Influence Watch: "Clean Fuel Washington" is actually Big Biofuel

And Big Biofuel is actually mostly Big Finnish Oil

Mar 14, 2021

In our recent Influence Watch, we reported on an active “grassroots” lobbying effort campaign on behalf of House Bill 1091, the low-carbon fuel standard, called Clean Fuel Washington. The thing that caught our eye was how carefully it had been anonymized. Its website, online advertising, and Twitter feed gave little sign of who was behind it.

Because we’re fans of both transparency and of getting to the bottom of things, we were happy to see this pop up at the Public Disclosure Commission a few days after the story ran, in which Clean Fuel Washington reveals that it is neither particularly Washington nor particularly clean.

In fact, it’s a project of Big Biofuel. Of the $175,000 poured into the campaign this year, $150,000 came from Neste USA, a major supplier of renewable diesel nominally based in Houston, Texas. Of the remainder, $20,000 came from Renewable Energy Group,

based in Ames, Iowa, and $5,000 from BTR Energy of Washington, D.C. And Neste USA is a subsidiary of Neste, which is — wait for it — a multi-national oil company based in Finland with renewable diesel refineries in that country, the Netherlands, and Singapore. Although the disclosure form makes it look like the campaign is brand new, it’s been running since early last year.

Now, before the environmental community starts to hyperventilate and call us shills for the fossil fuel industry,

we should point out that this effort is actually much smaller than Affordable Fuel Washington, the “grassroots” campaign that the Western States Petroleum Association and its allies have been running for years to kill the clean fuel standard. And it certainly pales compared to the many millions that Big Oil has poured into misinformation campaigns on climate change over the past few decades.

If you’re keeping score, the clean fuel standard has died in the Senate each of the past two years. That’s where it is now after passing narrowly in the House.

All this is important because the standard would drastically alter the market for gasoline and diesel by forcing fuel suppliers to aggressively reduce the amount of carbon in their fuels in the future. By design, it seeks to redistribute the market for fossil fuels to other things. This is especially true for diesel, which powers trucks and other large equipment that can’t be easily electrified. Effectively, it creates a subsidized market for low-carbon diesel that doesn’t currently exist. Some folks are going to make bank serving that market.

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Along with its environmental benefits, a big selling point of the clean fuel standard is the idea that it would spark a job-creating boom in homegrown biofuels production.

But homegrown isn’t what Neste does, which explains why their involvement in Clean Fuel Washington was hidden until we started digging around.

Here’s what we gleaned from Neste’s website about how its American biofuel business works: It collects raw materials such as used cooking oil from restaurants and ships them overseas to one of its refineries. That waste, along with other raw materials, gets refined into renewable diesel, a lower-carbon replacement for diesel refined from crude oil.

That fuel is then shipped back to U.S. markets, where it qualifies both for a $1 per gallon tax federal biofuel tax credit and state clean fuel standards, which award lucrative tradeable credits to producers of low-carbon fuels. The closest Neste refinery is in Singapore, some 8,000 miles away from Washington’s deepwater ports.

Neste has been selling renewable diesel in California, Oregon, and British Columbia under their clean fuel standards for years but has no refinery in North America. And small wonder, because that Singapore refinery is massive. If our math is right, it’s 370 times larger in capacity than Renewable Energy Group’s Hoquiam refinery, which can refine a million gallons a year. And in 2018, Neste announced a $1.6 billion expansion to double it. That, dear readers, is some serious economy of scale.

So here’s the reason to hide the ball. Remember that market redistribution thing? Renewable diesel Neste sells here would displace fossil diesel currently made by actual people in fire-resistant suits who work at the state’s oil refineries. In effect, that would offshore jobs from Whatcom and Skagit counties to Singapore, while the profits went home to Finland.

Clean Fuels Washington, especially on its Twitter feed, makes like a scrappy environmental crusader. Its campaign is full of messaging like this:

This was served up to us in The New York Times. Well done, ad-targeting robots.

But Neste, which started life back in 1948 as Finland’s state oil company, is still very much in the regular oil business. Its annual report for 2020 shows that 18 percent of its sales came from renewable fuels Although the company has ambitious plans to become carbon-neutral by 2035, more than 75 percent of its sales come from gasoline, diesel, and other fuels made from crude oil.

We reached out to Tim Zenk, Neste’s lobbyist in Washington State, about the company’s operations here and any plans to expand. He replied that another Neste subsidiary, Mahoney Environmental, had recently purchased the used cooking oil division of General Biodiesel, a small Seattle-based producer.

“They plan to expand the waste collection business in Washington, turning it into a regional hub for waste collection,” Zenk wrote in an email to the Observer.

Zenk didn’t respond directly to a follow-up question about any planned refineries and kinda-sorta denied hiding the ball on Clean Fuel Washington.

“Clean Fuel Washington has complied with all required disclosures and filings every step of the way,” Zenk wrote. “We are proud of the support of Neste, which is the world’s largest producer of renewable diesel and jet fuel made from waste, and a company wholly-committed to sustainability. They are actively working to make the world a better place. I wish there were more companies like them.”

The disclosure part is true, but only in a letter-of-the-law kind of way. There’s no requirement that lobbying communication carries sponsor notification the way there is for political campaign advertising. And one of the ways to legally disclose grassroots lobbying is to list it on the lobbyist’s monthly disclosure form. Once we knew where to look, we went back and found similar spending in Zenk’s disclosures for January and February of 2020. But there’s no mention of Clean Fuel Washington anywhere.

Remember to spring forward

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Renewable Energy Group, as we noted last week, does have some Washington bona fides in the form of its Hoquiam biodiesel refinery, although the vast majority of its operations are elsewhere.

Conflict of Interest Disclaimer: In his former life as a strategic communications consultant, your correspondent counted both Imperium Renewables, the former owner of Renewable Energy Group’s Hoquiam biodiesel refinery and Shell’s Puget Sound Refinery as clients.

Finland and the Netherlands are closer if you’re flying, but the Panama Canal pushes that route over 11,000 miles.

To be fair, the existing refineries mostly send their profits elsewhere too.