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, information 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 company for the 3rd time this year due to falling rates and also reduced its anticipated sales volumes, sending the business's share price down 10%.

Neste said a drop in the price of regular 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 created a supply excess of low-emissions biofuels, hammering revenue margins for refiners and threatening to hinder the nascent industry.

Neste in a statement slashed the anticipated average equivalent sales margin of its renewables system to in between $360-$480 per tonne of biofuel, below $480-$580 per tonne seen in July and well 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 rather of the 4.4 million it had predicted 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 sell in between 350,000-550,000 tonnes this year, below in between 500,000 and 700,000 tonnes seen formerly, Neste said.

"Renewable products' list prices have been adversely affected by a significant decrease in (the) diesel rate throughout the third quarter," Neste stated in a declaration.

"At the very same time, waste and residue feedstock costs have actually not reduced and renewable product market cost premiums have remained weak," the business added.

Industry executives and experts have actually stated quickly expanding Chinese biodiesel producers are looking for 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 air travel fuel came as a surprise, the negative effect on biodiesel margins from a lower diesel rate was to be expected, Inderes analyst Petri Gostowski said.

Neste's share price 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; Editing by Terje Solsvik and Jan Harvey)