Galp, Mitsui Finalize Investment on Renewable Diesel, SAF Projects – GWC Mag

Gap and Mitsui have agreed on a joint venture to invest in large-scale renewable diesel and sustainable aviation fuel (SAF) projects next to Galp’s Sines refinery.

Galp, a Portuguese oil company, will control 75% of the joint venture, which overall amounts to about $426 million. The biodiesel and SAF plants will use waste from the company’s refinery to produce the renewable fuels. Both facilities are expected to be usable and running by 2025.

Mitsui is reportedly expected to take charge of the biofuels value chain, including procurement of feedstocks mostly from Asia. Galp will operate the refining process by using technology from Axens, paired with engineering, construction, and procurement expertise from Technip Energies.

Galp will also invest nearly $265 million to produce about 15,000 metric tons of green hydrogen each year that will be used to power operations for both plants. Electrolyzers used to produce green hydrogen will be powered by renewable energy sources and will provide emissions reductions of about 110,000 tons per year. The plant will also use recycled water in its operations.

“This is a significant contribution to the launch of the new industries of the future in Portugal, placing Galp at the forefront of the development of low-carbon solutions necessary for the energy transition,” said Paula Amorim, chairwoman at Galp. “The decisions are based on the expectation that the fiscal and regulatory developments in Portugal will not hinder the success of such large-scale investments.”

Galp’s Clean Energy Transition Strategy

Galp’s approach to the clean energy transition, according to the company, involves a balance between meeting current energy needs and minimizing carbon intensity involved in its activities.

Like many oil companies, Galp has not ended drilling completely — the company currently has plans to begin two offshore drilling projects off the coast of Namibia later this year. Based on some projections, oil will still be needed to power heavy-duty transport, long-haul trucking, and aviation in the coming years, until renewable energy can reach the scale needed for its widespread use across all sectors.

Continued drilling, however, has been discouraged by the International Energy Agency because of its major contributions to climate change. Many environmental groups have also found that ending further offshore drilling would prevent the worst impacts of the climate crisis.

The new projects will contribute to Galp’s vision for an eventual transition to clean energy use in hard-to-decarbonize sectors. Creating SAF through the new project should help address the aviation sector’s increased demand for the fuel, while renewable diesel may be used to lower emissions of any diesel-powered vehicle.