Company makes 3rd cut to renewables service outlook this year

Reduces both margin and volume outlook

Weaker diesel market hits biofuel prices

(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 service for the 3rd time this year due to falling rates and also lowered its anticipated sales volumes, sending the business's share rate down 10%.

Neste stated a drop in the rate of routine 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 created a supply glut of low-emissions biofuels, hammering earnings margins for refiners and threatening to hinder the nascent industry.

Neste in a declaration slashed the anticipated typical similar sales margin of its renewables system to in 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 business now also expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had predicted because the start of the year, it added.

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

"Renewable items' sales prices have been negatively affected by a substantial decrease in (the) diesel price during the third quarter," Neste said in a statement.

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

executives and analysts have actually stated quickly broadening Chinese biodiesel producers are looking for new outlets in Asia for their exports, while Shell and BP have actually revealed they are stopping briefly expansion strategies in Europe.

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

Neste's share cost had 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