Company makes 3rd cut to renewables service outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel rates

(Adds expert, background, detail in paragraphs 2-3, 9-11)

By Elviira Luoma and Essi Lehto

HELSINKI, Sept 11 (Reuters) - Finnish refiner Neste on Wednesday cut the margin outlook for its biofuel organization for the 3rd time this year due to falling rates and also decreased its anticipated sales volumes, sending the business's share rate down 10%.

Neste said a drop in the price of routine diesel had actually impacted what it can charge for the biofuel it makes in Europe and Singapore, while input expenses for waste and residue feedstock remained high.

A rush by U.S. fuel makers to recalibrate their plants to produce eco-friendly diesel has produced a supply excess of low-emissions biofuels, hammering revenue margins for refiners and threatening to impede the nascent market.

Neste in a declaration slashed the expected average equivalent sales margin of its renewables unit to between $360-$480 per tonne of biofuel, down from $480-$580 per tonne seen in July and well listed below the $600-$800 seen in February.

The business now likewise expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes instead of the 4.4 million it had actually anticipated considering that the start of the year, it added.

A part of the volume cut originated from the production of sustainable aviation fuel, of which it is now expected to offer in between 350,000-550,000 tonnes this year, below in between 500,000 and 700,000 tonnes seen formerly, Neste stated.

"Renewable items' list prices have been adversely impacted by a substantial decrease in (the) diesel rate during the 3rd quarter," Neste said in a declaration.

"At the very same time, waste and residue feedstock costs have not reduced and eco-friendly product market rate premiums have remained weak," the company added.

Industry executives and analysts have said rapidly expanding Chinese biodiesel producers are looking for brand-new outlets in Asia for their exports, while Shell and BP have actually revealed they are pausing growth plans in Europe.

While the cut in Neste's assistance on sales volumes of sustainable aviation fuel came as a surprise, the unfavorable effect on biodiesel margins from a lower diesel price was to be expected, Inderes expert Petri Gostowski said.

Neste's share cost had actually reversed some losses by 1037 GMT but stayed down 5.8% on the day and 48% lower year-to-date. (Reporting by Elviira Luoma, Essi Lehto and Boleslaw Lasocki; Editing by Terje Solsvik and Jan Harvey)