May 17, 2020

Total begins production at $310mn La Mède Biorefinery, enhances palm oil procurement process

Total
Biofuel
palm oil
refinery
Harry Menear
3 min
French energy giant Total completes the transformation of its La Mède refinery into a biofuel production facility, alongside taking steps to enhance sustainability and transparency in its supply chain
Leading French energy company Total announced today the commencement of production at its new fuel refinement plant in southeastern France. The La Mède...

Leading French energy company Total announced today the commencement of production at its new fuel refinement plant in southeastern France. The La Mède biorefinery, previously a traditional oil refinery, now produces biofuel. The conversion project was launched in 2015 and represents an expenditure by Total of over US$310mn. 

The facility is now comprised of a biorefinery with a capacity of 500,000 tonnes of biofuel per year, an 8MW solar farm, a 1.3mn cubic meter logistics and storage hub, and a 2,500 annual capacity training centre. 

La Mède will produce both biodiesel and biojet fuel for the aviation industry. It was specifically designed to process all types of oil. Its biofuels will be 60 to 70% from made up of 100% sustainable vegetable oils (rapeseed, palm, sunflower, etc.) and 30 to 40% comprised of treated waste (animal fats, cooking oil, residues, etc.) to promote a circular economy.

As part of an agreement with the French Government in May 2018, Total has pledged to process no more than 300,000 tonnes of palm oil per year — less than 50% of the total volume of raw materials needed — and at least 50,000 tonnes of French-grown rapeseed, creating another market for domestic agriculture.

“I’d like to thank the teams for all their hard work these last four years to convert our La Mède refinery,” said Bernard Pinatel, President, Refining & Chemicals. “Biofuels are fully renewable and an immediately available solution to cut carbon emissions from ground and air transportation. When produced from sustainable raw materials, as at La Mède, they emit over 50% less carbon than fossil fuels. Our biorefinery will allow us to make biofuels in France that were previously imported.”

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In addition to the opening of the new facility, Total is taking steps to ensure that the 300,000 tonnes of palm oil that are processed each year are procured in the most sustainable way possible. 

The company has added its own tighter controls and auditing of sustainability and respect for human rights to certification, selecting responsible suppliers and limiting their number, so that improvement plans can be jointly drafted and verifiably deployed, according to a company press release. 

Suppliers will be required to join the Roundtable on Sustainable Palm Oil, an organization created in 2004 by producers, manufacturers and NGOs to promote responsible, sustainable palm oil production. 

In order to create further transparency in its supply chain, Total is publishing the list of mills from which its palm oil is sourced on its website after every delivery.

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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