Neste Corp. on Feb. 13 released fourth quarter financial results, reporting that its renewables segment was impacted by both market and operational challenges during the three-month period. Sustainable aviation fuel (SAF) sales, however, were up. 

Heikki Malinen, president and CEO of Neste, explained the renewables segment was 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,” he 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 faced operational challenges last year. While the company has tackled those challenges, he noted they 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. There is no single silver bullet to improve our financial and operative performance. Instead, we need to take steps on many fronts and this work has already started. The planned efficiency measures have personnel impacts and are thus especially difficult for our employees, but at the same time necessary to ensure Neste’s long-term competitiveness and success.”

The fourth quarter comparable sales margin for renewables was $242 per ton, down from $813 per ton during the same period of 2023. For the full year 2024, the comparable sales margin for renewables was $377 per ton, down from $863 per ton the previous year. 

Sales volumes were at 926,000 tons during the fourth quarter, up from 870,000 tons during the same period of the previous year. SAF accounted for 195,000 tons of fourth quarter sales, up from 40,000 tons. 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%, respectfully, 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.

Moving into 2025, Neste said it expects renewable products sales volumes to be up when compared to 2024. Malinen cautioned that the renewables market is expected to continue to be challenging in 2025, and the company does not expect a return to previous years’ exceptional margin levels. He also cited regulatory uncertainties in both the U.S. and European Union as negatively impacting the market. “However, I am confident that with a determined approach we can and we will reverse the current trend in our financial performance while maintaining our investment grade credit rating, fund the critical investments in running projects, and ensure Neste will be successful in the future,” Malinen added.

The renewables segment reported EBITDA of EUR 13 million, for the fourth quarter, down from EUR 433 million during the same period of 2023. Renewables comparable EBITDA for the full year was EUR 514 million for 2024, compared to EUR 1.91 billion in 2023.