Neste released third quarter financial results on Oct. 27, reporting that its Renewable Products segment performed well despite an adverse impact from margin hedging and some logistical delays in product deliveries.

The Renewable Products segment reported a comparable EBITDA of EUR 389 million, up from EUR 357 million reported for the same period of last year. Due to challenges in outbound logistics, Neste said part of the planned late September product deliveries were postponed until October.

Renewable Products sales volumes were 689,000 tons, impacted by both the logistical delays and the scheduled maintenance turnaround at Neste’s Singapore refinery. The share of waste and residue feedstocks for the quarter was at 96 percent. The company’s renewable diesel production capacity had an average utilization rate of 80 percent during the third quarter, down from 83 percent last year, reflecting the scheduled maintenance at the Singapore facility.

Comparable sales margin for Renewable Products averaged $756 per ton, up slightly from the third quarter of 2021, which Neste President and CEO Matti Lehmus called “a good achievement considering the volatile product and feedstock markets, the negative impact of our margin hedging, and the delayed sales.”

Moving into the fourth quarter, Renewable Products sales volumes are expected to be up when compared to the preceding three-month period, with the sales margin expected to be in the range of $700 to $800 per ton. Waste and residue markets are also expected to remain tight and volatile. Utilization rates for Neste’s renewables production facilities are expected to remain high during the fourth quarter, except for a scheduled seven-week turnaround at the Rotterdam refinery during the three-month period.

Lehmus also briefly discussed Neste’s work to boost renewables production capacity. He said the ongoing expansion project in Singapore is approaching mechanical completion and is proceeding according to schedule for targeted startup at the end of the first quarter of 2023. The Rotterdam expansion project is also on track, he said, with the majority of the equipment purchases already done. In addition, Neste’s 50/50 joint venture with Marathon Petroleum in the California is moving forward. The joint operation, called Martinez Renewables, is expected to begin production in early 2023 with pretreatment capabilities expected to come online during the second half of 2023. According to Lehmus, the California facility is expected to be capable of producing 2.1 million tons per year by the end of next year. Work is also ongoing related to the possible conversion of Neste’s Porvoo refinery in Finland to renewables.

A full copy of Neste’s Q3 report can be downloaded from the company’s website.