Neste Oil and Renewable Algae Energy (RAE), a U.S.-based algae biomass producer, have signed a contingent commercial algae oil offtake agreement. Algae oil is one of the alternatives being researched by Neste Oil for use as a feedstock for producing NEXBTL renewable diesel in the future.

Cooperation with RAE is intended to secure Neste Oil's access to a cost-effective supply of industrial volumes of algae oil in the future. Implementation of the agreement will require RAE to increase its algae oil production capacity and to comply with the requirements of biofuel legislation with strict sustainability criteria in the U.S. and the EU throughout the production chain. RAE anticipates that it will be able to produce commercial-scale volumes of algae oil from 2016 onwards.

The agreement between the two companies is nonexclusive and Neste Oil is actively looking for other partners that are aiming to begin commercial algae oil production.

"Algae oil is well suited for producing Neste Oil's renewable products," said Lars Peter Lindfors, Neste Oil's senior vice president of technology. "The agreement we have just signed is yet another step in our constant work to support the commercialization of the algae industry and to take part in research on new, sustainably produced feedstocks."

"We are honored to partner with Neste Oil," said Jeffrey S. Kanel, CEO of RAE. "Neste Oil is known worldwide as the industry leader, and they are committed to producing a sustainable energy source. This commitment aligns perfectly with RAE's mission and values, and we look forward to assisting Neste Oil to produce renewable fuels that will benefit the world."

Neste Oil is continuing research on new feedstocks and extending its feedstock base in line with its strategy; and is currently the world's only biofuel producer capable of producing premium-quality renewable fuel on a commercial scale from more than 10 different inputs. With NEXBTL renewable diesel capacity of approximately 2 million tons annually (more than 600 MMgy), Neste Oil is the world's largest renewable diesel producer.

Neste Oil has previously announced an offtake agreement with another algae producer and is also a partner in various university-led algae research projects under way in Australia and in Europe that are testing a range of methods for cultivating algae outdoors.