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Singapore does not have a very good record when it comes to biodiesel production. High operating costs, coupled with tepid demand, have shuttered several biodiesel plants in the region over the last few years.

One high profile case was that of Australia’s Natural Fuel, which shut its facility on Jurong Island in 2009 after margins were decimated by high oil prices.

In contrast, Finland-based Neste Oil opened its 800,000 tonnes a year Singapore-based biodiesel plant in November last year. The plant cost around €550 million to build. Although most of the renewable diesel will be sold to Europe and the US, where legislation is in place to prompt demand for the fuel, Matti Lehmus, executive vice president of oil products and renewables says Singapore was the obvious choice for the plant’s location.

Singapore is the world’s third largest centre for oil refining and a central location in terms of product and feedstock flows, as well as logistics.