Company makes 3rd cut to renewables business 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 Neste on Wednesday cut the margin outlook for its biofuel service for the third time this year due to falling rates and likewise decreased its anticipated sales volumes, sending out the company's share rate down 10%.

Neste stated a drop in the rate of regular diesel had actually affected what it can charge for the biofuel it makes in Europe and Singapore, while input expenses for waste and residue feedstock stayed high.

A rush by U.S. fuel makers to recalibrate their plants to produce sustainable diesel has developed a supply glut of low-emissions biofuels, hammering profit margins for refiners and threatening to restrain the nascent industry.

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

The company now also expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes instead of the 4.4 million it had anticipated since the start of the year, it included.

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

"Renewable products' prices have actually been negatively impacted by a substantial decline in (the) diesel cost throughout the 3rd quarter," Neste stated in a statement.

"At the same time, waste and residue feedstock prices have not decreased and sustainable item market price premiums have actually stayed weak," the business included.

Industry executives and analysts have actually stated quickly 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 cost was to be anticipated, Inderes expert Petri Gostowski stated.

Neste's share cost had actually reversed some losses by 1037 GMT however remained down 5.8% on the day and 48% lower year-to-date. (Reporting by Elviira Luoma, Essi Lehto and Boleslaw Lasocki