Company makes third cut to renewables organization outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel costs

(Adds analyst, 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 service for the 3rd time this year due to falling prices and also decreased its anticipated sales volumes, sending out the company's share rate down 10%.

Neste said a drop in the price of regular diesel had impacted what it can charge for the biofuel it makes in Europe and Singapore, while input expenses for waste and residue feedstock remained high.

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

Neste in a statement slashed the expected typical comparable 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 also expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had forecasted considering that the start of the year, it included.

A part of the volume cut originated from the production of sustainable aviation fuel, of which it is now anticipated to offer between 350,000-550,000 tonnes this year, down from between 500,000 and 700,000 tonnes seen formerly, Neste stated.

"Renewable items' sales prices have been adversely impacted by a considerable decline in (the) diesel rate during the 3rd quarter," Neste stated in a statement.

"At the very same time, waste and residue feedstock prices have not reduced and renewable product market value premiums have actually stayed weak," the company added.

Industry executives and experts have stated quickly expanding Chinese biodiesel producers are looking for brand-new outlets in Asia for their exports, while Shell and BP have actually revealed they are pausing growth strategies in Europe.

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

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