By Dominic Chopping

 

Finnish renewable fuels producer Neste Oyj said late Tuesday it has agreed to establish a 50/50 joint venture with Marathon Petroleum Corp. to produce renewable diesel, following the conversion of Marathon's refinery in Martinez, California.

"We have committed to helping our customers decrease their greenhouse gas emissions by at least 20 million tons of CO2 equivalent annually by 2030," said Neste Chief Executive Peter Vanacker.

"This joint venture will help us in exceeding our commitment as it will bring a substantial amount of renewable diesel to our customers in the U.S."

Neste's total investment will be around EUR900 million euros ($1 billion), inclusive of half of the total project development costs, it added.

The project is expected to increase Neste's renewable products capacity by slightly over 1 million tons per annum, with production of renewable diesel expected to come online in the second half of 2022.

The facility is planned to reach its full annual capacity of 2.1 million tons by the end of 2023, which will increase Neste's total production capacity of renewable products to 5.5 million tons, it says.

Production output from the Martinez Renewable Fuels project will be split evenly between the joint venture partners, and each partner will be responsible for marketing the products under their own brand.

The facility will be operated by Marathon, while both Neste and Marathon will be responsible for sourcing feedstock--renewable, biological material to be converted into fuel--for the joint venture.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

March 02, 2022 03:39 ET (08:39 GMT)

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