Neste reports strong 2022 performance for renewables

Neste Corp. on Feb. 8 released fourth quarter and full year 2022 financial results, reporting strong performance for its renewable products segment. Renewable diesel demand remained robust and the company highlighted plans for increased sustainable aviation fuel (SAF) production.

Neste President and CEO Matti Lehmus said the company’s renewables segment posted strong full year comparable EBITDA of EUR 1.762 billion, up from EUR 1.46 billion in 2021. Renewable diesel demand remained robust, but feedstock markets continued to tighten during 2022, he said. Despite higher feedstock costs, Lehmus said Neste was able to increase its comparable sales margin to an average of $804 per ton, up from $715 per ton in 2021. Waste and residues accounted for 95 percent of feedstock last year, up from 92 percent the previous year.

Renewables sales volumes for 2022 reached 3.03 million tons, in line in the previous year. Lehmus said sales volumes reflected good operational performance in a year with multiple scheduled plant shutdowns.

Lehmus also discussed facility improvement projects, noting that an expansion project underway at Neste’s Rotterdam refinery will boost total renewable product capacity at the facility by 1.3 million tons per year. That project, expected to be complete during the first half of 2026, will boost total renewable product capacity at Rotterdam to 2.7 million tons annually, including 1.2 million tons of SAF.

In the U.S., Neste is working in a 50/50 joint operation with Marathon Petroleum to convert Marathon’s refinery in Martinez, California, to renewable diesel production. That project is expected to boost Neste’s renewable products capacity by more than 1 million tons per year by the end of 2023.

According to Lehmus, Neste’s renewable products capacity expansion project in Singapore reached mechanical completion at the end of 2022 and is currently on schedule for startup by the end of the first quarter of 2023. The expanded Singapore refinery includes an optionality to produce up to 1 million tons per year of SAF. Neste’s total SAF production capacity is expected to reach 1.5 million tons per year by the beginning of next year, increasing to 2.2 million tons per year by the end of 2026, he said.

Moving into 2023, Neste expects first quarter renewable products sales volumes to be down when compared to the same period of 2022. That expected decrease is primarily attributed to a one-month shutdown at the Rotterdam refinery due to an occurrence of a fire in a process unit during late December, Lehmus said. That decrease is expected to be partly offset by the first volumes from the Marathon joint venture. Lehmus also noted that waste and residue markets are expected to remain tight and volatile as demand continues to be robust. The first quarter comparable sales margin for renewables is currently expected to be in the range of $825 to $925 per ton, supported by attractive waste and residue prices in the beginning of the year.