Company makes 3rd cut to renewables business outlook this year

Reduces both margin and volume outlook

Weaker diesel market hits biofuel costs

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

Neste said a drop in the price of routine 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 stayed high.

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

Neste in a declaration slashed the expected average similar sales margin of its renewables system to 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 anticipates renewables-based sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had actually forecasted 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, down from in between 500,000 and 700,000 tonnes seen previously, Neste stated.

"Renewable items' sales costs have actually been adversely affected by a substantial decline in (the) diesel rate throughout the 3rd quarter," Neste stated in a declaration.

"At the same time, waste and residue feedstock costs have actually not decreased and sustainable product market price premiums have actually stayed weak," the company included.

Industry and experts have actually stated quickly broadening Chinese biodiesel producers are seeking new outlets in Asia for their exports, while Shell and BP have 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 unfavorable impact on biodiesel margins from a lower diesel cost was to be anticipated, Inderes analyst Petri Gostowski said.

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