfur diesel fuel