Galp’s 270 kt Sines HVO/SAF Plant Targets Mid-2026 Startup — Nordic Aviation’s Southern Lifeline

Galp Energia’s new 270,000 tonne-per-year HVO and Sustainable Aviation Fuel (SAF) plant inside the Sines refinery is on schedule to begin production in mid-2026, the company has reiterated. The unit is part of a combined €650 million Final Investment Decision Galp took in September 2023, which also includes the parallel 100 MW green hydrogen plant whose final electrolyser module was set in place on 16 January 2026. Once both units come online, Sines will move from being an oil-and-LNG import hub to producing the most strategically scarce molecules in European decarbonisation: green hydrogen, HVO renewable diesel, and SAF.

The plant: 270 kt/year, 75/25 with Mitsui, EIB-financed

The Sines biofuels unit is structured as a 75% Galp / 25% Mitsui joint venture, with the Japanese trading house contributing roughly €100 million of the €400 million project cost. The European Investment Bank is providing €250 million of the financing as part of a wider €430 million package alongside the green hydrogen unit. The plant will use Hydrogenated Vegetable Oil (HVO) technology to convert used cooking oils, animal fats and other lipid residues into renewable diesel and SAF that are drop-in compatible with existing fossil aviation and road-fuel infrastructure.

At 270,000 tonnes per year, Sines on its own is sized to comply with Portugal’s national share of the EU ReFuelEU Aviation mandate. But the more interesting question for the corridor is what happens to the surplus — and where Nordic airlines fit in.

Why the Nordic carriers care: a structural SAF shortage is here

SAS — the Scandinavian flag carrier — warned in early 2026 that Europe is heading into a structural shortage of e-SAF just as ReFuelEU Aviation rules begin to bite. The mandated SAF share is 2% in 2025, 6% by 2030, 20% by 2035, and 70% by 2050. Scandinavian aviation alone, SAS estimates, will need 36,000 tonnes of e-SAF by 2030 and more than 160,000 tonnes by 2035. No European e-SAF facility had reached Final Investment Decision when SAS issued the warning.

Conventional bio-SAF (HVO/HEFA pathway, like Sines) is a different but equally constrained category. Finnair’s SAF currently comes overwhelmingly from Neste’s Porvoo refinery in Finland, with global SAF production of about 1.5 million tonnes a year scheduled to grow to 2.2 million by 2027. In 2024, only roughly 0.46% of Finnair’s total jet fuel was SAF. Norwegian Air Shuttle, SAS and Finnair will all need a ramped-up procurement strategy long before 2030; relying on a single Finnish supplier is not a position any commercial team is comfortable with.

Sines as the southern leg of a Nordic SAF supply chain

This is where Sines becomes commercially interesting from Stockholm, Oslo, Copenhagen and Helsinki. Galp’s Sines plant is the only large-scale HVO/SAF facility actually under construction in southern Europe with a confirmed mid-2026 mechanical completion. Sines is a deepwater Atlantic port with established petroleum logistics, a connection to the European refinery and pipeline network, and a free industrial zone that can accommodate fuel offtake terminals.

For a Nordic procurement director, the appeal is twofold. First, supply diversification away from a single Neste-dependent line. Second, the Atlantic geography — HVO and SAF can be moved by tanker into Nordic terminals or blended at intermediate ports such as Rotterdam and Antwerp. Sines is closer to Stockholm and Helsinki than the Singapore Neste line. Combined with the 100 MW green hydrogen unit next door, Sines may also become the seed of an e-SAF capacity build-out later in the decade — precisely the e-SAF SAS warned was missing.

Mitsui’s presence is a signal, not a coincidence

Mitsui & Co.’s 25% stake is not just financial. The Japanese trading house has long-standing global SAF and biofuels logistics, including offtake relationships with Asia-Pacific and European airlines. Galp’s decision to partner with Mitsui rather than a domestic offtaker tells you the plant is being built for the international SAF and renewable diesel market rather than purely for Iberian compliance volumes. That commercial structure is exactly what Nordic carriers should be looking for: a developer prepared to sign long-dated international SAF offtake.

Execution risk and the broader Sines cluster

The mid-2026 startup target should be read with the usual caveats. Construction was already advanced in early 2026, and the partner-side commitments — from Mitsui, the EIB and the European Commission’s funding programmes — are firm. But large refinery integrations regularly slip a quarter or two. The more material risk is on the offtake side: SAF buyers have been slow to commit to long-dated contracts at the prices required, even where the regulatory mandate exists.

Galp’s Sines biofuels unit also forms part of a wider industrial cluster taking shape at the port. The MadoquaPower2X 500 MW green hydrogen and ammonia project — backed by Copenhagen Infrastructure Partners — is targeting first ammonia shipment in 2026. Stegra (the Wallenberg-backed Swedish green steel developer) has reserved land at Sines as its most advanced international site. Galp’s 100 MW green hydrogen unit and 270 kt biofuels plant will sit alongside both. Each of those projects is independent, but together they make Sines the most credible green-molecules cluster in southern Europe — and a credible set of supply contracts for Nordic industrial and aviation buyers as the EU mandates ratchet up.

What to watch. Mechanical completion on the biofuels unit; first SAF batch certification under EU ReFuelEU rules; the first announced offtake deal — and whether any of those names are SAS, Finnair, Norwegian, or the Nordic shipping fuel buyers. Each of those would be the clearest proof yet that Sines is becoming what its planners have promised: a southern European supply leg for the Nordic decarbonisation buildout.