Neste delivered 23 kilotons of SAF in Q1, aiming for 30%-50% more in Q2
Neste says that it delivered 23 kilotons of Sustainable Aviation Fuel (SAF) in the first quarter of 2023. The energy company says it tripled its SAF volumes over the last year and will produce more this year as its Singapore (pictured) refinery ramps up.
The company’s renewable products had a comparable EBITDA of €415 million in the first quarter compared with €419 million in 2022. Sales were hit by a small fire at Neste’s Rotterdam refinery in December 2022 that delayed production.
“We had a strong start to 2023, which will be a year of growth for Neste’s renewables businesses,” said Matti Lehmus, president and CEO, Neste. “In renewable products our comparable sales margin per ton was at a very high level.”
Neste’s comparable EBITDA in the first quarter was €830 million, up 44 % from €578 million in 2022.
The company says that second quarter renewable diesel and SAF sales volumes are expected to be between 30% and 50% higher than in the first quarter of 2023.
“We are increasing our SAF capabilities both in Singapore and Rotterdam, targeting the optionality to produce annually up to 1.5 Mt of SAF in 2024. Our Rotterdam expansion project is proceeding well, increasing our nameplate capacity in renewable products to 6.8 Mt by the end of 2026, with SAF optionality totalling 2.2 Mt,”said Lehmus.
The company says that second quarter renewable diesel and SAF sales volume is expected to be 30% to 50% higher than in the first quarter of 2023 as it increases capacity.
Carl Nyberg, executive VP – renewables, Neste, said that the Martinez joint-venture with Marathon started its first phase in February.
“The next phase, including the pre-treatment, is expected to start up in autumn 2023 and the third phase enabling the full production capacity of 2.1 million tonnes per year is targeted by the end of the year,” said Nyberg. “The Singapore renewables capacity expansion project started up production after mid-April with a minor delay versus our internal target of end Q1. Following a complex construction project over more than four years, this was a great achievement and I congratulate the whole team for a successful and safe start up. The focus now is on ramping up the production and sales in the coming quarters.”
On the analyst call Lehmus was asked about SAF pricing. “The market is now forming a very typical pricing formula,” he said. “It is similar to what we see on the renewable diesel side where the price is linked to fossil quote – in the case of aviation typically the fossil jet quote - and there is a premium. We have not started comparing how that exact premium compares to the renewable diesel now. We have optimized based on the margin, so we will over time, ensure that the margin contribution is equal or strengthening also for aviation.”