Good day, thank you for standing by. Welcome to the Q4 2021 Neste Corporation earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised, today's conference is being recorded. Do you require any further assistance, please press star zero. I'd now like to hand the conference over to your first speaker today. That's Mr. Juha-Pekka Kekäläinen, head of IR. Please go ahead.
Thank you, and good afternoon, ladies and gentlemen, and welcome to this conference call to discuss Neste's fourth quarter and full year 2021 results published earlier today. I'm Juha-Pekka Kekäläinen, head of Neste IR. With me on the call are President and CEO Peter Vanacker, CFO Jyrki Mäki-Kala, and the business unit heads, Matti Lehmus of Renewables Platform, Markku Korvenranta of Oil Products, and Panu Kopra of Marketing and Services. We will be referring to the presentation that can be found on our website. Please pay attention to the disclaimer since we will be making forward-looking statements in this call. With these remarks, I would like to hand over to our President and CEO Peter Vanacker to start with the presentation. Peter, please go ahead.
Thank you very much, JP, and a very good afternoon also on my behalf to all of you. It is great to have you all participating in this call. Our company continues to be in great shape, and we are proceeding with high speed, executing our strategy to be a global leader in renewable and circular solutions. I continue to work with the entire executive committee closely together with our board and our around 5,000 very talented and passionate employees to advance our growth projects, move more upstream, drive excellent business performance, and ensure that we meet our sustainability promises and create value for our shareholders. This is also shown in how Neste ended the year 2021. We had an excellent performance in all business units. Our 2021 performance was supported by strong demand for our renewable products and our ability to manage our sales margins.
Our business results were also supported by positive EBIT contributions out of our new Renewable Aviation and Renewable Polymers & Chemicals business units. In addition, our businesses proved to be very resilient amidst the continuous pandemic scheduled maintenance shutdowns, and high utility costs. I must say, our people have again done an excellent job. Let's now move directly to page number four in the presentation. We had an excellent overall performance in 2021 as said. As we are investing in growth, our depreciations are increasing. When we look at the comparable EBITDA, which will become the main profitability indicator going forward, our businesses delivered EUR 1.92 billion in 2021. This is practically at par with the previous year's EUR 1.929 billion and demonstrates how well we have been able to mitigate higher waste and residue costs.
Our full-year comparable EBIT was EUR 1.342 billion. That is a very strong result in a year of major maintenance shutdowns and amidst the significantly higher energy prices. Our renewable products had an excellent performance in 2021, and the fourth quarter was its second best ever. We were able to deliver higher sales volumes at a better margin and as compared to the previous year. Our comparable sales margin averaged $713 per ton in the full year 2021 and was as high as $779 in the fourth quarter. This was a great achievement in a very expensive feedstock market environment. Oil Products was able to exceed the previous year's results despite the major turnarounds at the Porvoo Refinery that was safely implemented in the second quarter and the closure of the Naantali Refinery in March.
These operational events had a significant negative impact on our sales volumes. The reference margin, reflecting the general market conditions, improved clearly towards the end of the year. High utility costs driven by natural gas and electricity prices offset a big part of the margin improvement. Our Marketing and Services segment performed very well in 2021. We were able to increase our sales volumes and unit margins compared to the year before. This was the segment's highest ever result when eliminating the historic contribution from our Russian operations that, as you know, were sold in 2019. Our strategy execution is successfully on track, and I will come back to that later in the presentation. The Board of Directors dividend proposal to the AGM is EUR 0.82 per share.
It is fully in line with our minimum 50% distribution policy, and at 53%, shows growth from the previous year in both absolute and relative terms. Let's move to slide five. Our very good safety performance continued in 2021. Our occupational safety, measured by the total recordable incident frequency, was 1.4 incidents per million hours, almost at a record level of 2020 and among the lowest in our industry. Our process safety event rate improved and also reached 1.4 incidents per million hours. This is a great achievement considering the still ongoing pandemic and the Porvoo and Singapore refinery major turnarounds that were implemented last year. We at Neste continue to be highly committed to continue our focus on health and safety. Our financial position remains very solid.
We reached an after-tax ROACE of 15.5% on a rolling 12-month basis and again exceeding the 15% target despite our high investments. At the end of December, our leverage ratio was low at 0.6%. This solid financial position enables the continuous implementation of our growth strategy going forward. With these opening remarks, I now hand over to Jyrki to discuss the financials in more detail.
Thank you, Peter. 2021 was another different kind of a year and another successful year. The year started relatively slowly due to the COVID-19 impact and also the large Porvoo turnaround. Coming towards the end of the year, the Neste business has truly showed its resilience. If you looked at the second half comparable, it was 50% higher than the first half of 2021. Certainly quarter four, like you have already seen, the strong results were like a bridge over troubled waters and getting towards 2022. Actually, our quarter four comp EBIT was one of the best, and also the comp EBITDA, which we are going to report more in 2022, they were one of the best quarterly results ever. We met the financial targets like Peter already pointed out.
Let's look at the financials in detail. If we first look at the full year figures, if you just look at that, for example, renewable product sales grew 37% with the same 3 million tons as they were in 2020. Very clear the top line was in great shape. Comparable EBITDA will be our main financial KPI as we start to report 2022 figures in April. 2021 was practically at the same level as 2020, EUR 1.9 billion. Our current leading KPI comparable EBIT, EUR 1.3 billion, has a roughly EUR 100 million decrease in RP, and that is basically coming from two items, depreciations and FX impact. Those were EUR 112 million as a total. Oil Products improved roughly 40% during a tough turnaround and COVID year.
Solid total refining margin, but on the other hand, like Markku will explain a little bit later, we had really high utility costs during the second half of last year. Marketing and Services truly continued its strong performance, even though some of the customer segments like aviation and marine are still suffering the COVID-19 impacts. Our IFRS operating profit hit the level of EUR 2 billion, free cash flow EUR 500 million in a year where we had EUR 500 million higher CapEx and M&A compared to 2020. Good management of cash again last year. Year-end, our cash position was very strong at EUR 1.6 billion. Finally, our COP earnings per share, basically 1.64. That is the basis for our dividend proposal.
The dividend is now EUR 0.82 per share, which is slightly higher than our dividend policy. Minimum 50% basically defines. Some highlights concerning the fourth quarter, overall strong and solid financials. For example, the sales, EUR 5 billion revenue in a quarter were the highest ever in current Neste operations. Quarter four comp EBIT, EUR 432 million, and nearly EUR 600 million comp EBITDA showed really the improving trend, like I explained during 2021. These financials also were one of the best in current Neste business setup. Very satisfied with the overall results. If we look then how the figures concerning quarter four, the next page. We have very clearly here that we improved by EUR 52 million, and you see that we have improvement in Oil Products, and we have the small improvement also in Renewable Products.
Positive trend continues in that sense. If we look the same with a little bit with the P&L elements, this shows very clearly how strong the business performance was in 2021 in the last quarter, because the volumes and margins as a total improved EUR 83 million. That is coming from volumes, and that is coming out of the margins. Then we have the FX, mainly USD euro give a boost of roughly EUR 30 million as well. The investment for the future, I'm talking here about the fixed cost.
We had a higher fixed cost in quarter four, and that is very clearly according to our plan for the future, especially in RP, for EUR 32 million higher, but that is really coming from the three base business units and also investing on Singapore future facility that will be up and running next year, meaning getting ready for the future. Some other fixed cost elements also increased by EUR 60 million, mainly relating to strategy implementation, normal IT cost, et cetera, but nothing extraordinary or special in that sense. If we move to the last slide here, the bridge concerning the full year results. We had some EUR 70 million lower EBIT compared to 2020.
If we take out two elements first, the FX impact was negative by EUR 75 million, and our depreciations were higher by EUR 65 million, meaning EUR 140 million are coming from these two elements. Really investing for the future and certainly currency is a different story. If you think about the volume impact, it was negative year-over-year coming out of the turnarounds, both in RP and also in oil products in Porvoo, and of course, closing the Naantali refinery has an impact. Then we have all the elements relating to volumes and sales margin basically balancing each other. That's how the sales turn out to be at the end of the year. Fixed cost as a full year figure, it was EUR 22 million higher, mostly coming out of quarter four, like I mentioned.
The depreciation is another element in the other items where we also have positive development in Oil Products, base oils compared to the previous year. This was kind of the short description how the figures came out at the end of the day. I leave the word now to Matti Lehmus to describe about renewable products.
Thank you, Jyrki. On my behalf, good afternoon to everybody. I have to say I'm very pleased with the results as the fourth quarter was the second-best quarter ever for renewable products with a combination of strong sales volume and excellent sales margin. A couple of highlights. The EBIT was at a level of EUR 357 million, and this is a very good result in a quarter with a catalyst change turnaround in Rotterdam, as you will remember. I also note that the sales margin strengthened by $100 per ton versus the previous quarter and reached $779 per ton, a very good level supported by strong sales performance and hedging. I will come to this a bit more in detail later.
I have to say that this is a very good achievement, as at the same time, the feedstock prices continued increasing. Turning to the sales volume, this remained high at 774 kilotons, which is almost identical to the previous quarter. The high sales volume was supported by continued good demand, a scheduled completion of the Rotterdam turnaround, and also otherwise very good operational performance at the refineries. The continued focus on operational excellence supported the results. Finally, I want to note that the feedstock optimization continues, and the share of waste and residues reached a very high share of 94%, which I'm very pleased with. Having a quick look at the waterfall on the next page, I would like to make a few comments.
The starting point here is that last year, fourth quarter, had a good result level of EUR 338 million, but there were a number of drivers then that brought us to this year's 357. The first one is that the sales volume was 42 kilotons higher, which explains a EUR 30 million positive result contribution. Also, the sales margin improved by $19 per ton versus last year's fourth quarter, which had a EUR 14 million positive impact. The third item on the positive side is the FX changes, which had a positive impact of EUR 22 million because the US dollar actually strengthened from 1.19 last year to 1.14 in the fourth quarter of 2021.
Turning to the items with a negative contribution, the main item was the fixed costs, which increased by EUR 32 million year-on-year. As discussed earlier, this indeed reflects the fact that we have built up resources and capabilities in preparation for the Singapore growth project start up and the expansion of our future business. Briefly turning to the feedstock market. The fourth quarter feedstock markets were again characterized by an increase of the average vegetable oil prices during the quarter. For example, for palm oil, you can see that the quarterly average versus the previous quarter increased by more than 13%. The main reason in this case for palm oil was the continued robust demand, whereas production volumes didn't quite reach the expectations, for example, due to weather and labor bottlenecks.
You can also note from the picture that for rapeseed, for example, the increase in trend was even more pronounced. Analyzing the waste and residues, the market continued to be tight. Prices continued to be on a high level as demand continued to be solid, and this means that on average, the prices increased by close to 10%. At the same time, it's good to note there were some differences regionally and by waste and residue type, and in general, one could say North America was leading the price trend. If you take the example of animal fat, which is here on this chart, you can note how prices increased with some time lag versus palm oil, but then still resulting in an average increase of 7% quarter-on-quarter.
Also, for used cooking oil, we observe a similar trend where the average price increased by close to 10% over the quarter. A quick look on the U.S. market on the next page. You will note that the LCFS credit price averaged $155 per ton in the fourth quarter, which is down 12% from the previous quarter. The key driver here continues to be the supply and demand and its outlook, where the balance is driven on one hand by an increasing carbon intensity reduction target, but on the other hand, the expectation of higher biofuel, renewable electricity supply and renewable gas supply. Also, the RIN prices decreased slightly, especially in the second half of the quarter, and the D4 RINs averaged $1.5 per gallon in the quarter, which is 6% below the previous quarter.
Finally, turning to the sales margin, it was on a very strong level of $779 per ton, which indeed represents a $100 per ton increase versus the previous quarter. I would here like to highlight the main drivers behind it. Firstly, as discussed earlier, the average feedstock market price continued on an increasing trend, and average prices for various feedstocks increased on an average by close to 10%. On the positive side, there were a number of positive drivers that supported the sales margin. Firstly, the sales performance was excellent, including, for example, the optimization of sales premia and also the geographical sales mix. This, together with the commodity market increasing trends, enabled an increase of the average sales price, which explains around 60% of the sales margin increase.
In parallel, also, our hedging strategy continued to have a positive impact as our hedging ratio was high in the fourth quarter, and this mitigated a significant part of the feedstock price increase, explaining around 40% of the sales margin increase. A final driver I would like to mention is that in the fourth quarter, there was a spike in European energy costs, including European natural gas prices, and this naturally had an impact on our variable production costs. This impact was partially mitigated by our utilities hedging, but it still had an increasing impact on our variable costs. In general, very good quarter, supported by good operational performance and good reliability in our supply chain. With these words, I hand over to Markku Korvenranta, who will discuss the Oil Products result. Please, Markku.
Thank you. Thank you, Matti. Good afternoon to everybody. This is my first result conference call that I'm participating, having started the beginning of December. Oil Products had a very strong Q4 2001. We had a comparable EBIT of 90 million EUR, leading to a full-year EBIT of 71 million EUR. You'll see on this first slide on Oil Products that the trend was very positive through 2001, with the highest EBIT in the last quarter. On the last quarter, we had a good average utilization rate of 93%, compared to the previous year, 86%, which has been one of the main drivers of performance.
We had a very strong sales volume on the last quarter as well, contributing to the good result. If we move over to the next slide with showing the work from the fourth quarter of 2020 to fourth quarter of 2021, we'll see that the reference margin contributed positively with EUR 180 million, while the additional margin dragged down the result by EUR 140 million. The largest contribution or negative contribution to the additional margin was the high utility costs, ETS credits, and natural gas and electricity. This was really the trend of 2021, and that same also put into result in the last quarter. We're also seeing that having an impact on the first quarter of this year.
If you move over to the next slide, and have a look at the product margins and overall strength differentials, we'll see that both of these drivers moved positively during the year, having a more normalized results and having a positive impact on the overall performance of last year and the last quarter. I would go into the next slide and still talk a bit more about the additional margin, which clearly developed negatively during the year. We'll see that the reference margin, which was positively developing during the quarters of last year, while at the same time the additional margin was lower. Again, clearly driven by the high utility costs, particularly natural gas, electricity and the ETS credits.
With that, I will hand over to Panu to talk about the Marketing and Services.
Thank you, Markku. Good afternoon. This is Panu Kopra speaking. I'll give you some highlights of last year and Q4 in Marketing and Services. Solid financial performance continued in Marketing and Services in Q4, and during last year we were able to improve our comp EBIT from EUR 68 million to EUR 74 million, which is all-time high result, and like Peter said, eliminating Russian business. Very good performance. Return on net assets more than 36%, which is indeed for retail business, very healthy level. In Q4, both gasoline and diesel volumes increased compared to last year. At the same time, margins were higher than last year, which increased sales margin. On the other hand, fixed costs were higher, but mainly due to non-recurring items. Aviation and marine volumes are both recovering, however, quite slowly. We continue transformation of the station network.
We have now closed almost 110 least profitable stations in Finland, and at the same time have expanded Neste MY availability at station network. Neste MY volumes increased by 20% compared to 2020 due to expanded availability and active marketing. We also started to prepare to do the same in Estonia. Neste MY is available at eight stations in Estonia, and we continue expansion this year. First sales results looks promising also in Estonia, so I'm very happy to see that also our Estonian customers are willing to move to more sustainable way of driving. This was shortly about Q4 and about last year in Marketing and Services. Handing over back to Peter.
Thank you very much, Panu. Let's now move on to the current topics. I mean, first, a few words on the good progress that we made in our strategy execution during the fourth quarter, and of course, I start with Singapore. The Singapore renewables capacity expansion project continues to be on schedule for start up by the end of the first quarter 2023. The local government has taken quite strict actions and successfully managed the COVID-19 situation in the country. We continue to take all precautions and follow the developments in Singapore, of course, very closely. Our Rotterdam Sustainable Aviation Fuel optionality project is proceeding well according to plan. It is expected to deliver 500,000 tons of optionality SAF capacity by the end of 2023. The engineering phase of the possible next world scale renewables facility in Rotterdam continues.
It will have a relatively similar scope as the ongoing Singapore expansion project. We are approaching readiness for a final investment decision during the next months and are making good progress with our environmental permits. The Rotterdam catalyst change was implemented safely and successfully in the fourth quarter. Our continuous focus on the Neste Excellence Program has enabled the increase of our renewables nameplate production capacity again and now from 3.2 million tons-3.3 million tons annually. The capacity target of 4.5 million tons, once the Singapore expansion is online, is for the time being unchanged. This means that we have been able to capture part of the additional capacity potential already ahead of schedule. In the area of innovation, we will open an R&D center in Singapore, and this will increase our R&D and innovation capabilities globally.
It will also drive collaboration with partners and increase our presence and focus in the Asia-Pacific region, which we believe will be very important in the future. I'm also pleased to note that the first series of processing trial runs at industrial scale with liquefied waste plastics has been successfully concluded in Porvoo. So far, this has enabled us to support our customers to produce fully recycled polymers based upon waste plastic and eliminated the amount of waste plastic generated in an average small city in Europe in a year. Our Neste Excellence Program has exceeded our targets, and we have improved our EBIT since the baseline year, 2018, by an impressive EUR 375 million. We will continue to focus on operational excellence during the following years. These were again, some of the highlights I wanted to mention.
We have a clear strategy and continue moving ahead with full focus and speed. As an outlook for the first quarter, we see the following. In Renewable Products, the sales volumes are expected to be on a roughly same similar level as in the previous quarter. The waste and residue markets are anticipated to remain tight. The renewable sales margin is expected to be within the range of $650-$725 per ton. This is something we consider healthy. Utilization rates of our renewable production facilities are forecasted to remain high. Oil Products market demand has recovered year-on-year, but it is still seen to be impacted by the pandemic. The reference margin is expected to remain volatile and lower than in the fourth quarter. The very high natural gas price is expected to keep depressing our additional margin.
Oil Products sales volumes are forecasted to come down somewhat from the high level that we have seen in the fourth quarter, 2021. In Marketing and Services, the sales volumes and unit margins are expected to follow the previous year's seasonality pattern. Some negative impact on demand and sales volumes is still anticipated due to the COVID-19 pandemic. We continue to execute our strategy and make investments in our business. Our cash-out capital expenditure is estimated to be approximately EUR 1.1 billion in 2022, and that is excluding M&A. In Renewable Products, we have scheduled a six-week turnaround at the Singapore refinery in the third quarter and a seven-week turnaround at the refinery in Rotterdam in the fourth quarter.
The negative impact of the Singapore turnaround is currently estimated to be approximately EUR 90 million and the negative impact of the Rotterdam turnaround approximately EUR 100 million on the segment's comparable EBITDA. As we continue to expand the renewables products business, the segment's full year fixed costs are expected to be approximately EUR 140 million higher than in 2021. This includes, among other things, fixed costs of the completed acquisitions as well as our investments in the new business units, as well as in the innovation platforms, as well as for the Singapore new facility. I referred to this already in a previous results call, and we would now like to confirm that comparable EBITDA will replace comparable EBIT as our main profitability indicator since we have seen comparable EBITDA better reflecting our underlying business performance in a period of heavy investments.
This change will be effective from the first quarter 2022. Now this concludes our presentation and now we are happy, of course, to take your questions. Back to you, operator.
Thank you. As a reminder, if you would like to ask a question, please press star and one on your keypad and you can press the Hash key to cancel. That's star one for questions. Our first question today is from the line of Mehdi Ennabati from Bank of America. Please go ahead.
Hi. Good afternoon, all. Thanks for taking my questions. First I would like to congratulate Neste for this extremely strong renewable product margin in such a tough environment. Well done everyone. I will ask two questions, please. The first one on the fixed cost increase that you provided for 2022. From what I understand, this is a combination of new hiring for the Singapore new plant and also from the several acquisitions you've recently made. Regarding those recent acquisitions, you only highlight the negative impact on the fixed costs. What about the synergies? What about the impact also on your margin? Can you tell us more about that? Because so far, you know, we can only see the negative regarding those acquisitions.
What's the purpose as well of those acquisitions, especially in the U.S. if there is no positive impact, you know, on EPS or on free cash flow? Is it only to secure feedstock supply? The second question is about the capital allocation. Your balance sheet is extremely strong. You have a 50% payout dividend policy, which is already quite generous. Clearly you could do more by, for example, implementing a share buyback. I understand that you have the authorization to realize the share buyback. You had this authorization last year as well. Can you confirm this? Just would like to make sure I am not mistaking something there.
Also, what could prevent you today from starting a share buyback now that you have a very strong balance sheet and now that your share price, you know, deteriorated quite significantly during the last 12 months? When I talk about share buyback, it's not buying shares to offer them to the board. It's buying shares, you know, to cancel them. Thank you.
Yeah. Thanks, Mehdi. I mean, very good questions as usual. Let me, I mean, give a first glance on the fixed cost increase and here's what we have alluded to is of course, I mean, fixed cost increase in the renewables area. You rightfully said that we have done quite an impressive number of acquisitions even during the pandemic, which of course add, I mean, to fixed costs. In addition to that, we are of course hiring people in preparation of the Singapore facility. There is of course the business units, Renewable Aviation and Renewable Polymers & Chemicals, that we have set up, and I alluded to that in my presentation already.
At this point in time, we're willing to disclose any concrete numbers, but both of these business units have contributed positively to the bottom line comparable EBIT. It makes absolute sense that we are building up these business units. Of course, we have said that we are also investing in innovation with our innovation business platforms. That is of course an investment in the future. You don't see the immediate benefits out of those investments, but we do believe that we need to develop the future technologies that will then come and help us to continue to grow after 10 years from now. There is also another aspect that I would like to highlight a bit.
We have been extremely sensitive in terms of our fixed cost management during those pandemic years, 2020 and 2021. We have taken different measures in place that of course have kept our fixed costs extremely well under control despite the fact that we were investing already in building up these business units and the innovation platforms in Singapore and acquisitions, et cetera, et cetera. You couldn't really see a big impact of fixed cost increases in 2020 and 2021 simply because of the fact that we actually were reducing a huge amount of costs wherever we could influence to navigate through the pandemic period.
Of course, these things are not sustainable, and they are coming then to the bottom line in 2022, because we need to be ready when we are starting up the largest facility, let's say, in the world for renewable products. You're right, I mean, to say that we have not disclosed any upsides on the acquisitions. Let me maybe allude, I mean, to the fact that we have the highest ever sales margin in 2021. Even if we do not explicitly say how much of that sales margin is actually coming out of our acquisitions, we keep that for the time being very close to us for competitive reasons. It's clear, I mean, that it has also made a contribution to keep our sales margin on and every year increasing our sales margin.
You all know our sales margin was about EUR 350 million-EUR 450 million, $350-$450 per ton around four years ago. Now we have given a guidance for Q1, which is $650-$725. So that is substantially higher, despite, I mean, everything else that is going on. On the balance sheet, of course, everybody talks about share buybacks. At this point in time, this is not at the table for us. Let me be very clear here, because we do see that we have opportunities to continue to grow in the future. We wanna have a healthy balance sheet to continue to invest in the expansion of our business.
Perfect. Thanks very much, Peter.
Thank you. The next question is from the line of Josh Stone from Barclays. Please go ahead.
Thanks, and good afternoon. Also, congratulations on the great results. Also from a personal perspective, quite pleased to see the retirement of your healthy margin terminology in your guidance. Just three questions, please. Firstly, on your fixed costs again, you talked about part of that is related to hiring of new staff. Is this a function of, or how much of this is a function of the talent pool becoming a bit more expensive? Has that had an impact at all? And on that point, as you continue to grow capacity, do you see enough of a talent pool to sort of justify those additions? Or to what extent could the hiring of staff potentially constrain any of your volume growth ambitions over time? Maybe just a few comments on that.
Secondly, if I look at the results, the revenue performance in renewables was particularly strong. I got implied prices up 20% quarter-on-quarter, more than 20%. I noticed the North American market was particularly strong. You've talked about selling previously banked credits in the last quarter. Was that a feature in the fourth quarter again? How do you expect that to go in the first quarter? Lastly, on your margin guidance, are you gonna say what you're assuming for the hedging gains or potential hedging gains in the first quarter? Thank you.
Okay, let me take the first question, Joshua, and then Matti will go on your second question, give you a little bit more background on the revenue on the renewables and also tackling the hedging question. With regards, I mean, to our fixed costs, your first question, talent pool, more expensive. Well, not really what we are experiencing now. And in addition to that, your second question related to that, do we have access to enough talents? Well, due to the fact that we have established our global footprints, our brand reputation has substantially increased as well during the last years. Our positioning is very good, so we have lots of very good people that actually want to join Neste. So from that point of view, I don't see on both these topics any issue. Yeah.
We really have people that want to work, I mean, for us and, I would say not leading to more expensive talent pools, in the company. Now on the second question, Matti, if you can take, the renewable revenue.
Yes. Thank you, Josh, for the question. I fully confirm your observation that the average selling price developed very positively in the fourth quarter. It went up by more than $150 per ton on average. If you analyze a bit what is behind it, I think there are two main drivers, which both roughly represent half of that increase. One is that we were able to increase our sales premia over diesel. This is a very important driver. The second one is that the underlying diesel price also increased. Both of these drivers enabled us to increase our average sales premium. I'm not aware at the moment at least that there are some specific credit sales timing issues or others which would have had a major impact.
Uh, if I then t urn to your question on the hedging gains in the first quarter. It's indeed good to note that in the fourth quarter still we had a very high hedging ratio, more than 60% of total sales. Like you will remember, as we have discussed before, those hedges had been done early. Of course, this had a clear positive impact on the sales margin. We continue to have for the first half of the year, a relatively high hedging ratio. It's 50%-60% for the first half of the year. Of course, important to note that these have been made later. They have been made in conjunction with us closing our term deals.
It of course means that the hedging contribution, it looks like it will be clearly positive, but not as high as in the fourth quarter.
Thank you.
Thank you. The next question is from the line of Nick Konstantakis from BNP Paribas Exane. Please go ahead.
Hi, guys, and thank you for taking my question. Three, if I may, please. You just on the North America realization. So with Josh's question, I just want to touch on Europe, where you also had big increase. Is there any countries in particular which have increased in your mix? I'm just looking at your organic sales, it seems like other Europe has increased. Secondly, I just wanted to talk about the product mix. Just looking at the sales you disclosed, the other product seems to be at all-time high. Is that chemicals, and would the SAF fit into that? Then lastly, if I just may go into the term sales and think about the relation to your guidance.
With the U.S. credits coming off, I imagine U.S. margins are, you know, below the bottom end or towards the bottom end of your range. Where do your term sales sit or any color you could give us on, you know, the relative margins, basically? Thank you.
Thanks a lot, Nick. Matti, do you go with the first question on European?
Yes. Short comments, I mean, as discussed also before, we have done over the last years a lot of work to open a number of markets in Europe. Whether it's in Northern Europe, of course, where you have a high ambition on greenhouse gas reductions or whether it's in Central Europe or Southern Europe, where you also have clearly countries with a high ambition for reducing. It is clearly something we of course continue doing continuously, that we also here optimize the mix. I think the important thing is here that we have that large number of markets open that we can sell into. Again, in Europe, it was a mix of sales to both Northern Europe, but also Central and Southern Europe that we did.
On the product mix, I can perhaps briefly comment. What we are indicating in our report is the renewable diesel and SAF as one category. When you then look at the other category, this is basically, for example, renewable propane, it's renewable naphtha, it's some gases. It's a combination of these other products.
I mean, on this one, Nick, I need to add, I mean, that the renewable middle distillates, so these hydrocarbons that we are producing and selling for the Renewable Polymers and Chemicals business, is also combined still in the same category as renewable diesel and sustainable aviation fuel. You cannot take a conclusion that in the others, this is the Renewable Polymers and Chemicals business. It's like Matti said, it's only then the biopropane which goes into Renewable Polymers and Chemicals, plus then also that renewable naphtha that goes into Renewable Polymers and Chemicals. It's not one to one, please. Yeah.
Got it.
Mm-hmm. You wanted to also.
On the term sales.
Know a bit about the term sales. Yeah.
Short comments on the term sales. I mean, general comment I would have is, again, after a successful round of term negotiations, the share of term sales overall is around 75% of our sales. As you can see from our last years, both Europe and North America are our strategic markets. We do have term sales in both, and strategic customers in both of these regions. I would just say that we continue basically with that idea that we have a mix of term sales and also some spot sales opportunities in both regions.
Yeah. I can maybe add to that, I mean, on the term sales side, that of course, we continue just like we have done during the last couple of years. We've taken these positions with a larger amount of customers that we have in different, of course, geographies. That means in different countries. That provides us much more optionality in how we steer our business. Therefore, we keep on looking at, especially like for example, in Q4, we had lots of spots still open that we were able to place in the market. Of course, we placed it there where we had very healthy demand in the European market, so where we could get the best benefits and therefore also higher sales premiums.
The situation, I mean, for next year, for this year and 2022, sorry, continues to be like, Matti said, I mean, that we have that variability, that we can actually then also continue to steer as we have more optionality. Of course, I mean, the aviation business and the polymers and chemicals business continue to grow. We're very pleased, I mean, with the development last year on both business units, and therefore also that adds, I mean, in terms of optionality, as the volumes grow.
Thank you. The next question is from the line of Artem Beletski from SEB. Please go ahead.
Yes, hi, and thank you for taking my questions. I actually have two to be asked. First of all, when it comes to the way how you guide renewables margin for Q4-Q1, basically you have narrowed the range and also upped it somewhat. Could you provide some color on what is basically driving it? Is it basically, sort of, say, resilient progress that you have delivered last year, term deals, optionality? What are sort of key drivers behind upgraded and narrowed guidance? Maybe the second one is going to Jyrki relating to tax rate. It has been basically below 10% the past couple of years. What is the rate we should be assuming going forward? Thank you.
Yeah, on the first question, Artem, a good question. Of course, I mean, we have continued to gain, I mean, confidence. If you just look at the variability that we had on our sales margins, and that in combination with the optionality that we have built up, it was not a huge fluctuation, let's say, in our sales margin if you go back, I mean, the last six quarters. That led to the fact that we said, "Okay, let's be more explicit on our sales margins, not be qualitative, but clearly give you an indication what is the range." We intend to do that also moving forward so that we are actually talking about ranges of about $75 per ton.
Yes, about the taxes, you are absolutely right, Artem. It was 9% last year, our effective tax rate. You know that this is coming from the lower taxation in Baltic countries and Singapore and Switzerland. For modeling purposes, overall what we have seen is that our normal tax rate, it's basically varying between 12%-14%. I would use those kind of things for thinking about where it would land also 2022.
Okay, great. Thank you.
Thank you. The next question is from the line of Erwan Kerouredan from RBC. Please go ahead.
Hi. Thanks for taking my questions and well done on the strong set of results this morning. Two questions, please. First one on the sales margin of renewable products and then second one on the new growth areas. Can you elaborate more on the bear case justifying a low of $650 per ton in your guidance range for the first quarter, given how you landed your margins very comfortably in the very high part of the range and ultimately closer to $700-$750 throughout the past four quarters? Second question on the new growth areas. You confirmed the very constructive developments in SAF and Renewable Polymers & Chemicals over the past year.
Can we expect any specific separate earnings disclosure on renewable chemicals and polymer before 2023? These are my two questions. Thank you.
Thanks a lot, Erwan, for your questions. On the sales margin, the way how we are looking at it, I mean, almost in the middle of the quarter now, yes, we said $650-$725, but our confidence level is not at the bare low level of $650, but it's rather, let's say, around, let's say the $700 level. Yeah. Of course, the quarter is not over yet, yeah? Don't take me, let's say, on that exact. That's why we give a range, but it gives you a little bit of more feeling in where potentially we could end up.
On the reporting, we think that it is better that in 2022 and definitely in 2023, as we are ramping up the aviation and the polymers and chemicals business, that we keep our reporting on the renewable product level, and we do not yet split it up. That's our current thinking that we have, and then we'll need to see, I mean, once we have ramped up the Singapore facility, how we will deal with that, then, in 2024. That's the current thinking.
Thank you.
Thank you. The next question is from the line of Sasikanth Chilukuru from Morgan Stanley. Please go ahead.
Hi, thanks for taking my questions. I had three, please. The first was regarding the fixed costs and the increase by EUR 140 million year-on-year. Just wondering what are the expectations of the level of fixed costs after the Singapore expansion project and the Rotterdam SAF optionality project come online in 2023? Is this increase, the year-on-year increase, indicative of future year-on-year increases as well? The second question was regarding the FID of the possible Rotterdam expansion project. If you could provide some color on what is required from here on actually to take FID, what is holding back the FID of that project?
Is there any risk of higher CapEx required now for the project than what was previously expected due to the current inflationary environment? In general, how is the current high inflation rates actually affecting the profitability of future projects, if you can talk about that? The last one was related to the renewable product sales volumes, because if you can remind us what your expectations are for the overall sales volumes for 2022 in the renewable products segment.
Thanks, Sasikanth. On the fixed costs, even if we don't give, of course, a guidance over multiple years, but what I can tell you is that in the EUR 140 million additional cost, of course, as I said, we have the business unit build up. We have Singapore, Rotterdam optionality. So this is. I think it would be the wrong thing to say that now every year we're gonna have a fixed cost increase of EUR 140 million, that would probably not be the right thing, I mean, to do either. So let's now look at that EUR 140 million in RP, I mean, for the year 2022, and then in the following years, we will of course give you guidance on what does that mean.
It will not be every year, I mean, such a big number, I don't believe that. On the FID in Rotterdam. Well, there is nothing special actually, yeah, or delaying, we are proceeding, yeah, with the engineering work. As you know, just like for the Singapore facility, the moment we take an FID, we started filing, let's say, a couple of days later. That has always been our philosophy in the company, so we wanna make sure that all the engineering is done in the appropriate fashion. When the FID is, the decision is being taken by our board, that we then immediately can start with the execution.
We have alluded to that, I mean, already a couple of times that the scope is, let's say, generally speaking similar to the Singapore scope, but of course, there are a couple of very nice tweaks that we are doing. That of course also plays a role in the engineering that we wanna make sure that those tweaks of course also function very well and of course they are fitting then to the European environment. On the RP sales volumes, Matti, if you can answer that question.
Yeah. I think in general, if you look at it from the perspective of what is the production outlook, we gave also an update on the turnarounds that we are planning to have this year. It's mainly the third and the fourth quarter where we have the big units in Singapore and Rotterdam with the major turnarounds. There is a small minor turnaround in one of the smaller units in Porvoo in the second quarter. If I look at it overall, I would expect the production volume to land very similar to what we had in 2021. That of course then also means from the sales volume, we would expect to be in a similar range.
Great. Thank you very much.
Thank you. The next question is from the line of Peter Low from Redburn. Please go ahead.
Oh, yeah. Hi. Thanks for taking my questions. The first one was just a quick clarification on the maintenance schedule and renewables. So you would turn around with Rotterdam and Singapore this year, that you had to turn around last year in Singapore and the catalyst change at Rotterdam. Should we assume going forward that there's an annual maintenance shutdown required at each plant? Is that a sensible modeling assumption? And then just a quick question on the California market. You mentioned in your remarks that the LCFS credit price has not really recovered, despite the increase in the annual required CI reduction. Can you just share any thoughts on that and perhaps how you see supply demand evolving in California, what that could mean in terms of the trajectory for LCFS prices from here? Thanks.
Yes, thank you. I'll first comment on the question on the maintenance. Perhaps good to remind there is two types of turnarounds. One that is more frequent is what we call a catalyst change turnaround. And that is something that we of course optimize the length. It's also a choice of what the optimum is. But these have occurred, let's say something like every fourth, fifth quarter, typically, for the sites. Then on top of that, you have, of course, these more major turnarounds, which are a bit longer also, where we typically have regulatory inspections. They may be more extensive maintenance work. There is not a firm timeline for them, but we do it based on a risk-based assessment and based on the regulatory needs, but they are less frequent.
In this case, for example, if I mention this year, one of the reasons we have a longer turnaround, for example, in Rotterdam, is that we also need to prepare for the integration of the sustainable aviation fuel optionality project. These can also be things which affect then the turnaround length, at least when it comes. A couple of comments on the LCFS. Like I said in my opening, it's indeed, of course, if you look at this fundamental supply and demand balance, there is always several aspects to look at it. If at the moment you look at it, yes, we have on one hand the positive demand increase coming from the fact that the carbon intensity target is increasing. It goes up from 8.25% last year to 10% in 2022.
That increases the demand for credits. On the other hand, it's always a function also of what the actual underlying fuel demand is. If you look at 2021 in general, we are still of course seeing that we are recovering from the pandemic. That is another fact which then will impact how many credits are needed. Then of course, the other part of the equation is always the supply of the credits. Here we have of course growing renewable diesel supply. It's good to note that also during 2021 we have seen, for example, renewable electricity, also biomethane, some growth. It's really the balance of these two that makes the difference.
What we are watching very closely here of course is indeed how quickly the fuel demand recovers now, and at the same time continue monitoring how the supply growth of credits will actually in real life then pan out next during the year.
Thank you.
Thank you. The next question is from the line of Matthew Blair from Tudor, Pickering, Holt. Please go ahead.
Hey, good afternoon. Thanks for taking my questions. I'd like to stay on this California LCFS market with two follow-ups, please. The first is, could you talk about how connected are your markets here? So if you have California LCFS prices falling, does that affect your net backs in Europe or in Canada? The second question is, you know, given that prices have come off to the $140 range from $200 earlier in 2021, do you expect like any sort of a reset from CARB or the California legislature to toughen these standards and to push prices, you know, back up into that $200 a ton range? Thank you.
Matti.
Yes, thanks for the question. In general I mean, if comparing to the question how connected the markets are, perhaps there is no direct connection between, let's say, European specific market or the Californian market. This is then obviously more a question of looking at global supply, demand, et cetera, but I don't see a direct connection between the markets. The other question is an interesting one. It's on the question what kind of processes exist to review the ambition. Perhaps there it's good to note that there is actually a process called the, let's say, periodic review that the Californian authorities have called the Scoping Plan, where they can periodically review the ambition for the future years.
This is, of course, something that if the supply of credit is growing, then that can be taken into account, when the ambition for the future years is also set.
Great. Thank you.
Thank you. The next question is from the line of Matt Lofting from JP Morgan. Please go ahead.
Hi, Gents. Thanks for taking the questions, two please. First, just coming back to waste and residue feedstock markets and the sort of the tightness that you've reiterated on an ongoing basis. I guess there's different sort of factors at play within that in terms of, on the one hand, potentially higher demand or competition from other producers as supply ramps up. On the other hand, supply chain tightness perhaps playing a role as well. I wondered if you could disaggregate a bit the nature of the sort of the tightness that you're seeing and the extent to which one or the other is outweighing.
Secondly, if I heard correctly, you sort of talked earlier about higher variable costs or higher energy costs within renewables being largely mitigated during the fourth quarter by hedging. Can you confirm whether those hedges remain in place for 2022 and when and if you get to a point where you're gonna be more directly exposed to market prices on gas and energy?
Yes, thanks for both questions. I'll start with the waste and residue markets. I mean, first of all, I'll just state that there is of course a link between the different markets like vegetable oils, like waste and residues. One factor always is to see what is happening in the different markets. If you look at, for example, just the recent history, then we have had increases in vegetable oil markets, whether it's palm oil, whether it's soybean oil, and this is of course one of the drivers which over time tends to have some impact. When then moving more to the waste and residue markets, then it's of course about supply and demand, and perhaps worth noting there is always also some regional differences.
If you, for example, view at the recent history, you can see some differences that in North America, waste and residue markets have been increasing more quickly, whereas in, for example, Europe, the markets have been a bit more stable. You will always see these kind of regional also differences, which are of course then reflecting local supply and demand balances. On the variable cost, perhaps just stating, yes, I did mention that, clearly what we saw in the fourth quarter is that natural gas prices in Europe have gone up, and this also affects our variable cost. Yes, we do have some hedging programs in place, so they do a little bit partially mitigate that impact.
I also wanna be clear, we still did see a clear increase of the variable cost. That continues to be the situation also in 2022, that while we have some hedges in place, there continues, of course, to be an exposure to what happens in the natural gas markets.
Great. Thanks, Matti.
Thank you. The next question is from the line of Henri Patricot from UBS. Please go ahead.
Yes, everyone. Thank you for the presentation and the update. I have two questions, please. The first one, given we're a year away from the startup of the Singapore expansion, I was wondering if you can give us a sense whether we should expect, you know, some sort of a change in the feedstock mix in the near term when the plant starts up and change in terms of the split between North America and Europe. Or, like in the case of feedstock, you're actually doing all the work to be able to source enough waste and residue there, so that there isn't that much of a change in the feedstock mix. And secondly, I wanted to follow up on the questions around variable cost.
Can you give us a, you know, sense of the negative impact that you're seeing from that? I think in RP you briefly, you know, talked about $110 per ton for the variable cost.
sense of, you know, how much the increase has been in the last quarter compared to that baseline, and how much of a headwind, let's say, you're seeing in all products in the first quarter in 2022 versus Q4. Thank you.
Matti, if you can take.
Yes. The first question, thank you, was on the Singapore expansion and the impact on the feedstock mix. Here, what I would continue, I more look at it as something where we of course continuously try to optimize our feedstock mix. As you know, we are focusing in our strategy on waste and residues with a low carbon intensity. This is something of course still then to happen during the year that we prepare for the start up, but I don't automatically see that there is a automatic change in our feedstock mix. This will then be subject to the optimization also at the time.
Regarding the variable cost, as I can comment for the renewables, I mean, just to give you a flavor, if I compare the third quarter and then the fourth quarter where we had that price spike for natural gas, it did have an impact on our variable cost. If you put that into the perspective of our sales margin, for example, I think the impact is, let's say, a single-digit %, just to give you a flavor. It's there, but it's, let's say, in the 0%-10% range of the sales margin.
Okay. Thank you. On the OpEx side.
Markku
What impact are you seeing in Q1?
Yeah. Thank you for the question. The fourth quarter was, as I mentioned, very strong on volume. We were partially shielded from the high utility cost by hedges, similarly as Matti explained for renewables. In Q1, we'll see still good demand, but lower than in the fourth quarter. The reference margin we expect to continue to be volatile, but somewhat lower than the fourth quarter, and we'll see a fairly significant impact coming through, particularly from natural gas impacting the Q1.
Okay, thank you.
Thank you. The next question is from the line of Henry Tarr from Berenberg. Please go ahead.
It might be me. It's Henry Tarr from Berenberg. I hope you're well. I had a couple of questions. So firstly, on the Singapore facility, to come back to that one, will you be looking for term sales? And when will you start negotiating those? Is this kind of gonna be in Q3, Q4 of this year? And then I would guess the bulk of those products from the new Singapore facility as they ramp up are likely to go into the U.S. Again, is that kind of the initial plan? And then on the feedstock side, with the acquisitions that you've made, Mahoney Environmental, et cetera, I guess you're gathering feedstock in the U.S.
What are you currently doing with that? Are you shipping it to your facilities in Europe or elsewhere, or are you sort of selling it in the U.S. as a hedge, if you like, against feedstock costs? Just lastly, how do you see the growth of renewable diesel capacity globally this year? Thanks.
Thanks, Henry. With regards, I mean, to the Singapore new facility, we need to split it up a little bit in different parts. I mean, the first part is on the renewable road transportation, so renewable diesel. Here we follow the same pattern like we do every year, so that means that at the end of the year, we will go again into the term sale negotiations with our strategic customers on a global basis. In renewable aviation, so the SAF, the dynamics are a bit different in that market in such that, we have and may expand also, the relationship with strategic customers, and therefore, in terms of volume commitments, we have sales agreements which go beyond one year. This is ongoing already now that we have such negotiations ongoing.
This is a bit similar in the polymers and chemicals that you don't go, let's say, from one year to the other year, but you have then also global customers, multiple locations, and therefore also, we're talking about sales agreements that eventually are going over multiple years. Again, these are the partnership agreements. That means that they are more volume-oriented and not fixed price, I mean, oriented. On your feedstock U.S., I think the situation is very clear on that. I mean, whatever we are collecting, aggregating, certifying, and so on, we are using in our own facilities. With your third question, Matti?
Perhaps adding to that one, of course, we also have the possibility, and we do also sell to third parties. It's a combination, but optimization we do continuously as well. On the third question on the renewable diesel capacity estimates this year, so, as commented, I think, also earlier, we do see that there is of course going to be supply growth. It will depend on the exact timeline of when new capacity is being ramped up. We do estimate it to be somewhere in the 2.5 million ton range in terms of supply growth, and unless of course there are then delays.
Perhaps just commenting similarly on the demand side, we continue to see also their demand growth to grow somewhere over 2 million tons, as both Europe and North America are expected to continue growing their demand.
Yeah, I wanna add to that, I mean, that, we saw in 2021 a bit more than 1 million tons is our estimate in growth in terms of demand on a global basis. When Matti was referring, I mean, to approximately demand growth of, let's say 2 million tons, one may look at it, I mean, that this is approximately 50-50 between the European region and the North American region. We have, as you know, a very strong position in the European region to capture that.
Great. Thanks.
Thank you. The next question is from the line of Raphaël Dubois from Societe Generale . Please go ahead.
Hello. Good afternoon. Thank you for taking my questions. Congratulations on the results. Three, please. The first one is on the tax guidance you gave earlier for 2022, unless I'm mistaken. Would you be able to give us a range of what to expect once the tax exemption agreement falls in Singapore? That will be my first question. On SAF, I understand you don't want to disclose too much at the moment in terms of volumes, but could you at least confirm that margins for this particular activity should be at least $100, if not $200 per ton higher than renewable diesel for transport? Finally, you gave earlier the impact of sales optimization and aging for the increase in sales margin Q on Q.
Could you please do the same for a year-over-year difference, please?
Okay, Raphaël, thank you for your questions. Jyrki can comment on the tax guidance, and I will take your second question on SAF. That gives Matti a little bit of time to look at your third question on the sales margin split up year on year.
Yeah. Talking about the tax first, like I mentioned, our normal kind of tax rate level is between 12%-14%. Certainly when Singapore tax exemption is out 2023, the figure will be higher. I'm not going to open it at this point of time. We will basically talk about that next year when we talk about also 2023 and all the other elements, what is basically affecting then the global taxation. It will certainly go up, that's for sure, from the figure 14% as a guidance what I can give at this point.
On the question on the SAF volumes, we have very good demand in the markets. You know that we have positioned ourselves in such a way that we are supplying to customers in North America, in Europe, as well as we're already in Asia Pacific. We have already entered, I mean, into plane service that we can provide in different very important hubs, airports. We continue to look at expanding that. The available volumes next this year is 100 KT. We're quite confident that we will be able to place those volumes at good margins. Of course, the margins are still impacted based upon our current setup that we have, which is not the ideal economics.
The ideal economics only start when we have the Singapore facility fully up and running. Therefore, I would not speculate upon higher margins than renewable diesel. We've always said that, we do not want to sell sustainable aviation fuel, and with that dilutes the margins that we can achieve with renewable diesel. We stay with that. That may not be dilutive. Once we have Singapore up and running, we will see, I mean, where are we standing and how good the margins then are. Matti, if you can take the third question from Raphael.
Yes, please. Actually, like you have probably noted, what we have tried to do every quarter is to give you a flavor if there have been sales margin movements, what the different drivers are, and also when possible to quantify them. I unfortunately don't have the exact, let's say, quantification of the drivers for the full year. If I look at it, you can see that what has been in a way a recurring pattern, that the feedstock cost over the year has been on an increasing trend. This has had always, in a way, negative impact on the margin. Then indeed, it has been these two drivers.
It's been the sales performance, which has been driving a positive contribution through the optimization, and also the hedging has been a recurring one, of course, as we have had hedges in place throughout the year. Unfortunately, I don't have that exact percentage, but, of course, the hedging impact has grown throughout the year, as the feedstock prices have been continuously increasing. Probably the weight of that one has grown throughout the year.
Great. Thank you.
Thank you. The next question is from the line of Iiris Theman from Carnegie. Please go ahead.
Hi. Thank you for taking my questions. I have two, please. First, in terms of waste feedstock base, I think you have highlighted around 40 million tons of feedstock base in the long term. What about in the next, let's say two-three years when the supply is likely to be globally some 20 million tons or more, perhaps more? What is the expected feedstock base? Secondly, you've been testing renewable kerosene line in Sweden. I was just wondering what is the current situation there, and how far are we from commercialization? Thanks.
Yeah, on the feedstock side, Matti, if you can give your
Yeah, short comment here. Indeed, we have taken our 2030 estimate that the waste and residue availability would grow to 40 million tons. It is somewhat larger than what the supply of waste and residues is currently, because we do expect aggregation to develop in emerging countries. In a way, through the geographic growth and better aggregation, that pool to grow. I don't have an exact number at the moment for the current size. I would say it's in that 30 million-40 million ton range already now, but it will continue growing over the years.
The key question there, Iris, as you know, is always, I mean, who has the access? We may see that 30 million tons, but that doesn't necessarily mean that everybody is seeing 30 million tons in accessibility. One more reason for us-
Yeah.
I mean, to continue to expand the accessibility. On the renewable gasoline, that continues to be a pilot. Do not please expect that we are now suddenly gonna invest, I mean, huge amount of monies and starting to produce renewable gasoline. This is a pilot. Our full focus is on road transportation with renewable diesel and of course also on SAF for aviation and renewable hydrocarbons for polymers and chemicals. That is our core strategy.
Okay, thank you.
Yeah.
Thank you. There are no other questions at the moment. As a reminder, it's star and one on your keypad if there are any further questions. No other questions coming through, so I'll hand back to the speakers.
Yeah, thank you very much. Thanks of course for the very good questions as usual and your very active participation. Of course we are always very pleased, I mean, to hear from you, lots of congratulations on the excellent performance of our teams in Q4. That gives us of course also the confidence that we can continue to invest and expand in our business. I'm also very, very pleased, I mean, with these accomplishments of last year. It was a challenging year, but if you look at the final results, then it shows really, I mean, how stable we are now set up internationally. That of course has been made possible by the hard work of all our Neste personnel.
Remember, I mean, today we have more than 70% of our people working for renewable and circular solutions. That is a big transition compared, I mean, to the last three and a half years, where we had about 70% of our employees working for the heritage oil-based business. We will continue to deal with the challenges and with the opportunities on our journey to become a global leader in renewable and circular solutions. I've also said multiple times our strategy remains unchanged. It has all the supports from the board as well as from the management at Neste. I am personally, of course, also fully committed to keep pushing hard, as you know, until the end of my remaining term as Neste's President and CEO. Again, thank you all and stay safe and, above all, healthy.
Thanks a lot.
Thank you. That does conclude the conference for today. Thank you for participating and you may now disconnect.