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Gunvor partners with Varo on $600-MM bio-jet fuel site in Rotterdam

(Reuters) - Refiner and trader Varo Energy plans to build a new sustainable aviation fuel (SAF) manufacturing facility at Gunvor's Rotterdam refinery with a $600 MM investment which will meet up to 7% of the EU's 2030 SAF target, the two companies said on Thursday.

The new facility will be wholly owned by Varo and have capacity to produce 245,000 metric tons a year of SAF, with first production set for the fourth quarter 2026, Varo said.

Varo in February signed an initial agreement with Lufthansa to supply it with SAF from 2026 onwards.

Along with SAF, the facility will also produce bio-naphtha and bio-propane, with total feedstock capacity reaching 350,000 tons a year, Varo said.

SAF is produced using waste and renewable biomass sources, as opposed to conventional jet fuel which is refined from crude oil.

Gunvor said it will "further participate through an operations and maintenance agreement and other investments".

The energy trader operates a 75,000 barrel-per-day oil refinery at Rotterdam.

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