Domestic UCO supply in the US is insufficient to meet the growing demand for RD and SAF, and Neste/Martinez has been actively enhancing their domestic feedstock sourcing capabilities. Despite potential policy shifts favoring domestic feedstocks, imported UCO-based fuels may continue to be economically viable due to lower production costs (Neste Singapore) and eligibility for RINs. The evolving regulatory landscape will require ongoing strategic adjustments by industry players to maintain competitiveness. (ChatGPT)
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I was thinking the same thing myself. The less the model portfolio follows, the better.
Those blending obligations are just growing, so I wonder about Inderesâs âpanic sellingâ.
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It is a buy signal.
The war ends on Thursday and the world will start to cheer up and oil will return!!
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Well then. Inderesâ analyses could not be criticized (my previous message was deleted). In my opinion, I didnât offend anyone. I only brought up the poor performance of the model portfolio. I believe that in any case, Neste will still rise, and the change in the model portfolio is a buy signal 
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Because I lost too much (so no sense in selling), I have already âforgottenâ Nesteâs shares and thought about looking at them again only after 5-10 years. My child might be happy with them. However, I believe in the company, but a short-term miracle is unlikely to happen.
It must be remembered that Inderes is not a person or a charity, but a company that sells its own product and expertise, and Nesteâs share is then a burden and an unfortunate misjudgment, especially in the eyes of someone who is just now getting acquainted with the pages, perhaps unaware of Nesteâs story as a âsure thingâ as a stock for everyone (which I donât usually go for myself, but with the new thinking on renewables, they managed to mislead me into it 
) Inderes must therefore act in the present moment and constantly prove its own expertise. It should also be noted that when it moved away from so-called freelance operations, it has clearly also changed.
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Someone here probably knows how fast/efficient it is to switch a refinery to produce SAF>HVO or vice versa? If demand for HVO now increases, how easy would it be to increase its production if a lot of SAF is currently produced and HVO production is lower?
For example, if Sweden now needs significantly more renewable diesel as the blending mandate increases, could Neste react quickly to this and shift its refineries more towards HVO?
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Itâs a good question but a tough one. For instance, Singapore was built from 2007 to 2010, then expanded from 2019 to 2023. The same story with Rotterdam: 2-3 years for the first phase, and now the expansion with similar length like Singapore. It took 2-3 years to transform Martinez refinery. But when Neste speaks about Porvoo full transformation, I understand they were speaking about the decade (mid-2030s) to full transformation⊠until this capex was stopped or postponed by the new CEO. When I read about different SAF start-ups, they speak about 1-3 years, but I guess there is a different length to build smaller or larger refineryâŠ
In 2025Q1, Neste produced 1.08mt of RD/SAF at 79% utilisation rate. So, I simply calculate that the current Nesteâs potential at 100% utilisation rate is 1.37mt per quarter or 5.5mt per year⊠Thatâs exactly what Neste says in their reports: their current capacity is 5.5mt per year, with an aim to increase it to 6.8mt in 2027 with an expansion in Rotterdam⊠So, the Swedes may freely increase their mandates: Neste will fullfill their needs in full. 
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In regards to switching from SAF to HVO this is what chatgpt says, although not sure whatâs the primary source:
"Neste has built flexibility into its Singapore and Rotterdam refineries:
- They can shift some of their HVO capacity to SAF, but large-scale SAF production required additional investment (e.g., the Singapore expansion project that enabled up to 1 million tons/year SAF took ~4 years to complete)."
From Nesteâs CEO and CFO comments I understood that switching between HVO and SAF is not that difficult. The challenge is that SAF production is more time consuming due to more difficult feedstock pre-trearment⊠At least, this is what comes from my memory nowâŠ
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As far as I understand that process, itâs easier to succeed from SAF without major changes. I could imagine weâre talking about less than a day. The other way around is impossible to say.
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The committee approved this proposed 45Z support change a couple of hours ago. Linking the proposal to the budget bill makes its approval in a later congressional vote reasonably likely. It seems that BTC support is truly dead and buried, and 45Z, i.e., PTC support, is the only future for biofuels in the United States. This support will be the only IRA support enacted by the Biden administration that appears to survive and continue into the Trump era, which probably also speaks to the influence and importance of farmer lobbyists to Republicans.
The continuation of the support into the 2030s brings much-needed security and stability to biofuel producers. Removing indirect land-use change (ILUC) values from the carbon emission calculation formula is a direct concession to farmers, bringing the production support for virgin vegetable oils closer to the value of waste fats, see image:
Of course, I read a rumor that the Senate is still working on its own version of the bill, where only standard subsidies would be set for biofuels produced from different raw materials, and complex carbon accounting would be abandoned. This would at least be a much simpler model and perhaps more sensible, if carbon emissions can otherwise just be whatever politicians decide them to be by changing the calculation formula.
The removal of tax credit transferability starting next year would be a clear weakening, complicating the operations of at least smaller producers. In the future, one would need to be able to make a profit and thus pay corporate tax to benefit from the tax advantage. This seems to be quite difficult for many producers for now â including the joint venture between Neste and Marathon.
Limiting support only to North American raw materials is interesting. This doesnât actually favor local biofuel producers, as most of the support value flows directly into raw material prices. But for Neste, it might be net beneficial, as it could make it more difficult for competitors and hinder transatlantic SAF trade, where, for example, animal fat imported from Brazil and refined into SAF in the United States would be brought to the European mandate market for sale.
The entire legislative package is expected to be voted on in Congress before Memorial Day on May 26th. We are also still awaiting a much more important proposal for Neste regarding the increase in US distribution obligations. The agency director stated recently (May 6th) that it would be coming within two weeks. Therefore, it will likely become clear in the near future what kind of developments will be seen in the US renewable fuels market.
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Oil price falling. What impact on Nesteâs earnings?
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Revenue will decrease and inventory losses will occur in the short term. In the long run, it has no significance. This is on the fossil fuel side. I canât say about renewables.
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It seems that renewables follow fossil fuel prices quite well, meaning if oil prices drop, then the price of HVO diesel also drops, because otherwise the difference would be so large that consumers wouldnât find it reasonable to buy overly expensive renewables. At least in Uusimaa, the price difference between regular diesel and NesteMY diesel is usually about 30 cents per liter, regardless of the price, and if raw material prices donât fall at the same rate as oil prices, then problems are ahead.
As for SAF, I donât know what low oil prices do, whether itâs positive or not.
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Nesteâs consensus estimates have been updated after the earnings report:
If the estimates were to materialize, then after an interim year, the 2026 P/E would be just over 10, and with the 2027 earnings, the P/E at the current price would be clearly below 10.
Renewable production volumes are clearly growing in the forecasts, but margins remain quite low.
As an interesting detail, it can be noted that Inderes has the only analyst issuing a negative recommendation.
Thereâs an interesting dynamic going on here, Inderes vs. the world.
All other analysts are positive or neutral - Inderes recommends reducing.
Private investors are buying Neste, and the number of shareholders is only growing - Inderes sold Neste from its model portfolio (at the bottom?!).
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Here is a more detailed TP summary.
source: Vara Research
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Neste and FedEx, the worldâs largest express freight company, have agreed on the delivery of approximately 8,800 tons of Neste MY Sustainable Aviation Fuelâą (SAF) blend to FedEx at Los Angeles International Airport (LAX). This is the largest purchase of sustainable aviation fuel by a U.S. cargo airline operating at that airport to date. The purchased fuel blend accounts for approximately one-fifth of FedExâs annual jet fuel consumption at Los Angeles International Airport.
This fuel purchase marks FedExâs first significant adoption of sustainable aviation fuel in the United States, building on the companyâs years of efforts to develop innovative and more sustainable aviation technologies in collaboration with other industry leaders. Under the agreement, FedEx has purchased a fuel blend from Neste that contains at least 30% neat Neste MY Sustainable Aviation Fuel. Fuel deliveries began in May 2025 and will continue for one year.
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Quantitatively, that is an insignificant agreement; 8,800 tons corresponds to approximately 0.6% of Nesteâs 1.5 million ton annual SAF production capacity.
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However, itâs a good customer relationship and a continuation of the 23,000-ton deliveries announced last December to Air New Zealand for Los Angeles and San Francisco airports. If one looks at announced SAF deals generally, the quantities are usually small or not announced at all. Itâs positive that Nesteâs announcements usually include quantities. Thus, itâs not purely marketing.
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As long as itâs not clear what indicator Neste uses in SAF sales (if any), one can only guess the price at which SAF has been sold. The more transparent Neste was about this, the better investors could follow the situation. For example, Neste could very well present raw material prices and SAF prices on its website, so that one would get at least some idea of what Neste pays and receives for the products.
Well, at the latest, surprises always come in Q-reports (usually downwards) when products either sell well or not.
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Sure⊠Competitors desperately want to see this info too⊠
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