VARO Reveals $600 Million Investment Strategy for Construction of a Aviation Fuel Production Plant in Rotterdam

VARO Energy, known as "VARO," has unveiled plans to construct a substantial Sustainable Aviation Fuel (SAF) manufacturing facility at the Gunvor Energy Rotterdam site, with a substantial investment of $600 million. This initiative is aimed at assisting its airline clientele in their decarbonization efforts. Notably, this facility is projected to contribute significantly, potentially up to 7%, towards the European Union's 2030 SAF target.

This facility, wholly owned by VARO, will feature a world-class pretreatment unit, ensuring flexibility in utilizing renewable feedstock and optimizing production capabilities. The facility's overall feedstock capacity will be 350 kilotons per annum (kt p.a.), accompanied by a SAF production capacity of 245 kt p.a. It will also produce a combination of bio-naphtha and bio-propane, further enhancing its sustainability profile.

The aviation industry is a critical component of the global economy, facilitating connections between people and businesses across the world. However, it is also identified as one of the fastest-growing contributors to greenhouse gas emissions. VARO's investment in this facility is a testament to its commitment to support the aviation sector's decarbonization efforts by manufacturing the SAF required for airlines to achieve their sustainability goals. This aligns with VARO's establishment of "Customer Lighthouses," designed to aid customers in the "hardest to abate" industries, such as aviation, during their energy transition journey. The first of these partnerships was announced in collaboration with Lufthansa and VARO in February.

SAF, derived from waste and renewable biomass sources, represents a practical and scalable low-carbon solution for the aviation sector. VARO's investment will extend access to SAF for more airline customers, enabling its use in existing aircraft fleets and leveraging the current refueling infrastructure.

According to the International Energy Agency (IEA), European jet fuel demand is projected to increase by over 20% in the next five years. Situated in Rotterdam, a prominent global aviation hub, VARO's forthcoming SAF manufacturing facility is strategically positioned to meet this rising demand. Moreover, its proximity to major markets, alongside port facilities, wastewater treatment, and existing transportation infrastructure (including road, rail, and pipelines), will facilitate both SAF production and distribution. Production is slated to commence by the fourth quarter of 2026, aligning with the anticipated surge in European SAF demand in the coming years. In a scenario where European SAF demand reaches 3.5 million tons per annum (mt p.a.), this facility alone could potentially contribute up to 7% of the EU's mandated 2030 SAF target of 5% by 2030.

The production of SAF falls within VARO's biofuels business, one of the company's five strategic growth pillars under the ONE VARO Transformation strategy. These pillars, which include biomethane and bio-LNG, hydrogen, e-mobility, and carbon removals, capitalize on VARO's core strengths while offering substantial growth potential in the low-carbon transition landscape.

In summary, VARO's ambitious investment in a state-of-the-art SAF manufacturing facility underscores its dedication to advancing sustainable aviation solutions. This project aligns with the aviation industry's efforts to reduce its carbon footprint and transition to greener alternatives. By contributing significantly to the SAF market, VARO is poised to play a pivotal role in supporting the sector's sustainability goals and addressing the challenges of aviation-related emissions in the years ahead.