European energy company Varo Energy has announced plans to invest US$600M in building a sustainable aviation fuel (SAF) facility at the Gunvor Energy Rotterdam site in the Netherlands.

The 100% VARO-owned facility would have a total feedstock capacity of 350,000 tonnes/year, with a SAF production capacity of 245,000 tonnes/year alongside a mixture of bio-naphtha and bio-propane, the company said on 7 September.

Production was expected to start by the fourth quarter of 2026.

Located in Rotterdam at the centre of one of the world’s major aviation hubs, VARO said its new manufacturing facility would help meet growing SAF demand.

According to the International Energy Agency (IEA), European jet fuel demand is set to grow by more than 20% over the next five years.

“This new manufacturing facility alone will provide up to 7% of the EU’s 2030 SAF target,” VARO CEO Dev Sanyal said.

As well as being close to major markets the facility was also located alongside port infrastructure, wastewater treatment and existing road, rail and pipelines, enabling SAF production and distribution, the company said.

The company said the investment in the facility was part of its ONE VARO Transformation strategy, in which it aimed to produce more than 250,000 tonnes/year of biofuels by 2026 and more than 500,000 tonnes/year in the long-term.

A Swiss-based private company, VARO is owned by The Carlyle Group (66.66%) and Vitol (33.33%).