Neste reports increase in SAF sales despite challenging market for renewables

Announcing its fourth quarter financial results on 13 February, Neste Corporation said that although its renewables segment had been impacted by both market and operational challenges during the three-month period, SAF sales were up.

Neste president and CEO Heikki Malinen said the company’s renewables segment had been negatively impacted by new competitors and increased production capacity.

“While there are regional differences, this global overcapacity resulted in a decline in renewable fuel sales prices and intensified demand for waste and residue raw materials,” Malinen said.

“In addition, the weakening fossil diesel price had a further negative impact on the Renewable Products’ sales prices. Consequently, sales margins fell significantly below previous years’ levels.”

Malinen also said Neste’s renewable refineries had faced operational challenges last year and while the company had tackled those challenges, they had had a negative impact on renewable diesel production and sales, particularly during the fourth quarter.

“In Neste’s current situation, it is obvious that a change of direction is needed,” Malinen said.

“Shortly after I took over as a CEO, we launched a group-wide, comprehensive full potential analysis. This work has now been completed and we have today launched a performance improvement program. The goal is to enhance Neste’s financial performance while securing our strong market position with better cost competitiveness in renewable fuels.”

The fourth quarter comparable sales margin for renewables was US$242/tonne, down from US$813/tonne during the same period of 2023.

For the full year 2024, the comparable sales margin for renewables was US$377/tonne, down from US$863/tonne the previous year.

Fourth quarter sales volumes totalled 926,000 tonnes, up from 870,000 tonnes during the same period of the previous year.

SAF accounted for 195,000 tonnes of fourth quarter sales in 2024, up from 40,000 tonnes in the same period of the previous year.

During the fourth quarter, approximately 53% of volumes were sold into the European market, with 47% sold to North America, compared to 61% and 39%, respectively, during the same period of 2023.

The share of waste and residue inputs was 90% of total renewable materials inputs in 2024, compared to 92% in 2023.

Looking at 2025, Neste said it expected renewable products sales volumes to be up compared to 2024.

Malinen said he expected the renewables market to continue to be challenging in 2025, and the company did not expect a return to the exceptional margin levels of previous years.

“Possible changes in the regulatory framework, especially in the USA and Europe, will have an impact on Neste’s overall supply chain optimisation. Changes in trade policy, such as tariffs in different forms, can also affect Neste’s competitiveness,” he added.

Malinen also said he was confident the company could reverse the current trend in its financial performance.

The renewables segment reported EBITDA of €13M (US$14M) in the fourth quarter, down from €433M (US$467.7M) during the same period of 2023.

Renewables comparable EBITDA for the full year was €514M (US$555M) for 2024, compared to €1.91bn (US$2.06bn) the previous year.