Neste Capital Markets Day 2017

Delivering profitable growth - Leverage target and dividend policy revised - Seite 2

  
Global renewables growth

Neste is the global leader in the renewable diesel market, and is committed to developing significant business from outside road transportation markets by 2020. Neste has developed unique competitive advantages in flexible feedstock supply, global supply chain, and low-carbon renewable drop-in solutions.  Sales volumes of the 100% renewable diesel delivered to end-users are targeted to grow from approx. 25% in 2017 to 50% of the total sales in 2020. The company has built a strong low-quality waste and residue feedstock position and intends to develop that further by commercial and technological solutions.

Neste sees great potential in many new renewable product applications such as renewable jet fuel and bio-based chemicals, where it can provide distinct advantages to its customers by decreasing their carbon footprint. Neste has introduced a Green Hub concept to promote renewable jet fuel use through airport partnerships, and the first partnership was recently announced with the Geneva Airport.  Following a successful production trial, Neste aims to make the first commercial delivery of bio-based plastics during the first half of 2018. Neste targets to have 20% of its renewable business sales volume from the new applications by 2020.

During the last four years Neste has increased its renewable diesel production capacity from 2.0 to 2.6 million tons/a with minor investments.  Neste's target is to increase its renewables capacity further, and it will continue the debottlenecking of the existing capacity to 3 million tons/a by 2020. The company will finalize the feasibility studies for a new, up to 1 million ton/a production capacity by the end of 2017. These feasibility studies include the selection of the site location as well as an updated feedstock and demand outlook. The project scope includes renewable diesel and jet fuel production as well as pretreatment enabling processing of lower-quality raw materials. Neste aims to make the final investment decision on a new production unit by the end of 2018 with a target to have it operational by 2022. 

Short-term outlook

Neste expects Oil Products' reference refining margin to continue strong into the autumn and to average above the previous year's level in 2017. Global demand for oil products has continued healthy and a number of supply disruptions have recently occurred at refineries on both sides of the Atlantic. The Porvoo refinery is expected to run at a high utilization rate, except for a scheduled four-week decoking maintenance at the Production Line 4 during the fourth quarter. At the Naantali unit a major two-month turnaround and finalization of the new conversion set-up are ongoing.