Company makes third cut to renewables service outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel prices

(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 service for the 3rd time this year due to falling rates and likewise lowered its anticipated sales volumes, sending the company's share cost down 10%.

Neste stated 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 stayed high.

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

Neste in a statement slashed the anticipated average similar sales margin of its renewables system to in between $360-$480 per tonne of biofuel, below $480-$580 per tonne seen in July and well listed below the $600-$800 seen in February.

The company now likewise expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes instead of the 4.4 million it had anticipated because the start of the year, it included.

A part of the volume cut came from the production of sustainable air travel fuel, of which it is now expected to sell in between 350,000-550,000 tonnes this year, down from in between 500,000 and 700,000 tonnes seen previously, Neste stated.

"Renewable items' list prices have actually been negatively impacted by a considerable decrease in (the) diesel cost during the 3rd quarter," Neste said in a declaration.

"At the exact same time, waste and residue feedstock prices have not reduced and renewable product market value premiums have remained weak," the company included.

Industry executives and experts have stated rapidly expanding Chinese biodiesel producers are looking for new outlets in Asia for their exports, while Shell and BP have actually announced they are stopping briefly growth strategies in Europe.

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

Neste's share cost had actually reversed 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; Editing by Terje Solsvik and Jan Harvey)