Company makes third cut to renewables company outlook this year

Reduces both margin and volume outlook

Weaker diesel market hits biofuel costs

(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 business for the third time this year due to falling costs and also lowered its expected sales volumes, sending out the company's share price down 10%.

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

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

Neste in a statement slashed the anticipated typical similar 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 also anticipates 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 included.

A part of the volume cut came from the production of sustainable aviation 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 stated.

"Renewable products' sales costs have actually been adversely affected by a considerable decline in (the) diesel cost during the 3rd quarter," Neste said in a declaration.

"At the same time, waste and residue feedstock rates have actually not decreased and eco-friendly item market value premiums have actually remained weak," the business added.

Industry executives and analysts have actually stated quickly broadening Chinese biodiesel manufacturers are looking for new outlets in Asia for their exports, while Shell and BP have actually announced they are pausing expansion plans in Europe.

While the cut in Neste's assistance on sales volumes of sustainable air travel fuel came as a surprise, the negative influence on biodiesel margins from a lower diesel rate was to be anticipated, Inderes expert Petri Gostowski stated.

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 Lasocki