Eni said it was unable to make money on its hydrotreated vegetable oil (HVO) production last year, even as oil products demand and margins recovered.
Talking after the firm's 2021 financial results, chief operating officer for energy evolution Giuseppe Ricci said Eni's operating profit for the sector was "slightly negative". The company runs two production plants, a 750,000 t/yr unit at Gela, Sicily, and a 360,000 t/yr plant at Venice.
Ricci said 2021 was "a strange year", with "lots of pressure on margins because of the price of feedstock." Eni cited the effects of Covid-19 on demand, rising energy costs and the high price of palm oil cargoes from Indonesia and Malaysia. It reiterated today it plans to eliminate palm oil from HVO production by 2023.
Ricci said HVO margins should improve this year. European firms Shell, BP and TotalEnergies all recently championed their integrated models as the best means to tackle the energy transition and shield them from cost inflation in renewable sectors, and Ricci said Eni is following suit with agreements in countries including Tunisia, Kenya and Angola to produce its own feedstock, likely to be castor oil. This would "allow us to have feedstock available, controlling the supply chain," he said.
