Neste to ramp up Singapore biofuels output in 1H Nov
Finnish biofuels producer Neste expects a renewable diesel and sustainable aviation fuel (SAF) production line at its 2.6mn t/yr Singapore refinery to restart in first-half November.
The line is targeted to reach approximately 75pc capacity utilisation by end-2023, and will contribute to SAF sales volumes in 2024, according to the firm's January-September interim report released on 26 October.
The biofuels producer had officially completed the production line in May, which raised the plant's total production capacity to 2.6mn t/yr from 1.3mn t/yr. But the line was shut in June owing to unexpected equipment repairs. Neste said it restarted renewable diesel production at the line in early August, but the ramp-up of renewable diesel and SAF output slowed in September owing to "additional equipment inspection and repair works". The inspection and repair works was expected to affect approximately 100,000t of sales volumes, mainly impacting fourth-quarter sales.
Neste's renewable product business made an operating profit of €130mn ($137.15mn) in the third quarter, bringing January-September operating profits to €324mn. This was 44pc lower than the same period a year earlier, after a period of "exceptionally strong" sales margins for waste-based biofuels following the beginning of the Russia-Ukraine war.
Neste's fourth-quarter comparable sales margins for renewable products — or the sales margin per unit of product sold — is projected to be $800-900/t, slightly lower than the $912/t in the third quarter. Margins were at $800/t in the second quarter.
The high third-quarter margins were "supported by a strong diesel price and successful global optimization across feedstocks, markets and products", which compensated for the increase in waste and residue feedstock prices compared to the previous quarter, president and chief executive Matti Lehmus said.
The share of waste and residue feedstocks in Neste's renewable fuel production fell to 92pc in the third quarter, the lowest in at least a year.
Neste sold a total of 860,000t of renewable diesel and SAF in the third quarter, bringing its total sales over January-September to 2.46mn t, about 9.2pc higher on the year. The proportion of renewable product sales to North America increased to 45pc, up from 34pc during the same period the previous year, while sales to Europe fell to 55pc from 66pc. The company will publish its fourth-quarter and full-year results on 8 February next year.
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