WHAT IS IT?
Bio-naphtha is a renewable hydrocarbon liquid chemically identical to fossil naphtha but produced from biological feedstocks such as vegetable oils, animal fats, or used cooking oil (UCO). It is a by-product of Hydrotreated Vegetable Oil (HVO) and Sustainable Aviation Fuel (SAF) production.
HOW IS IT MADE?
Bio-naphtha is co-produced during the hydrotreatment process:
• Feedstock (e.g. palm oil, rapeseed oil, UCO, tallow) is fed into a hydrotreater
• Hydrogen removes oxygen from the fatty acids
• The output is a mix of renewable diesel (HVO), renewable naphtha, and renewable LPG
Bio-naphtha typically represents 5–15% of the total output volume
KEY USES
Drop-in feedstock for steam crackers (replacing fossil naphtha)
Feedstock for bio-based chemicals (bio-ethylene, bio-propylene)
Gasoline blending with renewable content
Solvent applications requiring bio-based certification
WHY IT MATTERS
Petrochemical companies face growing pressure to decarbonise. Bio-naphtha allows them to produce bio-based plastics and chemicals without rebuilding their cracker infrastructure. It commands a significant green premium over fossil naphtha.
CERTIFICATIONS
ISCC (International Sustainability and Carbon Certification) — most widely accepted
RSB (Roundtable on Sustainable Biomaterials)
RED II compliant (EU Renewable Energy Directive)
Certification is critical — buyers pay premium only for certified material
PRICING
Trades at a premium to fossil naphtha. Premium varies by feedstock and certification. UCO-based commands higher premium than virgin vegetable oil-based due to waste feedstock status under RED II.
TRADE CORRIDORS
Tetra relevance: Singapore ↔ Germany corridor. Europe is the largest buyer of certified bio-naphtha. Southeast Asia (Indonesia, Malaysia) are key feedstock suppliers.
KEY DISTINCTION FROM HVO
HVO = renewable diesel fraction (main product)
Bio-naphtha = lighter fraction co-produced alongside HVO
Both come from the same hydrotreatment process