LONDON : Neste’s (NESTE.HE) green star is dimming. The 26 billion euro Finnish energy major, the world’s biggest biofuel maker by capacity, reported on Thursday a 24% fall in half-year revenue while also announcing delays to its ambitious plan to ramp up production of sustainable fuels in Singapore. That rattled investors’ confidence, triggering a 15% drop in its stock.
Neste’s production woes are a big headache for Chief Executive Matti Lehmus but also for the aviation sector. The 1.6 billion euro construction of the Singapore Expansion Project – which started at the beginning of 2019 – was expected to add 2.6 million tons of fuel capacity per annum. That includes up to 1 million tons of sustainable aviation fuel (SAF), which is key to make planes greener as it cuts carbon emissions by up to 80%. But the rollout of the facility has suffered delays due to equipment repairs and maintenance shutdowns. Neste is now predicting that it will produce 230,000 tons less of renewable diesel and sustainable aviation fuel in the second half of 2023. That’s bad news for the fight against climate change. The industry has made little progress in reducing polluting emissions from jets and planes. Neste’s production problems will further complicate the aviation race to net zero.