Neste Wins EU Innovation Fund Support to Develop New Co-Processing Technology

Neste Corporation has been chosen by the European Commission’s Innovation Fund to receive support for its SCOOP project, an initiative designed to commercialise a new co-processing technology at the company’s refinery in Porvoo, Finland. The successful selection places the project among 61 funded proposals out of 359 applications submitted across Europe.

The Innovation Fund, which channels revenues from the EU Emissions Trading System into climate-focused industrial innovation, targets technologies that can significantly cut emissions in hard-to-abate sectors. Neste’s project met the criteria by focusing on converting industrial residues into renewable energy and chemical solutions.

What the SCOOP Technology Will Do

SCOOP stands for Sustainable Co-Processing of Challenging Raw Materials. It focuses on converting crude tall oil, a residue from the pulp and paper industry, into renewable diesel, sustainable aviation fuel, and bio-based chemical feedstocks.

Crude tall oil is classified under Annex IX A of the Renewable Energy Directive. This means it qualifies as an advanced feedstock that supports EU decarbonisation goals without competing with food crops. Its use represents a circular-economy pathway by valorising a by-product that would otherwise require lower-value processing or disposal.

The project aims to demonstrate that low-carbon residues can be integrated into existing refinery processes with targeted upgrades rather than requiring entirely new production sites.

Grant Agreement Before Final Investment Decision

The next phase of the project involves preparing a detailed grant agreement with the European Climate, Infrastructure and Environment Executive Agency. This step will define technical milestones, compliance conditions, project monitoring structures, and funding disbursement schedules.

Neste emphasises that it has not yet made a final investment decision. The company will assess economic feasibility, technology readiness, and long-term feedstock security before committing to full deployment at the Porvoo refinery. The Innovation Fund support increases the likelihood of investment but does not guarantee it.

Why the Co-Processing Approach Matters

Co-processing is an important transitional technology for Europe’s low-carbon future. It enables renewable feedstocks to be introduced into existing refinery infrastructure. This helps:

• Reduce refinery carbon intensity

• Scale renewable fuels faster and with lower capital expenditure

• Diversify feedstock supplies

• Utilise industrial residues and enhance material efficiency

By integrating tall-oil residues into refining systems, the SCOOP project could lower emissions while supporting industries that depend on renewable chemical building blocks, such as plastics, solvents, and specialty materials.

Benefits for the Forestry and Pulp Sector

If deployed, the SCOOP technology may boost economic opportunities for Europe’s pulp and paper industry. Crude tall oil is produced in significant volumes at pulp mills, and its upgrading into renewable fuels creates new value streams.

This strengthens the link between forestry, bioeconomy, and energy transitions. Improved residue utilisation also supports EU strategies for resource efficiency and waste minimisation.

Key Challenges and Considerations

Despite its potential, several challenges must be addressed:

• Technical integration of residue feedstocks into existing refinery operations

• Variability and long-term availability of crude tall oil

• Economic competitiveness against established renewable-fuel pathways

• Timing and requirements of the final investment decision

• Ensuring strong sustainability performance across the entire value chain

These factors will play a critical role in determining whether the project moves forward into full-scale deployment.

Strategic Implications for Europe’s Net-Zero Transition

The SCOOP project illustrates how industrial innovation, residue valorisation, and climate funding instruments can be combined to support the EU’s long-term climate objectives. If fully implemented, the technology could:

• Strengthen Europe’s supply of advanced renewable fuels

• Expand sustainable feedstocks for chemical production

• Demonstrate how legacy refinery assets can be adapted for the green transition

• Reduce emissions in the transport and materials sectors

• Support the bioeconomy through high-value utilisation of residues

The coming months will be decisive as Neste completes the grant agreement and evaluates the conditions for investment.

Source: www.neste.com