Cepsa partners with Indonesian palm giant Apical’s Bio-Oils on Huelva JV

According to a press release by the company, Cepsa has confirmed its new bio-refinery will be built to produce 2nd generation biofuels

Spanish oil major Cepsa has confirmed that its proposed €1 billion bio-refinery slated to be built in the southern port of Huelva will now be a joint venture with a European entity owned by one of Indonesia’s biggest palm oil producers in a press release Friday, April 14.

The plant, which had previously been announced by Cepsa, is intended to produce so-called ‘second generation’ (2G) biofuels from waste-based feedstocks and was expected to be able to produce 500,000 tonnes of sustainable aviation fuel (SAF) and renewable diesel (RD) every year.

Cepsa will be partnered in the venture by Bio-Oils, the Huelva-based arm of Apical Group – one of Indonesia’s biggest palm oil exporters.

The announcement that the plant will now be a joint venture comes as the industry increasingly worries about the supply of feedstocks into the new high-tech production capacity, with the press release explicitly referencing the strategic nature of the tie-in.

“The new plant will secure the majority of the feedstock supply from organic waste such as agricultural residue or used cooking oils through a global, long-term agreement with Apical, Bio-Oils’ parent company,” the press release said.

That would enable it to “address one of the key challenges facing the industry: access to feedstock.”

Addressing the challenges

Such is the scale of the ambitious plans for new biofuel mandates – particularly those relating to aviation – that vegetable oil and oilseed producers and traders are starting to push back amid fears that there won’t be enough feedstock to go around.

Earlier in March, the UK government set out proposals for plans to expand sustainable aviation fuels but capped its proposals at 2040 – citing concerns over the state of feedstock supply.

The European Union, meanwhile, has set out proposals to ensure 63% of the fuel used on outbound flights leaving the bloc will be sustainable fuels by 2050, while the USDA expects US aviation to require 36 billion gallons of SAF a year to meet decarbonization plans.

The new facility is expected to host two pre-treatment units and is expected to start operating from the first half of 2026.

The joint venture builds on the existing relationship between the two companies, with the CEO of Bio-Oils, Oscar Garcia, describing Cepsa as the company’s “largest customer” with Cepsa expecting to have a nameplate capacity of 2.5 million tonnes of biofuels by 2030.

Of that total volume, around 800,000 tonnes is expected to be SAF – enough, the press statement says, to power a plane around the world 2,000 times.

Data from flight tracking software providers Flightradar24 shows on average over the last seven days, there are just under 115,000 flights per day currently operating, hinting at the scale of the challenge ahead.

Closing that gap between expected demand and likely supply represents a significant investment opportunity,

“This alliance is in line with the European Green Deal and the European Commission’s Fit for 55 package... The agreement will serve to position Spain as a benchmark in the supply of SAF to airlines,” the press statement said.

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