Gunvor Partners with VARO to Launch Major SAF Production Facility

Gunvor Group ("Gunvor") will collaborate with VARO Energy ("VARO") to establish a large-scale SAF manufacturing facility at the Gunvor Energy Rotterdam site through a proposed joint venture.

Since VARO's announcement on September 7, 2023, regarding its plan to develop a major SAF facility with a total feedstock capacity of 350 kt per annum, the project has advanced significantly.

Under the agreement, the costs and risks related to the development of the plant up to the final investment decision (FID) will be equally divided between the parties. Upon reaching the joint FID and obtaining the required regulatory approvals, VARO and Gunvor will establish a project company with equal ownership.

After a thorough project development process, the design basis has been finalized, and the Front-End Engineering Design (FEED) phase is anticipated to be completed by Q4 2024.

The facility is designed to handle a range of feedstocks and will have the flexibility to produce either SAF or HVO end products. This adaptability will enable VARO and Gunvor to maximize value by adjusting production based on market conditions and regulatory requirements.

The future facility will be situated on the brownfield site of Gunvor Energy Rotterdam, leveraging extensive existing infrastructure. This includes a comprehensive transportation and pipeline network, existing utilities, port facilities, and close proximity to major customers and markets in Northern Europe and beyond.

Aviation plays a crucial role in the global economy by connecting people and businesses worldwide, but it is also a significant and rapidly growing source of greenhouse gas emissions. With this investment, VARO and Gunvor aim to aid in the aviation sector’s decarbonization efforts, with the facility’s SAF production capacity expected to meet 7% of the European Union's SAF mandate for 2030.

Torbjörn Törnqvist, CEO of Gunvor, stated: “Achieving large-scale production and adoption of SAF is essential for the airline industry to reach its net-zero emissions target by 2050. We are excited to collaborate with VARO to advance SAF production at our Rotterdam site, which is strategically located near extensive port facilities, major European airports, and a robust energy infrastructure.”

Dev Sanyal, CEO of VARO Energy, commented: “To effectively decarbonize aviation, it is crucial for European SAF supply to expand to meet the rising demand by the decade's end. This requires developing production facilities that utilize existing infrastructure, handle a wide range of feedstocks, and offer the flexibility to produce both HVO and SAF. At VARO, we have designed this project with a focus on cost efficiency to reliably meet our customers' increasing needs.

Forming strong partnerships will expedite this process, and I am thrilled that Gunvor will be joining us as an equal partner. Our next step is to complete the FEED phase this year to advance toward a Final Investment Decision.”