Neste Corp. on Oct. 24 released third quarter financial results, reporting that its renewables segment has been impacted by overcapacity and lower-than-expected voluntary demand for sustainable aviation fuel (SAF).
Heikki Malinen, president and CEO of Neste, said overcapacity in renewable fuel markets is creating pressure on margins.
Neste Corp. on Oct. 24 released third quarter financial results, reporting that its renewables segment has been impacted by overcapacity and lower-than-expected voluntary demand for sustainable aviation fuel (SAF).
With the relatively weak market for renewable products and slower-than-anticipated SAF sales, Neste’s comparable EBITDA for the third quarter was EUR 293 million, compared to EUR 1.047 billion during the same period of last year. Renewable products comparable sales margin was $341 per ton, down from $912 per ton.
For the full year 2024, Neste expects continued market volatility. Renewable products sales volumes, however, are expected be up when compared to last year, reaching approximately 3.9 million metric tons. SAF is expected to account for 350,000 to 550,000 metric tons of that volume. The full-year average comparable sales margins for renewable products is expected to be the range of $360 to $480 per ton.
According to the company, renewable products’ full-year sales volume is impacted by the planned maintenance shutdowns and the ramp up timeline of Martinez Renewables joint operation. Singapore’s new line is scheduled to have an eight-week maintenance shutdown in the fourth quarter, after which full capacity is expected to be reached. The Martinez facility is targeted to be able to run at 100% by the end of the year. Neste also noted it optimizes its production capacity utilization in renewable products according to the market situation. SAF sales are expected to increase towards the end of the year.