Company makes third cut to renewables business outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel costs

(Adds expert, background, information 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 company for the third time this year due to falling costs and likewise lowered its anticipated sales volumes, sending the company's share rate down 10%.

Neste said a drop in the price of routine diesel had actually 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 produced a supply excess of low-emissions biofuels, hammering earnings margins for refiners and threatening to hamper the nascent industry.

Neste in a statement slashed the expected typical similar sales margin of its renewables system to 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 also expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had actually predicted since 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 anticipated to sell in between 350,000-550,000 tonnes this year, below in between 500,000 and 700,000 tonnes seen previously, Neste said.

"Renewable products' sales prices have actually been negatively impacted by a substantial decline in (the) diesel price during the 3rd quarter," Neste said in a declaration.

"At the same time, waste and residue feedstock rates have not decreased and sustainable product market value premiums have actually remained weak," the company included.

Industry executives and analysts have said quickly expanding Chinese biodiesel producers are seeking brand-new outlets in Asia for their exports, while Shell and BP have actually revealed they are stopping briefly growth strategies in Europe.

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

Neste's share price 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)