Hello, all. Welcome to Neste's Q3 2024 Results Webcast. My name is Anssi Tammilehto. I'm the head of IR at Neste. Today, we have our new President and CEO, Heikki Malinen, and our CFO, Martti Ala-Härkönen, as our main speakers. As per usual, we will first start with our presentation, and after that, we will have time for your questions. As always, please pay attention to the disclaimer, as we will be making forward-looking statements in this call. With these remarks, I would like to hand over to our President and CEO, Heikki Malinen.
Good morning! Good morning, good afternoon, good evening, wherever you are. Welcome also, on my behalf, to this webcast, and thank you, Anssi, for those introductory remarks. Okay, so, this is my first Neste webcast, and, some of you may know me from the past, but please allow me to introduce myself briefly with a few words here to get us going. So, this is my sixteenth year as a CEO. I've spent almost most of my career in cyclical industries, heavy industry, industries which face tough, fierce competition. I've spent my whole career involved in different types of transformations. I've led many transformations. That's what I know, and that's what I do professionally.
And I look forward to discussing with you about Neste, how we're doing, and also where we're going from here, in the years to come, and hopefully also meeting you in person, in the not-too-distant future. This is my eighth day at Neste. I'm on an accelerated learning journey, and I will be focusing very much now in the early days, more on listening and learning and understanding, but at the same time, getting very quickly ready to move then into execution mode and really with a very strong intent to make progress here within Neste. So those were sort of my opening remarks. And then we... If we start getting down to the order of the business of today, so a couple of key messages here for starters.
So just as backdrop, I've already had a chance to talk to many Neste employees here in Porvoo facility. I visited the R&D center on my first day. I've seen the Porvoo refinery. I've met, you know, hundreds of people. Also, had a chance to visit our foreign locations in Singapore and Houston and Rotterdam. So, and I've also spoken with a number of our customers. I talked to three CEOs of our largest customers last week and asked for their feedback and perspectives on the industry and on Neste. So I'm still in information collection mode. But a couple of observations still. First of all, my strong view here is that Neste is in a strong position. We are the pioneer in the renewable fuels industry, and really, Neste is the global market leader.
We have the strongest technological and innovation base, and this gives us a profound advantage as we move forward into a more competitive industry. Our current performance is not satisfactory, and we will discuss the causes to that here in a moment. But I still wanna, just for those of you who look also at the really long term, I just wanna say a couple of things. One is, I mean, the green transition, it is coming, it's inevitable. It's very critical for the European economy, but the journey is not going to be linear. It's going to be nonlinear, and it's gonna be volatile, and there will be phases when we go up and down, but I think the direction is clear. This is a, it's a growth industry, and Neste is well positioned.
But Neste is a corporation. We need more focus. We need more focus on revenue generation. We need to take a sharper view on costs and competitiveness, and we need to keep an eye on the balance sheet and on CapEx. And so therefore, we have now launched a full potential analysis to develop a robust plan, and that work has now started. And then finally, I'll comment in a moment, a little bit later, about what's going on with Porvoo and the hydrogen electrolyzer we had been planned to invest in. So here are some of my early observations. I won't go through all the points. I'll leave you...
If you wanna take a look at it later, but let me just comment on a few things still, which I already referred to, but which I feel are very strong. In addition to the long-term fundamentals, Neste is in a unique position because we have a strong supply of feedstock. We understand the nitty-gritty of this business, and we have unique pre-treatment capabilities and technologies and know-how. So that's a good foundation. We have a huge R&D team. We understand the technologies. You go to Porvoo and you look at the R&D center there, it's an amazing place. I mean, it's truly amazing, and I don't know if anyone has in the industry, in our sector, anything similar.
And as I said, when I talk to Neste employees, I see really the passion in their eyes. People are very committed to take this company to the next level, so I don't have any problems with the motivation of the staff. I mean, people really have the fire in their belly to move Neste forward. We just need more clarity on the direction, but obviously, we have invested a lot in new capacity, and some of it is now starting, and more capacity is coming, so for us operationally, we need to improve our ability now to ramp up those facilities and really to get more operational performance out of the fantastic assets this company has.
So that's more of an operational challenge for the new CEO, among other things. And Martti will go and do a deep dive on the numbers, but obviously, maybe it's, I mean, very easy for me to comment. On the left-hand slide is the price chart for the renewable diesel sector. The curve, the shape of the curve, and the trajectory, and the delta is very evident. I mean, prices have corrected quite materially, and we are today in a very different spot than we were just a year ago. That is one explanation for the change in profitability. You will not hear me making forecast about prices going forward.
I don't do that, but I think that, you know, we have a certain amount of volatility in these prices, and they can move in many directions. On the right-hand side, you can see the results, performance, overall, compared to what we did a year ago in the third quarter, the change is really a major drop in profitability. But for me, that is more a challenge, an opportunity to improve. I look at the number, and I say to myself, "Okay, what is it gonna take from us to improve those numbers?" And I said, you know, for me, that's more of a... It's an opportunity to show what Neste can do. So that's how I look at that number, although in itself, it's not, of course, something that we like.
So, as I mentioned at the beginning, we have now started the full potential analysis. So what is that, and why are we doing it? Well, as a person, I'm very fact-based. I'm very analytical. I wanna see the facts and numbers, so we're now doing a deep dive where we're canvassing basically the company. We're looking at the revenue side, we're looking at the cost side very comprehensively, and we're looking at the capital side, including working capital. Out of this work, we will come up with a robust plan, which will have clear prioritization, and we will start executing in a logical sequence, in an order that makes sense from the standpoint of trying to really hit the heavy items first, and that execution will then start next year.
I will come back to you in the beginning of the new year, when I have something more concrete to share. But I just want to give you a heads-up that that work has now started and is really essential, an essential tool for me, so that when I now start leading the company, that we get on the right trajectory, the right clock speed, and right angle of attack, so to speak, you know, from the get-go. Today, we have announced a decision, which, of course, is unfortunate, that we need to withdraw from investing in the 120 megawatt electrolyzer plant in Porvoo. Now, Neste is very committed to decarbonizing our company, and Porvoo, of course, does have CO2 emissions, so we...
Our objective is to reduce those and solve for that. But in the immediate situation we are now in, so we have two issues. One is the regulatory framework is moving in the right direction, which is positive, but the regulatory scheme does not sort of balance sufficiently well with the capacity that we were initially contemplating, so the 120 megawatt. And then secondly, we are in a cyclical business, and it's my point of view that in a cyclical business, we also need to look at the leverage. And we have set clear targets on where our leverage can go, and as the trend has been rising, I think it's prudent for me as the new CEO to make a decision here and to just halt this project.
Let's focus on the things we are working on now, and we will try to see if we can solve this decarbonization problem in Porvoo another way, get to the same result, but through a more capital-effective manner. So we will come back to that later in the future when we have a new pathway on how to do this. But overall, as I said, I want to confirm that we're committed to the decarbonization of the Porvoo facility, so those were my introductory remarks. I'll now hand it over to Martti. Martti will then go into the Q3 financials. Let's see if I can get the slide going.
Martti will talk about that, and then I will come back later and talk about the outlook and give you a bit of a more broader perspective about opportunities and uncertainties in this sector, and then we will be happy to answer your questions. Thank you.
Thank you very much, Heikki. So let's now go into the figures. I'd like to start by saying that financial-wise, the main theme in our third quarter result is that it reflects really the further weakened market, both in renewable products as well as in oil products. Like Heikki already mentioned, our current result level is unsatisfactory. We realize that. The challenging market conditions clearly impacted our margins, while on a positive side, we see clear initial progress on cost savings. More specifically, our third quarter EBITDA was EUR 293 million. That is 72% down year- on- year. Last year, in the third quarter, we had the peak quarter of that year, our result at that time, north of EUR 1 billion.
Going more specifically into the segments, in the renewable products, our comparable sales margin was $341 per ton, down about 62% from the last year's high level at 912, or 10% still from the second quarter level of $382 per ton. Similarly, in oil products, our total refining margin was $10.6 per barrel, down about 60% from last year's high level of $26.9 per barrel, and down also by 30% from the second quarter, $15.1 per barrel. So the challenging market condition is very clearly visible in our third quarter figures, both in renewable products as well as in oil products.
But on a positive note, our sales volumes increased quarter on quarter, both in renewable products, that includes also our SAF sales, where we reached a new quarterly high of 112 kilotons, clearly up also from the second quarter, as well as in oil products, we had a very solid performance and good sales following the turnaround in Porvoo in the second quarter. On a positive note, furthermore, our fixed cost savings are becoming now clearly more visible, what we've been initiating over the last 12 months and starting to be visible. Our total fixed cost in the third quarter were markedly below our last year, as well as the previous quarter. However, it's very clear, considering the challenging market condition, that further performance improvement actions will be required going forward.
I'd like to take one more metric from this slide, which is that our greenhouse gas reduction in the quarter was 3.6 million tons. That is a clear increase year- on- year over the 2.55 million tons last year. This is a clear improvement, of course, about our environmental handprint. Here we visualize the key market environment drivers that impacted our margins in the third quarter. In the third quarter, looking first at renewable products and comparing to a year ago, our margin was above all affected by a substantial decrease in diesel price. The weakening diesel price was also the main factor quarter on quarter.
Being more specific about that, Northwest Europe diesel came down about $65 per ton from the second quarter compared to the third quarter average, or the Gulf Coast diesel in the U.S., even $80 per ton. In addition, when we compare year- over- year, the US bio-ticket and renewable credit prices, as well as spot premiums in Europe, have both clearly weakened in a yearly comparison. At the same time, the waste and residue prices have remained relatively flat and not really giving us a helping hand margin-wise. On a positive note, during the third quarter, the credit prices, however, they slightly strengthened versus the second quarter levels. At the same time, in Europe, the spot premium still remained weak. And also in oil products, that is, that goes for our product cracks.
They decreased very clearly during the third quarter, and the decline is very visible, both in year- on- year as well as in quarter-on-quarter comparisons. Our focus on efficiency, working capital optimization, as well as balance sheet strength, those are set to continue going forward. In this slide, I'm sharing a few highlights of each of these from the third quarter. First, as to our fixed cost efficiency, in the third quarter, our comparable fixed costs were 16 million EUR lower than a year ago. And more specifically, our employee benefit costs were 126 million in the third quarter. That is 36 million below last year at 162 million. We also now forecast that our total fixed cost will be lower compared to last year. Still, in our second quarter report, we said that slightly higher.
Yet, of course, considering I'm stating that again, considering the challenging market conditions, all our efficient actions naturally need to continue going forward. Second, looking at our change in the net working capital, in our cash flow statement, our third quarter net working capital change was 143 million EUR positive, versus 268 million EUR negative last year. There's a clear improvement year- on- year, and more specifically, in the third quarter, we succeed in reducing our inventories by almost 600 million EUR, whereas the changes in receivables, that was also due to higher sales volumes, as well as payables, contributed negatively to our net working capital change. Of note that also year to date, there is an improvement in the net working capital change going compared to last year.
If you look forward, net working capital optimization continues to be a very high focus area for the group also in the fourth quarter. We have set very clear end-of-the-year targets and actions, both for renewable products as well as oil products. Finally, preserving a strong balance sheet continues to be a cornerstone of our strategy and financial planning. We are extremely determined to focus on balance sheet strength, and the same goes for preserving a strong liquidity. Here, I'd like to note that at the end of the third quarter, our liquid funds, as well as committed unutilized credit facilities, totaled about EUR 2.6 billion. That's actually up by about 149 million from the end of the second quarter.
Looking here more specifically at our cash flow in the third quarter, our cash flow was mainly impacted by the weak EBITDA, as well as by somewhat higher quarterly CapEx compared to several earlier quarters. Cash flow before financing activities came in at slightly negative for the quarter, at EUR -16 million, yet a clear improvement over the first two quarters of the year. Our cash outflows for investments total EUR 488 million in the third quarter. That is clearly above, for example, last year's level of EUR 258 million. The turn rate in our total net working capital was 41 days, compared to 40 days a year ago, so at about the same level. If we look at our cash flow trend, I think that the actions are already starting to be visible also here in the third quarter.
Going forward, cash flow, and as I mentioned, net working capital optimization, they continue to be very high focus areas for us in the fourth quarter. Let's then turn to our third quarter group result bridges by business segment, as well as by business driver. When first looking at the third quarter comparison bridge by business segment year-on-year, that is here on the left-hand side, we can see that all our business segments contributed actually to the decrease in comparable EBITDA year-over-year. Positive contribution only comes from others, including eliminations, but it consists of common corporate and functional costs, which as such, have clearly reduced year-over-year, and thereby, the allocation of timing of these costs to business segments may vary year-over-year, and as well as also by quarter.
When looking at the comparison bridge by driver year-over-year, on the right-hand side, we can see that there was a positive impact of 87 million EUR from higher sales. And that's positive. There was actually a positive sales volume contribution from all our business segments. On the other hand, the major decline in EBITDA comes from a declining sales margins, and again, unfortunately, actually from all our segments, in total, 839 million EUR. Here we again observe the impact of the adverse market conditions. On a positive note, like already mentioned, the group's comparable fixed costs were 16 million EUR lower than last year. As to a business segment level analysis, here we have first the third quarter comparable EBITDA bridge for renewable products, as well as a longer trend of renewable sales volume, as well as comparable sales margin by quarter since the beginning of 2020.
That's the graph on the right-hand side. Our comparable EBITDA in renewable products was 106 million EUR in the third quarter. Year-over-year, that was positively impacted by a high sales volume, which contributed a positive 62 million. There, the main reasons are our total sales volume in renewable products was now 999 kilotons, almost a million tons, versus 883 kilotons a year earlier. There's growth of about 13%, out of which SAF, SAF volume reached a new quarterly high of 112 kilotons, up from 36 kilotons a year earlier. Just to note that the share of sales to North America was 49% in this quarter, and to Europe, 51%. Going forward, we expect our SAF sales to further increase towards the end of the year.
Our sales margin had a negative contribution to the EBITDA by 492 million. There, the main elements, like I outlined before, were a clearly declined diesel price, as well as weaker US credit prices and weaker spot premiums in Europe. During the third quarter, there were also planned maintenance shutdowns, both in Singapore original line, as well as in Rotterdam, and this is reflected in the utilization, which was rather low at 52%, compared to 92% last year, at our own renewable production facilities. And the main maintenance shutdowns also contributed to an increase in total production costs, which impacted also the comparable sales margin. Martinez continued to have a diluting impact on Neste's overall comparable sales margin as well. On the right-hand side graph, we can see the markedly declined comparable sales margin during this year versus early years.
As required, we are now reporting that very clear. Also, Neste, we are prepared to optimize our production capacity in renewable products according to the market situation, if necessary or required. It's good to note also here that after the third quarter planned maintenance shutdown in October, we have reported that Singapore's first line, that is the original line, encountered an unforeseen equipment failure that led to the shutdown of the production line at the refinery. This is also expected to influence some renewable diesel customer deliveries to the U.S. in the fourth quarter. Here we have the same third quarter comparable EBITDA bridge for oil products, as well as along the trend line of the total refining margin in U.S. dollars per barrel, as well as the utilization rate by quarter since the beginning of 2020.
Our comparable EBITDA in oil products was EUR 141 million in the third quarter, year-on-year, positively impacted by higher sales volume, contributing EUR 24 million. Sales were north of 3 million tons, or about 140 kilotons, or roughly 5% higher compared to a year ago. There was solid operational performance throughout the quarter at our Porvoo refinery. The decline in EBITDA comes, compared to last year, from the market and a weaker total refining margin, in total, contributing EUR 347 million year-over-year. All product cracks basically declined in a yearly comparison, but overall, the key product margins still stayed above the pre-COVID averages.
The summer driving season, and as well as the cooling season, was supporting demand in the third quarter, but at the same time, the weak industrial cycle affected middle distillates demand, and the expected weather-related risks did not materialize. Brent crude oil prices were very volatile actually, during the third quarter, ranging between $70 or up to $89, and the quarter ended at about $73 per barrel for the Brent crude price. On the right-hand side, we can see also the market in decline, total refining margins for oil products during this year, if we compared on that, especially to former years, 2022 and 2023.
Here we see the third quarter comparable EBITDA bridge for marketing and services, as well as on the right-hand side, along a trend line of the comparable EBITDA, as well as comparable RONA, return on net assets, of this business segment by quarter since the beginning of 2020. In marketing and services, our comparable EBITDA was 32 million EUR, down 10 million EUR from a year ago. That was mainly due to the unit margins, which were tighter and had an impact of 8 million EUR on the comparable EBITDA. The decline in unit margins was primarily driven by the decrease in global oil product prices, which led to inventory losses. The prior years benefited in turn from a significant increase in Brent crude oil prices, resulting in turn in higher unit margins.
Fixed costs were EUR 3 million higher also year- over- year, mainly due to an ongoing ERP replacement, that is IT costs. Overall, I'd like to say that we are satisfied with the performance in marketing and services. We have been able to maintain high market shares in our respective markets, and the performance overall has been relatively steady and returns strong. I'd like to note here that the comparable RONA was almost at 30% at the end of the third quarter, although the EBITDA in this quarter was impacted, like I said, by inventory losses. Also, I'd like to note that in marketing and services, as opposed to our other two business segments, renewable products and oil products, the inventory gains and losses are continuously reported in the result of the business.
I will close up by taking a short look at our performance against our financial targets. At the end of September, our comparable ROAC, calculated over the last twelve months, was 8%, and of course, not meeting the group's financial target level of higher than 15% ROAC. Going forward, actions will be required, of course, to change this trend. As to our leverage, net debt to total capital, it averaged 35.2% at the end of the third quarter, which is still meeting our financial target level of less than 40%. I'm overall, somewhat, quite satisfied that we were able to reduce the growth trend line in leverage in the third quarter.
Having said that, of course, we have really high focus on cash flow, like I said, in the fourth quarter, and also on high focus on preserving, going forward, very determinedly, a strong balance sheet, also in the longer term. That is an absolute high priority for us. I will stop here and hand it back to Heikki, who will next continue on our outlook.
Thank you, Martti. So let's go to the outlook. Let me just highlight or read the, let's see, the main, main things here for the renewable products. Sales volume is expected to increase from 2023, and to reach an approximate number of 3.9 million tons, plus or minus 5% in 2024. Out of which, SAF volumes should be in the range of 0.35-0.55 million tons, and the full year, 2024 average sales margin would be in the $360-$490 per ton range. On oil products, sales volumes in 2024 will be lower than in 2023, impacted by the Porvoo turnaround in the second quarter, and the full year, 2024, total refining margin will be lower than 2023.
An additional information is available in the presentation. Now, let me finish off with a slide you will see me present when we have our quarterlies. Really want to take always a bit of a step back here and look at some of the opportunities and uncertainties in the business and in the sector also, and in the economy, which are relevant for Neste. So the things I want to highlight, obviously, is that, you know, if we look at opportunities, global macro, you know, starting to improve, China's starting to gradually stimulate its own economy, Europe starts to get its own plan and house back in order, and of course, the U.S. economy has been very robust. If this trend continues, things should start picking up in that respect in the economy.
Diesel prices have corrected quite a lot. Potential recovery, let's see next year. Then we have this whole question of effective implementation of climate regulation. A lot of regulation is coming online, for example, RED III. You know, how will the European Union then actually take that into concrete implementation? What is going to be the industrial policy of the European Union? How will the European Commission, now, when they come on board, how will they implement these things? I think the Commission and the European Union is very, you know, deeply embedded and deeply, let's say, committed to the green transition, although it does have a bit of a, from time to time, a bit of, how should I say, uncertain moments, as we've seen from the media. I think the direction is clear.
And then Neste potential. I mentioned to you in the beginning that we have now started this full potential analysis, and we are then gonna come back to you with what we are going to do, focusing on things we can control ourselves. Now in terms of uncertainties, I want to highlight three. This whole question of geopolitics. We have the U.S. election. You know, what's going to happen, you know, what's going to come out of that, remains to be seen. But of course, that is an uncertainty one has to consider when one is a global company like Neste. This question of the U.S. CFPC versus BTC, of course, if BTC continues, that would be positive for us. And then finally, I also want to mention unfair trade policies.
You know, Neste is investing heavily and has invested heavily into Europe. We're now building world-class facilities in Holland, in Rotterdam. We have two lines, second one converted. First one converted, second one is being built as we speak. I personally believe, and Neste believes that there needs to be a level playing field when it comes to trade and global trade. We have renewable diesel, it is covered by these trade protection measures related to anti-dumping, and it's our view that SAF also needs to be included in this EU ruling. So we will advocate strongly that SAF is also included. We think it's only fair.
There needs to be a level playing field, especially when European companies are investing so much capital at the front end of a growth trajectory. So that is just a point of view we have here now at Neste. So, ladies and gentlemen, those were our remarks. I think we are still on schedule, and I very much look forward to your questions. So I guess back to the operator.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Alejandro Vigil from Santander. Please go ahead.
Yes, hello, thank you for taking my questions. Heikki, best of luck in the new challenges. The first question is about recognizing you have been just a few weeks CEO of the company, and probably you will have more color, you said not in the beginning of next year, but which are your priorities thinking about the company in terms of capital allocation between CapEx and shareholder distributions, for example, looking at the situation of overcapacity in the market, et cetera. The second question is about today, we have also seen a big transaction in your sector with very high valuation multiples or at least, you know, attractive valuation multiples. What Neste needs to do to show the real value in the company? Thank you.
Yeah, Alejandro, first of all, thank you for your kind words, and I look forward to a discussion with you and your colleagues in the years to come. A big question, very important questions. I will not punt on them, but I need to give you just the answer I can give you. I think in terms of capital allocation, so as we've said before here, and Martti also confirmed, I mean, this is a growth business. It will grow long term, but the growth trajectory is non-linear, and so we need to think about how we add capacity as we go forward so that it is in some logical balance also with respect to our ability to fund those, you know, investments. We now have those two large investments, as you know, Singapore, Rotterdam.
For me as CEO, it's very much about getting those completed, ramped up, and then commercializing them. So one thing which will be one of my key priorities, which I can say already now, is, you know, Neste's commercial excellence. We need to get much closer to the customers. We need to be much, much more active, and we need to make sure that we move this volume profitably. So maybe I'll leave the first one there. And then in terms of valuation and value creation, honestly, I want to do my homework thoroughly. I have a reasonable understanding of the company, but it's too high level. So let me do the homework and then come back to you with something solid and robust, and something which is clear also to the Neste people, because ultimately, whatever we say, we need to deliver.
So, so sorry for the delay, but you have to wait until early next year.
Thank you.
Alejandro, still asking that with your second question, did you want to highlight the KKR buying the 25% stake in Enilive or I heard you say today, or that was just a general question?
Yes. Mm-hmm.
Yeah, just on that, we just, of course, been following that, and we realize Enilive was valued at EUR 12 billion, and KKR now, they concluded buying a 25% stake for EUR 3 billion, out of which, if I have it right, roughly EUR 2.5 billion by buying shares and with a EUR 0.5 billion investment straight into the equity of Enilive. So yeah, we need to analyze that further, but yeah, good valuation in this case anyway. It's a short comment.
Thank you.
The next question comes from Erwan Kerouredan from RBC. Please go ahead.
Thanks for taking my question, and welcome into your new role, Heikki, and thanks for the introductory comments and the relevant details on your past experience. I've got two questions, please. First on guidance for next year, not so much on absolute numbers, but more on communication style. Do you consider shifting to metrics other than the RP sales margin towards next year? Do you think the market is focusing on the wrong metric when it comes to Neste? This is my first question. And then my second question is on the slide where you highlight the strengths and the areas of concern, especially on the strength and where you highlight feedstock and pretreatment. Up until like last year, feedstock and pretreatment was an area of priority for potential strategic acquisition.
I understand the framework now is completely different. But given where we are in the cycle and given the decision you made at Porvoo, does it still leave some room for potential strategic acquisition in the feedstock and pre-treatment space for next year? These are my two questions. Thank you.
So, Irvin, thank you very much. I hope I pronounced your name correctly. So, thanks for those. Obviously, we take the matter of guidance very seriously, and it's our, you know, job to make sure that when we guide, that it's somehow helpful also to the investors, but also something that we can understand and can control. I don't know what Martti wants to say here, but my own view is we take it seriously. We will look at that and consider if changes need to be made, but if we make changes, I cannot yet say what those would be. Again, I need to think carefully what the right approach here is. But Martti, anything you want to add at this stage?
Thanks, everyone, for the question. We cannot really comment on you saying if the market has been too much focused on the wrong metric. We know it's been very much focused on the RP comparable sales margin. Of course, the future mid-longer term outlook should be more important than the short-term performance. That's the only thing I comment on that side.
And then on the M&A, the feedstock. Obviously, feedstock is strategically super important for the company, and pretreatments as well. The way I would look at it is that, you know, we continue to scan opportunities, you know, where obviously we have our eyes open, and we're monitoring. But at the same time, you know, well, there are different size of things you can do, right? Small, medium, and large. So, I think I would just now pace myself here and say, I'm gonna do the homework, but we will keep our eyes open, if something interesting pops up.
Thank you very much. That's helpful.
The next question comes from Christopher Kuplent from BofA. Please go ahead.
Hi there. I think Bank of America is nicer than BofA, but, good afternoon, good morning, everyone, anyway. Heikki, I'm not gonna embarrass you. The anticipation is growing by the minute for your CMD next year, so I want to focus on what's going on right now. I wonder whether you can give us a little bit more of an update on the issues that have come through on ramping up the original line in Singapore. Anything would be quite helpful if you can give us the backdrop to why things are moving more slowly, and any indication for how quickly you think this can be sorted out. And then a question on the quarter. You've mentioned SAF making new records, volumes-wise.
What can you tell us about the impact on the margin? Has it been accretive, yes, no? To what degree, in the same way you've been highlighting Martti as being dilutive, that would be helpful? Thank you.
Thank you. Good two questions. Thank you, Christopher. Also, feel free to ask me anything. I'll answer if I can. But on the Singapore original line. I mean, reality is that in process industry, and I have a lot of, you know, history and experiences, you know, unfortunately, sometimes in these large lines, when you're ramping up, you know, things can happen, and you can have, you know, technical problems, which is the case. We have our best engineers working on it twenty-four seven. We have our global experts, you know, supporting the work. I know the repairs have started. I've personally spoken to our local, you know, plant leader there in Singapore, so I get a regular update.
We are on top of it, but I want to underline the thing that at Neste, you know, whatever we do, we always go safety first, volume second. So the repairs have to be done correctly and so that there's no safety risk. But I cannot give you a definite date, but I can confirm that the guys are working twenty-four seven, and we have the best expertise Neste has available to try to solve this.
Yeah, thanks, Erwan, for the—I'll try to answer the second question. So obviously, we are not gonna—we cannot give any of our own prices like we have said before. However, we can make reference to the Argus and Platts open databases and their reference prices. So looking at the Argus price, the SAF price was about $3,000 per ton last year. It averages about, if I have it right, about 2,460 in the second quarter. And actually, unfortunately, with kind of following also the trend overall in the markets and renewable diesel, it came down about $480 per ton in the Argus reference prices, where it averages about a bit south of 2,000 dollars per ton in the third quarter.
So down about four eighty. And right now we are between, if I have it right, in the reference price between eighteen hundred and nineteen hundred. If you would divide that by the jet price, jet fuel price, about seven hundred, you have a ratio of about two point six. Of course, also the jet price have come down. But obviously, of course, we are a big supplier. We have different criteria as feedstock and so on. So, this is not any quote on our prices, but this is straight from the Argus database, their reference prices.
Thank you, Martti. And I presume at those levels, though, it has been accretive to your margin that you've reported?
That we can say, it's been accretive also in the third quarter, like we said, and like I said, we're looking forward to increase our SAF sales also in the fourth quarter from the third quarter level.
Understood. Thank you.
The next question comes from Giacomo Romeo, from Jefferies International Limited. Please go ahead.
Hello, thank you, and welcome, Heikki. Two questions. I think I want to go back to your final slides, because you raised two important points there. First one on the move to PTC from BTC. Is that still your base case that we're going to see a move to PTC from the first of January? And if that is the case, do you expect you will need to redirect some of your volumes from Singapore to Europe? And sort of how are you thinking about the trade-offs there, and also in the context of term contract renegotiations that are occurring right now? The second question is about the point you raised on unfair trade policies.
And, you make the point that you are seeking an extension of the anti-dumping measures taken in the EU to the Chinese SAF imports. Just wanted to clarify, can you reopen the RD anti-dumping case, or do you think you will need to start a new probe? And, what's the timeline there?
Yeah, so, good questions. I think on the U.S. situation, I think these are, of course, it's our best guess. I mean, we don't know for sure, but it would be more sort of that, you know, most likely the BTC, and I think it's probably fifty/fifty. You know, BTC probably not being extended is a possibility.
Yeah. Thank you, Heikki.
Thank you.
There is a bill currently in the Congress to extend it for another year. We don't know if it will be a bypass, so the base case for us is that the CFPC would be what comes out, but we'll see in a couple of months time, perhaps more.
Indeed. But in terms of the optimization, so of course, the good thing here is that we have opportunities to optimize, that we have assets on multiple jurisdictions, which allow us to try to maximize margins and revenues in different market circumstances. But ultimately, you know, this will be driven by value and opportunity. So if this were to happen, then, you know, we will try to find the best mix in terms of, you know, feedstock and market demand, and optimize accordingly. So yes, there's upside here. The upside is we have ability to do things. So that would be my response.
Then on the trade matter, I just wanted to raise this more as a topic here, because I think this is a bit of a philosophical question also, with respect to, you know, investments in Europe and the whole commitment of Europe in terms of the green transition. You know, I come from another industry where if you follow those, you know, these are daily topics. So I have a fair amount of experience and history from understanding these. But in terms of how we practically go forward, you know, I can't really comment on that yet. I just wanna raise. I think it's an important topic, and we will talk about it also in the future, and also with the respective, you know, authorities that deal with these matters.
To your question, Giacomo, I think there is still a little bit of time. It hasn't been a final verdict before starting a new probe. To include SAF into the Chinese-related anti-dumping duty, it now encompasses only biofuels.
Indeed
... including renewable fuel, renewable diesel.
Indeed, that is the case.
Thank you.
The next question comes from Sasikanth Chilukuru, from Morgan Stanley. Please go ahead.
Hi, thanks for taking my questions. I had two, please, both related to SAF. The first was regarding SAF sales. You've highlighted voluntary SAF demand has not been realized as expected so far. I was just wondering what the reasons were behind this, what has changed, and how does this imply for next year's sales? Do you expect airlines to meet these mandates or to meet the mandates when they start next year? How should we be thinking about SAF sales in the next year? The second one was on the Rotterdam SAF optionality project. I was just wondering where we are with that, as it started producing already. Yeah, the progress on that project, please?
Yeah, on the first one, so obviously I have to also ask for Martti here to add to my commentary. But, I mean, I think the mandates are coming, and it's clear. I mean, they will happen. You know, how that- you know, is it from January or is it from, from June or May? You know, let's see. But I think it is coming, and it's a 2% until, you know, 2029, and then it goes up to 6%. So I think that's given, people will need to follow that mandate. The question with voluntary is also... I think it's, I mean, the way I sort of understand it, and I need to learn more, but the way I understand is, of course, you know, airlines have made big commitments.
The reality is, there is no other way, in the near, whatever, the next half decade, to abate carbon, other than SAF. That's the only way. So this product has to be used. And consequently, you know, if airlines intend to stay to their commitments, you know, there will also be need to be voluntary, reductions. And also, you have corporates and others who also are, you know, taking their own decisions. I think the only problem here is that, you know, the economy is not great, rates have gone up. There's been a lot of inflation, and I think in the full, you know, supply chain, whether it's the consumers or the corporates or the airlines, everybody's seeing a bit of a cost pressure here.
So I mean, I understand, of course, if you're the CEO of an airline, that, you know, you're trying to find the optimum, you know, given your own business. But I think the major trend here is that the mandates are coming. And on the RD, on the Rotterdam one line, ready to go here?
Uh, yeah.
Yeah.
Maybe just on the SAF.
Yeah.
We have seen a little bit less voluntary demand now, during this year. We expect, of course, higher sales in the fourth quarter.
Sure.
And it's an uncertain thing for next year, how much there will be voluntary. Definitely, we believe very much that. Of course, the mandated demand, the opt-in demand will come in place, but the level of the voluntary demand is more of an issue, and hopefully we can know more during next year. Then to the Rotterdam optionality project, I think you referred to the our renewable jet fuel project.
Indeed.
So the mechanical works are there, complete. We are still waiting for certain documents from authorities to be able to ramp up. We hope to be ramped up, and that we have started also production by the end of the year.
Thank you.
The next question comes from Artem Beletski from SEB. Please go ahead.
... And thank you for providing your initial thoughts. At this stage, I actually have three questions. So the first one is your commentary in the report relating to reoptimization of global production capacity in context of the US regulatory framework. Could you maybe a bit elaborate more about this? So is it relating to basically volume reallocation, adjusting production, or is it something potentially more structural, what you mean there? And then I would like to ask about the term deal negotiations. Any comments on that front? So I understand that the vast majority of those deals are likely to be yet still to be signed, maybe November, December. And the last one is just on current trading.
So looking at some pictures you are presenting today, so there, there seems to be some signs of improvement when it comes to, for example, RD pricing, LCFS, and RINs. Can you confirm that this is also something what you are seeing when it comes to your own operations and margins?
Maybe if I start with the first two, if that's okay, and Martti, then you can build on that with the second and third. I think in terms of reoptimization, you said reoptimization, capacity management and structural. Definitely not structural. It's very much about, you know, leveraging the platform we have, taking advantage of the assets in different places, and then trying to optimize. I mean, the reality is, you know, we have a lot of skills here in terms of how we manage the feedstock, to combine or to match the feedstock with the customer demand. And that's what we're good at. That is something that we would have to do then more, and that would be number one priority before we look at, you know, anything else.
We would work very hard on that reoptimization before anything else is considered. Then the term negotiations. Negotiations have started, right?
Yeah, the term negotiations have started, okay. We are rereading, of course, various options, how also to maneuver, taking into account the current, you could say, difficult, more challenging, pricing environment in terms of pricing mechanisms. Really, we have nothing at this stage to say on that side. We need to come back later during the quarter or early next year. And then to the current trading of some of the market parameters, thanks, Artem, for, by the way, these questions. So you're right. So the LCFS, as well as the RINs, they have appreciated somewhat, now further, during. I think the last one I looked at LCFS was about 67 for the credit and RINs maybe at 68, coming both way, I think, bit below 60 in the third quarter.
Also, the spot premiums, if you look at the Argus database, I think the average for RD in the third quarter was, again, referring to the Argus data, like $1,560 per ton. Now, there's been an uptick in October to over $1,700 recently, so from $600 to about $1,700. However, having said that, so it's important to note that during this year, we have termed on the RD side, when we talk about European spot premiums, 75% or even up to 80%. So the spot premium hikes don't really affect to any bigger extent our this year's margins. But it's of course positive if this trend would continue, thinking about next year. Then a very important contributor is the diesel price.
The diesel price went, like I said, downwards clearly in the second quarter. Now, in the beginning of the third quarter, it first appreciated back to over $700 per ton, but now the latest price was again about $670. So that, on the other hand, has been moving as of very recent towards the wrong direction. So you have both positives and some negatives here in the big picture.
Okay, very good. Thank you.
The next question comes from Peter Low from Redburn Atlantic. Please go ahead.
Hi, thanks. In renewable products, you cite higher production costs, due to kind of the maintenance shutdowns in the quarter. Are you able to quantify the impact of that on the margin, and perhaps whether you'd expect a similar impact in Q4, given the Singapore turnaround? And then my second question was on hedging and, really your risk management approach in renewable products. I would have expected your hedging program to protect you at least partially from the fall in diesel prices that we've seen, this year and in this quarter in particular, but it doesn't really seem to have had any visible impact on the Q3 results. Can you perhaps explain why that's the case? Thanks.
Thanks, Peter, for the question. So the higher production cost, rightfully so, I mentioned that because of the maintenance shutdowns, it had an impact. Well, the impact was negative in the range of $40-$50 per ton, where we can give out that figure in the overall margin. So there were both the diesel price, then this on the negative side, impacting the third quarter margin. On the positive side, some appreciation from the U.S. credits. Actually, there was a positive contribution, not a very large one, but also from hedging in the third quarter, coming mainly from our margin hedging in the E.U. side. In the U.S. side, it's been a little bit sideways. And also from basic utilities, we had slightly negative, but overall, a positive contribution from hedging.
Our hedging ratio was 46% in the third quarter, and at this moment, the ratio is 46% also for next year. I'd like to pick up one element there further. Of course, we used POGO, Palm Oil Gasoil Spread, as a proxy hedge, and we've seen more recently, both palm oil going upwards, on the other hand, diesel downwards, so the spread has widened. Particularly on the European side, we have hedges in place, which is smoothing out the impact. You referred more to the diesel price. Yes. And then you asked also about the higher production costs, what could be their impact?
Too early to call for the fourth quarter, but typically, if we have maintenance shutdowns, we have ramping up importantly also at Martinez, so this overall incurs some more costs to our comparable sales margin.
The next question comes from Michele Della Vigna from Goldman Sachs. Please go ahead.
Thank you very much. It's Michele Della Vigna here. Hey, and congratulations on leading a key European clean tech leader, although clearly at a bit of a challenging time for margins. I wanted to ask you two questions. The first one is a little bit more strategic. You clearly say that the performance of Neste was not satisfactory outside of the difficult market conditions. What would you have done differently at Neste in the last couple of years? And are there any clear low-hanging fruit that you think you can work on with clear benefits for the next couple of years? And then my second question is more about regulation. You talk about rising renewable diesel demand the next year.
We certainly get to the same outcome, but I was wondering if you could quantify perhaps how you expect the German renewable diesel regulatory changes perhaps to impact their demand in 2025? Thank you.
Yeah. Now, what a tough question on, you know, looking at the past. I mean, I think it's sort of, you know, not really kosher to start evaluating also past performance beyond what the numbers currently say. You know, I think that... You know, I think at this stage, my response to your question, and, was it Nicole, by the way? Did I understand it wasn't Michele there? is simply that, we're gonna do our homework now very thoroughly. I'm not gonna start second-guessing, you know, what would have made sense in the past. The past is the past, and, we're gonna get our homework done.
I've told you the key areas we're gonna focus on: the commercial side, a full review of the costs, both variable and fixed, and then a complete review of the capital side. And the answer is going to come out of those on how we create more value. What would have I done differently? I mean, I can't give you an answer, you know, off the cuff that is not sort of prudent even. But on the regulatory side, in Germany, I think we have some positive views on that, or how is it?
Yeah, correct. Thanks, Michele, for the great question, and thanks also for the report highlighting this. So, well, firstly, we think very positively on the recent regulatory changes in Germany. Finally, it's a big market, of course, if that would open more into already the renewable fuels in general, would be great news. There are several elements there. First one is, already in the spring, there was the elimination of the so-called upstream emission right certificates as a compliance option from 2025, that we think could have a positive contribution to demand of, say, roughly 300 kilotons. Then also there is a general increase in 2025, so next year in the GHG quota.
I think it's going up to 10.6% from 9.4%, so this is still RED II, and that could bring 50 kilotons or perhaps even more. And the RED III transposition is a further opportunity on top. And naturally also there's EU-wide import duties now for Chinese biodiesel could have some positive impact. Then there is one more important element, which is there is a proposal at this stage, which we haven't yet fully evaluated from our side, is a pause in the so-called carryover of the GHG certificates from compliance years in 2025, 2026. So you couldn't carry those over what you have left, but then it's done for previous years.
I think if that proposal will come true, that should have a further positive impact, but we haven't quantified that impact at this stage.
Thank you.
The next question comes from Iiris Theman from Carnegie. Please go ahead.
Hi, this is Iiris from Carnegie, and thanks for taking my questions. I have two. So, firstly, I think previously you have talked about SAF demand of four million tons next year, but basically, what is your current expectation for next year in terms of SAF demand? And secondly, in terms of investment, so are there any other investments basically that are under consideration or could be delayed, especially thinking about your, your Rotterdam capacity investment that should be ramped up in 2026? But are you still planning to do it as previously planned? Thanks.
Do you want to comment on the SAF volume estimate for 2025 in terms of demand?
2025, yes. I think Iiris knows very well we have had our figure earlier, and our CMD, it could be four million. But that four million tons includes also voluntary demand. At the moment, because of our experience from this year, we have become more cautious. This has been already our communication clearly during this autumn on the road show. So we are saying that the mandated and the opt-in demand in the U.S. on top of the European mandates and some other European countries like U.K., Switzerland, and so forth, could be up to 2.5 million tons, and then on top of that, voluntary demand, which we don't know today. That is the issue, and we need to come back when we know more during next year, how things shape up on that front.
Iiris, nice to meet you here. Also, thanks for the question on the investments, and you specifically asked about the Rotterdam and new facility, the line number two. I've had a chance to go and visit. It's going to be a fantastic world-class facility next to our existing line. It's a very interesting and competitive facility and integrated overall. Teams are working very hard to build that and complete that project, and we're gonna do everything we can so that it will be ready then in twenty twenty-six, and we will be within the budget.
Obviously, in building these types of investments, you know, post-COVID is not that easy always, but we have our best people on it and good partners, and we will do our utmost to make sure it's finished on time. Nothing more to say at this stage, so...
Okay, thank you.
The next question comes from Joshua Stone from Barclays. Please go ahead.
Hey, good afternoon, everyone. I have two questions, if that's okay.
Sure.
The first one is on term sales. So just wonder, our RP sales margin was more than $100 per ton, Q3 last year, and this quarter is kind of mid-$300s. I wonder how much premium can you lock in through term sales, or like, how should they think about in 2025? If margins are really low this year, can you get really high next year, vice versa? And then number two, I want to ask about your capital framework. Heikki, you said a lot of very nice things about CapEx discipline, about cost-cutting efficiency, stuff like that, but how should they balance on different things if you could cut your CapEx, if you could improve your cash flow next year, but the main shareholder remuneration can be protected? Thank you.
Do you want to comment on the term matter first?
Yes, thank you, Nash, for the question. I'm not sure if I exactly understood fully your question, but let me just conclude that, like I said, in the challenging environment, we need to also think of new potential new ways of looking at the term sales. We've been previously, like in RD, using a lot the diesel price as the quote, and then on top of that, the customer premium, and then the credits in the U.S. But of course, now, when we have also the spot prices have been on a lower level, so it comes also from our point of view, how much do we bind actually to the term sales? And should we look at some other ways of terming up?
So should we instead use reference prices already to a certain extent as a contributor to the pricing? So this is something we are currently looking. I cannot say entirely, and this, of course, a very strategic issue as well, well, for us. So looking at different ways how to optimize our opportunities next year, I think that's the key here.
And in terms of your question about the capital framework, so I just want to still, you know, hold the horses here. As I said, we're doing the analysis now, and I will come back to you when we have formulated our total plan, and we have a clear execution roadmap. So just be patient. We'll come back to you on that one, but then in terms of, you know, CapEx in general, yes, you know, I've made a decision here that, as we've announced today regarding the Porvoo electrolyzer, I think that's kind of, how should I say, a separate matter, because, yes, we're going to. Our plan is to decarbonize Porvoo, yes.
But at the same time, you know, we need to make sure we do it in the most capital efficient manner. And the idea we now have isn't going to be, in our view, based on what we know today, the right solution. So it's prudent to wait a moment here and rethink the plan. Also, given where we are on the leverage, which you can see from the charts, you know, where the curve is. So those were the two factors on that. Now, regarding the other investments, you know, we're in a growth industry. We make these huge investments, you know, to take advantage of the long-term growth, which is coming, and we very much believe, you know, it will be coming there.
But the thing here is that you make these investments for decades, and it's impossible to time, you know, a huge facility like Rotterdam to, you know, to the exact, you know, perfect window. So we will complete those projects, we will get ready for the growth, and of course, if there are moments when the demand isn't picking up as rapidly, we then need to optimize. But, you know, we are a market leader in this industry. We wanna maintain our strong position globally, and like, I think you said in the beginning that, I mean, we're the, in the clean tech industry, we're a major player. We intend to do that in the future or maintain that position also in the future.
Understand. Thank you.
The next question comes from Matt Lofting, from J.P. Morgan. Please go ahead.
Thanks for taking the questions, and hi, Heikki, thanks for sharing your remarks earlier. I think during them, you talked about the experience that you have in transformation across industrial sectors and businesses. Wondered if you could just share some initial perspectives on the extent to which you currently view Neste as a real underlying turnaround story versus being more a situation of better preparing and organizing the company for market recovery in the future, bearing in mind, as you talked about, the cyclical and regulated nature of the markets that Neste operates in. So, thoughts around that would be appreciated. And then, secondly, I just wanted to come back on SAF.
I mean, it sort of does seem increasingly like the ramp of voluntary demand has proved through the last sort of six to 12 months to be substantially below the company's prior expectations. What do you think was wrong with the prior expectations, or what's been the source of the undershoot? And when you look forward to twenty twenty-five plus, what does that imply in terms of the likelihood that ultimately this industry does grow, but a scenario that it continues to grow slower than was previously hoped, even as mandates come in? Thank you.
Yeah, Matt. Matt, thank you. Sorry, I may be a little bit losing my voice. I've been, you know, speaking the whole day, so, just bear with me if my voice is a little bit losing its pace here. I think it's a very good question you ask about the transformation versus turnaround. I think this is very much a company which is very well positioned. It has huge strengths. It's a formidable leader. I mean, in some ways, and I like to say to the Neste people, you know, we're the pioneer in this industry, and sometimes it's a bit tough to be the pioneer. But, you know, the basis of this company is very sound. The long-term outlook of the industry is very good.
It's more sort of, you know, getting the most out of what we have and positioning the company in each period at each moment in time of the cycle in the right way. Having more focus, you know, clock speed, you know, we're not a massive organization. We have thousands of people, but, you know, it's getting the resources we have, really focusing on the key things that matter. I think it's more around that. Some of the industries where I worked, you had, you know, demand problems or industries have gone into a massive turmoil. That's not the case here. So the long-term outlook, you know, in that respect, is good, and it's a different situation.
Different situations require different, let's say, approaches, and, you know, we will come up with a good plan, and, I can tell you, as I've met people here in Neste so far, I see a lot of, a lot of energy and passion, and people are super committed, you know, to make this a great company. And it ultimately starts from people, and so the energy I see in the company gives me great belief that Neste will still, can still do many, many great things. On the voluntary, about the past, maybe I hand over to Martti, to your question about the past assumptions.
Yeah, thanks, Matt, for the great question here. First, I wanna say I think it's too early to call. I mean, the formation of the whole SAF business and the industry, if you may use that word, is still at its infancy. I mean, we don't know how it will pan out in the next year or in the next several years. What we've seen is that, of course, if you look at airlines in general, I mean, there's been the COVID period, then we had the energy crisis, high jet prices, et cetera. So they have had years where they have had to struggle with their cost basis. So we have seen a number of airlines who have partly at least been withdrawing from their former sustainability commitments.
So then raises the question, how well airlines will be pushing forward a stronger agenda, what they had perhaps given out earlier? I mean, this is one of the things. Another things I think relates to emission rights and for example, EU member states, so air travel is within that scope. And it will go for individual countries that is, is it that they wanna regulate, you know, just the mandated demand level, or if they wanna push based on the emission rights, how they wanna abate, looking from a national level related to emission rights, the greenhouse gas reductions in the whole country, though. So do they set separate incentive systems or higher levels of ambition and so forth?
I wanna also point out that one thing that has come out now already is U.K., which is not anymore part of E.U., which has a 2% mandate for next year, and then up to 10% in 2030, so higher than the 6%. And there is a ladder, how one grows up there. But of course, the RefuelEU Aviation doesn't have a ladder built in.
Mm-hmm.
That has to be then, made by the individual member states. So how that all will go from 2% to 6%, that's also an important question. So these kind of elements relate to the formation of voluntary demand. As such, I think the whole industry is very committed to cut down their CO2, greenhouse gas reductions, but how it will all go, we'll see.
Great. Thanks, gents.
I think-
The next question comes from Henri Patricot from UBS. Please go ahead.
Yes, everyone, thank you for the update, and then thank you, Heikki, for the introduction. I have two questions, please. The first one, I wanted to come back to some of the comments you made earlier about having a kinda focus on revenue generation, customer excellence. I was wondering if you can expand on any area, any market, is it in South where you think you could be doing more? Is there a particular geography that you see, where you see more potential? And then secondly, just on the come back to the feedstock prices, which you mentioned have been held up very well this year, despite the more challenging environment for renewable fuel producers. Is that something that has surprised you?
Any comments you can make on how you see feedstock prices moving over the next few months? Thank you.
So if I can just, maybe you could comment on the feedstock. I think on the revenue and the commercial standpoint, I mean, this is a growth industry. I think there's sort of three elements that we need to work on. Obviously, we need to stay very close to our customers, airlines and others, to understand what their needs are and find ways how do we can bring our product to market in the most efficient and cost-effective matter. So that's, I think, being just in front of the customers and expanding the customer reach globally as much as we can. Second is really advocacy.
So we're still in the early innings, and I think some markets like EU are kind of ahead of the curve, and many other countries are still catching up maybe three, four, or five years behind EU in terms of the, you know, the regulatory framework. So we need to be a strong advocate, you know, to create that demand pull, and so that's why we have our resources doing that. And I think the third is, I think maybe just a bit of a, you know, my own sentiment that, you know, we're here to win and maintain sort of a good, positive spirit in terms of growing the business. So yeah, I think those are some of the elements. But on the more detailed side, you know, I'll have to come back then, you know, next year.
Yeah, and on the feedstock, I mean, this is an element that has a big impact to our comparable sales margin in renewable products. So, maybe two issues I'd like to mention that what we're seeing is regional differences, as we've commented before, and this is an advantage for Neste, we think, because we are sourcing globally, about 60 countries, more than 500 vendors, so forth, like we have said. If I look today into, again, the external quotes that are - they are not necessarily our prices, but in the US, UCO is around about $1,000 per ton. In the EU, it's been somewhere north of $900, maybe $920, but then you are north of $800 in China. So there are between these three regions quite sizable differences.
Overall, we're seeing relatively flat movement now in the beginning of the fourth quarter in the feedstock. Some feedstocks are perhaps a little bit downwards, but the big trend, flat.
Thank you.
And I think we have been running out of time, so we have to stop the-
So-
Yeah, sorry.
So anyway, if I may just say a few final closing remarks, I usually always like to wrap up these sessions with a couple of points. So first of all, thank you very much for your great questions, and nice to have this conversation with you, and look forward to meeting you also then, going forward. I'll leave you with a couple of points of summary. As I've said before, I think Neste is a great company. We have fantastic foundation to build our business going forward, and we are in a growth industry. Yes, I think I'm not happy with the results of the third quarter. No one in Neste is pleased with that, but I know we can and we intend to do better.
We've made a decision. I've made a decision here after eight days to take a new look at that Porvoo investment in hydrogen. I think it's a prudent decision at the moment to take, and that's how we go forward. Then finally, as I said, we've now started the work on the full potential analysis. My intention is to do it professionally, comprehensively, and then come up with a robust, you know, realistic but ambitious plan, and we will then discuss that in the new year. So that's all we have for today. I hope you found this helpful in your own work, and we look forward then to seeing you again in the new year. Take care.