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. via Neste 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.

BRUSSELS — Powerful political allies helped automakers force the EU to water down climate laws for cars — and now the aviation sector is borrowing those tactics. Their big target is getting the EU to dilute its mandate forcing airlines to use increasing amounts of cleaner jet fuels, alternatives to kerosene that are also much more expensive and harder to source. Aviation is emerging as the next crucial stress test for the EU’s climate agenda, as key leaders push to do whatever it takes to help struggling European businesses. With industry and allied governments pressing for relief from costly green rules, the fight will show how far Brussels is willing to go — and what it is willing to give up — in pursuit of its climate goals. “I will make a bet today that what happened to the car regulation will happen to the SAF [Sustainable Aviation Fuels] regulation in Europe,” French energy giant TotalEnergies CEO Patrick Pouyanné predicted at the World Economic Forum in Davos earlier this month. Carmakers provide a model on how to get the EU to backtrack. The bloc mandated that no CO2-emitting cars could be sold from 2035, essentially killing the combustion engine and replacing it with batteries (possibly with a minor role for hydrogen). But many carmakers — allied with countries like Germany, Italy and automaking nations in Central Europe — pushed back, arguing that the 2035 mandate would destroy the car sector just as it is battling U.S. President Donald Trump’s tariffs, sluggish demand and a rising threat from Chinese competitors. “I will make a bet today that what happened to the car regulation will happen to the SAF [Sustainable Aviation Fuels] regulation in Europe,” Patrick Pouyanné said. | Ludovic Marin/ AFP via Getty Images In the end, the European Commission gave way and watered down the 2035 mandate, which will now only aim to cut CO2 emissions by 90 percent. AVIATION DEMANDS The aviation sector has a similar list of issues with the EU. It is taking aim at a host of other climate policies, such as including aviation in the bloc’s cap-and-trade Emissions Trading System and intervening on non-CO2 impacts of airplanes like contrails — the ice clouds produced by airplanes that have an effect on global warming. Brussels introduced several regulations over the last 15 years to address the growing climate impact of air transport, which accounts for about 3 percent of global CO2 emissions. Those policies include the obligation to use sustainable aviation fuels, to put a price on carbon emissions and to take action on non-CO2 emissions. Each of these green initiatives is now under attack. The ReFuelEU regulation requires all airlines to use SAF for at least 2 percent of their fuel mix starting this year. That mandate rises to 6 percent from 2030, 20 percent from 2035 and 70 percent by 2050. “Today, all airline companies are fighting even the 6 percent … which is easy to reach to be honest,” Pouyanné said, but then warned, “20 percent five years after makes zero sense.” He is echoed by CEOs like Ryanair’s combative Michael O’Leary, who called the SAF mandate “nonsense.” “It is all gradually dying a death, which is what it deserves to do,” O’Leary said last year. “We have just about met our 2 percent mandate. There is no possibility of meeting 6 percent by 2030; 10 percent, not a hope in hell. We’re not going to get to net zero by 2050.” Brussels-based airline lobbies are not calling for the SAF mandate to be killed, rather they are demanding a book-and-claim system. Under such a scheme, airlines could claim carbon credits for a certain amount of SAF, even if they don’t use it in their own aircraft. They would buy it at an airport where it’s available and then let other airlines use it. That would make it easier for airlines to meet the SAF mandate even if the fuel is not easily available. However, so far the Commission is opposed. LOBBYING BATTLE The car coalition only worked because industry allied with countries, and there are signs of that happening with aviation. The sector’s lobbying effort to slash the EU carbon pricing could find an ally in the new Italo-German team-up to promote competitiveness. The German government last year announced a plan to cut national aviation taxes — with the call made during the COP30 global climate conference, something that angered the German Greens. Italian Prime Minister Giorgia Meloni and German Federal Chancellor Friedrich Merz attend the Italy-Germany Intergovernmental Summit at Villa Doria Pamphilj. | Vincenzo Nuzzolese/LightRocket via Getty Images Italian Prime Minister Giorgia Meloni said Friday that she and German Chancellor Friedrich Merz wanted to start “a decisive change of pace … in terms of the competitiveness of our businesses.” “A certain ideological vision of the green transition has ended up bringing our industries to their knees, creating new dangerous strategic dependencies for Europe without, however, having any real impact on the global protection of the environment and nature,” she added. Her far-right coalition ally, Italian Transport Minister Matteo Salvini, has called the ETS and taxes on maritime transport and air transport “economic suicide” that “must be dismantled piece by piece.” COMMISSION SAYS NO As with the 2035 policy for cars, the European Commission is strongly defending its policy against those attacks. Apostolos Tzitzikostas, the transport commissioner, stressed the EU’s “firm commitment” to stick with aviation decarbonization policies. “Investment decisions and construction must start by 2027, or we will miss the 2030 targets. It is as simple as that,” the commissioner said in November when announcing the bloc’s new plans to boost investment into sustainable aviation and maritime fuels. Climate campaigners fought hard against the car sector’s efforts to gut 2035, and now they’re gearing up for another battle over aviation targets. “The airlines’ whining comes as no surprise — yet it is disappointing to see airlines come after such a fundamental piece of EU legislation,” said Marte van der Graaf, aviation policy officer at green NGO Transport & Environment. She was incensed about efforts to dodge the high prices set by the EU’s ETS in favor of the U.N.’s cheaper CORSIA emissions reduction scheme. Airline lobbyA4E said its members paid €2.3 billion for ETS permits last year. “By 2030, [the ETS cost] should rise up to €5 billion because the free allowances are phased out,” said Monika Rybakowska, the lobby’s policy director.  A recent study by the think tank InfluenceMap found that airlines are working to increase their impact on policymakers by aligning their positions on ETS. T&E also took aim at a recent position paper by A4E that asked the EU to postpone measures to curb non-CO2 pollution — such as nitrogen oxides and soot particles that, along with water vapor, contribute to contrails. The A4E paper said that “the scientific foundation for regulating non-CO2 effects remains insufficient” and “introducing financial liability risks misdirecting resources.” This is “an outdated excuse,” responded T&E, noting that the climate impact of contrails has been known for over 20 years.

LONDON — The U.K. government is not moving fast enough to slash planet-destroying emissions from aviation, former Prime Minister Tony Blair has warned.  Governments in Westminster and elsewhere must step up progress in developing cleaner alternatives to traditional jet fuel, according to a report today from Blair’s think tank, seen by POLITICO.  “Aviation is and will continue to be one of the world’s most hard-to-abate sectors. Sustainable aviation fuel (SAF) mandates in Europe and the U.K. are ramping up, but the new fuels needed are not developing fast enough to sufficiently reduce airline emissions,” the Tony Blair Institute (TBI) said, referring to policies designed to force faster production of cleaner fuel.  The U.K. has made the rollout of SAF central to hitting climate targets while expanding airport capacity.  It is the third intervention on U.K. net-zero policy from the former prime minister this year.  Earlier this month, the TBI urged Energy Secretary Ed Miliband to drop his pursuit of a clean power system by 2030 and focus instead on reducing domestic bills. This followed a report in April claiming the government’s approach to net zero was “doomed to fail” — something which caused annoyance at the top of the government and “pissed off” Labour campaigners then door-knocking ahead of local elections.  Aviation contributed seven percent of the U.K.’s annual greenhouse gas emissions in 2022, equivalent to around 29.6 million tons of CO2. The Climate Change Committee estimates that will rise to 11 percent by the end of the decade and 16 percent by 2035.  SAFs can be produced from oil and feedstocks and blended with traditional fuels to reduce emissions. The U.K. government’s SAF mandate targets its use in 40 percent of jet fuels by 2040 — up from two percent in 2025.  Chancellor Rachel Reeves said in January that U.K. investment in SAF production will help ensure planned airport expansion at Heathrow —  announced as the government desperately pursues economic growth — does not break legally-binding limits on emissions.  The TBI urged Energy Secretary Ed Miliband to drop his pursuit of a clean power system by 2030 and focus instead on reducing domestic bills. | Wiktor Szymanowicz/Getty Images The TBI said that, while it expects efficiency gains and initial SAF usage will have an impact on emissions, a “large share of flights, both in Europe and globally, will continue to run on conventional kerosene.” A spokesperson for the Department for Transport said the government was “seeing encouraging early signs towards meeting the SAF mandate.” They added: “Not backing SAF is not an option. It is a core part of the global drive to decarbonise aviation. SAF is already being produced and supplied at scale in the U.K., and we recently allocated a further £63 million of funding to further grow domestic production.” The TBI said carbon dioxide removal plans should be integrated into both jet fuel sales and sustainable aviation fuel mandates, placing “the financial responsibility of removals at the feet of those most able to pay it.” 

LONDON — The British government has less than a month to save 160 jobs at a major bioethanol producer, its bosses are warning, as the industry reels from the U.K.-U.S. trade deal signed by Donald Trump and Keir Starmer. Vivergo Fuels Managing Director Ben Hackett said his company is at risk of closure and that if the government can’t provide financial support in time, redundancies will begin imminently. “The consultation process legally has to run for a minimum of 45 days and that day is Aug. 17, so the first redundancies could take place the week of Aug. 18,” Hackett said. “The clock is ticking, the government’s very much aware of our timelines and is now working with us on that negotiation.” As part of the U.K.-U.S. Economic Prosperity Deal, struck between the Trump administration and Starmer’s U.K. government, the U.K. granted Washington a new tariff-free quota of up to 1.4 billion liters of ethanol, which is used in farming and as a fuel source. Hackett said this is worth “the entire” U.K. bioethanol market. Previously, U.S. ethanol imported into the U.K. faced tariffs ranging from 10 to 50 percent. “Those tariffs are in place, not because we’re worse at making ethanol than the U.S. — they use genetically modified corn, antibiotics, they have lower energy costs and they have tax subsidies from the government,” explained Hackett. “The tariffs were just to say we wanted a level playing field.” Britain’s chemical industry, including multinational INEOS, the Chemical Business Association and px Group, are already urging the government to intervene, warning that the closure of Vivergo Fuel would not only put jobs at risk, but also billions in investment — as well as the country’s long-term energy security. Last month, Vivergo signed a £1.25 billion memorandum of understanding with Meld Energy to supply feedstock for a new sustainable aviation fuel plant at Saltend, Hull. Separately, it’s planning a £250 million hydrogen production facility on the same site. “If we disappear, that goes because there’s no-one to take the green hydrogen and there’s no raw material to turn into aviation [fuel],” warned Hackett. “You’re putting at risk a billion pound investment into the Saltend site,” he said. “Hull is not the most economically advantaged part of the U.K. That billion pounds of investment would have added thousands more jobs. By taking away that bioethanol industry, you lose all future growth.” Hackett says the British government has been “relatively slow to come to the table.” It has now appointed an adviser to hear the business case and recommend whether Vivergo should receive state financial support. “Unless we get sufficient concrete assurances from the government, then I will go ahead and close the business,” said Hackett. The warning comes as a string of chemicals and bioeconomy producers shutter operations, including INEOS’s refinery at Grangemouth and SABIC’s Olefins 6 cracker on Teesside. The Ensus bioethanol plant at Wilton is also at risk of closure. A British government spokesperson said: “We recognise this is a concerning time for workers and their families which is why we entered into negotiations with the company on potential financial support last month.” They added: “We will continue to take proactive steps to address the long-standing challenges the company faces and remain committed to working closely with them throughout this period to present a plan for a way forward that protects supply chains, jobs and livelihoods.”