Good afternoon, ladies and gentlemen, and welcome to this conference call to discuss Neste's fourth quarter and full year 2020 results published earlier today. I'm Juha-Pekka Kekäläinen, Head of Neste IR, and here 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, Marko Pekkola of Oil Products, and Panu Kopra of Marketing & 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 CEO, Peter Vanacker, to start with the presentation. Peter, please go ahead.
Thank you very much, J.P. A very good afternoon to all of you participating around the world, also on my behalf. We appreciate you joining us to discuss our fourth quarter and also the full year results for 2020. 2020 was unlike anything that we have ever seen or experienced. Oil price volatility, very low refining margins, a global pandemic, an associated recession. Early in the year, as it became clear that the virus is becoming more widespread, our leadership team established three guiding principles for the short term. Number one, protect our employees and communities. Number two, keep our commitments to our investors. Three, take actions to strengthen our company for the future. Beyond the very good progress that we made on our strategy implementation, I also want to take a moment to acknowledge our global team that delivered our results.
These individuals, both those who were able to work remotely and those who continued to work on the front lines at our manufacturing sites, form a strong and nimble team. They have my sincere and deepest gratitude. If the pandemic reinforced anything, it is the value of our renewable products in serving the need to reduce greenhouse gas emissions. The uncertainty caused by the COVID-19 pandemic continues, and the vaccination schemes seem not to proceeding as fast as we would all hope. Therefore, we are pleased to share with you our solid overall performance in the last quarter and in the year 2020 as a whole. If we move to the year 2020, in brief.
Despite the market turbulence and disruptions caused by the COVID-19 pandemic, the year 2020 was a success for Neste in many ways. We had a solid performance and posted a comparable EBIT of EUR 1.416 billion. We focused a lot on delivering an excellent cash flow. As a result of our actions, our cash flow was strong, and I will make some further comments on that later. In 2020, our renewable products proved to be very resilient, with increased sales volumes and strong margins. The renewable diesel demand remained good, and our annual sales volumes were almost three million tons. As expected, the feedstock markets remained tight, and particularly, the palm oil price continued its way up.
As a result of successful sales performance and the optimization of market mix and feedstock mix, as well as a significant positive contribution from margin hedging, we were able to generate very strong sales margins. The comparable sales margin averaged $703 per ton in 2020, and a very high $760 per ton in the fourth quarter. That was a great achievement and may be difficult to replicate. Oil Products suffered from a continued historically weak refining market caused by the global COVID-19 related demand reduction and the resulting oversupply situation. The reference margin, reflecting the general market conditions, averaged only $0.6 per barrel in 2020. It was about $5.6 per barrel lower than in the previous year, which had a -EUR 490 million on the comparable operating profit year-on-year.
On a positive note, our additional margin was strong at $6.90 per barrel, supported by good operational performance, currency hedging, and contango inventory profits. Substantial cost reduction measures have been successfully taken in Oil Products. Our Marketing & Services segment performed very well in the challenging market. Sales volumes were still impacted by the COVID-19 pandemic, but we were able to improve unit margins. Marketing & Services has also done a great job in reducing their cost base.
Despite the market turbulence, we continued to focus on our strategy execution. I will come back to that at the end of the presentation. In order to ensure the long-term competitiveness of the Oil Products business, we initiated cooperation negotiations on a plan to restructure our refinery operations in Finland. The negotiations were concluded in November 2020. As a consequence, we have decided to shut down the refinery operations in Naantali. We will focus the site on terminal and harbor operations, as well as renew the Oil Products operational model. In the second phase of the transformation, the Porvoo refinery will be developed towards co-processing of renewable and circular raw materials. We have also started the implementation of measures to bring our greenhouse gas emissions to net zero by 2035.
The shutdown of the Naantali refining operations and the renewal of the Oil Products operating model will lead to approximately 370 redundancies. We're supporting our people in adapting to this change in several ways. These restructuring measures are expected to result in annual fixed cost savings of approximately EUR 50 million. The board of directors' dividend proposal to the AGM on the 30th of March is EUR 0.80 per share. It is fully in line with our 50% distribution policy. A couple of words on safety. Neste continues to take the risks related to the COVID-19 pandemic seriously. Our primary objective is to ensure the health and safety of our employees, our customers, and other partners, as well as to ensure the continuity of our operations and secure supply of products.
Our occupational safety performance was the best ever in 2020, and the total recordable incident frequency was 1.3 incidents per million hours. The process safety event rate was a bit up from the previous year at 1.6, but we met our target for 2020. Our systematic safety work continues every day. On cash flow, I would like to make a special point about our excellent cash flow developments. It has really been in the focus during the pandemic year, when we have also continued to invest in strategic projects and made several acquisitions. Prime examples of these are the completed Mahoney acquisition and the yet-to-be-closed Bunge acquisition. Our net cash generated from operating activities was over EUR 2 billion and the free cash flow over EUR 1 billion. Our people have really done a great job in safeguarding our cash flow.
On the next slide, despite the challenges in Oil Products and the extraordinary retroactive BTC contribution not impacting the return figures anymore, our financial position continues solid. We reached an after-tax ROACE of 17.3% on a rolling 12-month basis, clearly exceeding the 15% target. At the end of December, we were net debt-free as our leverage ratio was -4.7%. As stated before, the strong financial position enables the implementation of our growth strategy going forward. This continues to be very important in these turbulent times. Now, with these opening remarks, I would like to hand over to Jyrki to discuss the financials in more detail.
Yes. Thank you, Peter. If you think about last year, 2020, I think it's good to say that let's close the COVID-19 year. I think that it was a year that provided more uncertainties and scenario thinking than any other year since 2009. For Neste, like already heard earlier, it was a year of resilient renewable products, high volumes, and solid sales margins. Global oil industry really hit Oil Products, like mentioned, with really low reference margin, and it also impacted close to EUR 500 million. On the other hand, we had a well-managed Marketing & Services business. What all of this meant in figures, that will be with the next pages. If we have the group financials, let's start with the full year figures, the first two columns there. I will comment comparable EBIT separately.
If you look the full year comparison, we basically deliver EUR 4 billion lower revenues, and that's basically roughly EUR 1 billion each quarter. Throughout the year, it was EUR 3 billion coming out of the crude oil price and EUR 1 billion out of the volumes, mainly fossil volumes. That is the impact of the COVID-19 during 2020. Like mentioned just earlier, we had a very strong cash flow, talking about the free cash flow, this EUR 1.02 billion. It was again over EUR 1 billion like 2019, but really in a totally different market environment. We really continue to focus on the cash flow. Our CapEx and M&A activities were EUR 400 million higher than 2019.
What we basically did, we had a very, very tight focus on inventories, closing the contango inventories at the year-end with Oil Products, getting the 2018-2019 BTCs from the U.S., then really focusing on the tight collection of receivables. This EUR 460 million that was there as a cash flow item coming out of working capital was a great achievement. At the end of the day, the comparable earnings per share, it was EUR 1.60. According to our policy, the dividend, like discussed, it was EUR 0.80 per share. If you look the full year comparable EBIT, you see a big change between 2019 and 2020. I think the big thing here is really the retrospective 2018 BTC EUR 142 million. Have the figures still. Don't change it. Good. The true profitability change during a year, it was basically EUR 123 million.
Basically in RP, it really means that half of that came from higher fixed cost, like we have basically focused on strategic elements, and then we have the FX changes. The positive thing certainly with RP during 2020 was the higher sales volume and slightly lower sales margin compared to 2019. We talk about the OP weak performance already. The COVID-19 basically make a big change in their profitability. That was EUR 336 million lower. Combined RP and OP for EUR 600 million. Then we have the positive things coming out of MS and also coming out of the other segment that also improved, but it was really colored by the BTC that basically kind of disturbed the comparison that we always have to take into account.
If you then look the two last columns talking about Q4 2020, again, like mentioned, our revenues were EUR 1 billion lower coming out of basically mostly crude oil price. Some effect also the FX, it's now totally different level compared to 2019, especially U.S. dollar. In comp EBIT in Q4, if we just take out these changes that took place in the BTC element, the EUR 380 million in Q4, it was very close to the level of Q1 and Q3. Basically making the full year figure than what it was like mentioned earlier. The Q4, it has really big changes because of this BTC. You see 2019, it was EUR 781 million, and you need to take away the 2018, and then you need to take the three quarters 2019 that you get kind of the comparable figures.
Basically then you are talking about EUR 473 million versus EUR 380 million, meaning EUR 93 million lower. I will talk that little bit later in details. This is the comparable figure we need to focus on. Basically all the other businesses like mentioned here, Marketing & Services, they improve and again the others improve. Making a positive impact on our overall comparable EBIT. If you look the next page just by business areas, again, if you just look this for the first time, you may be a little bit surprised at how can the profitability be half what it was last year 2019, fourth quarter? You have to take away the BTC impact full year 2018 and three quarters of 2019, and then you are seeing the comparable figures, basically how the figures come alive.
That's kind of the point that RP basically had roughly EUR 25 million lower profitability compared to Q1 2019. Then OP had this low reference margin in the background and then Marketing & Services and the others, again, they basically improved compared to 2019. If you put the next page, this is then, again, we wanted to little bit give you a feeling that how you compare these figures like I mentioned earlier. The Q4, you have to take away the 2018 and 2019 three quarters basically. BTCs come to this EUR 473 million and then EUR 380 million, meaning this EUR 93 million difference. If you look the big picture here, you have to think about the sales margin, why it is EUR 150 million lower, and that is coming from OP, EUR 95 million and EUR 25 million is coming from RP.
We had a positive distribution with the volumes mostly coming out of RP side. Again, now we are starting to see here the effect changes impact. In one quarter it was -EUR 51 million. We did a lot of things 2019 with our fixed cost, and you see here one quarter example, EUR 42 million lower compared to 2019. I think that is an example that, for example, OP’s impact was EUR 26 million. We basically did all these scenario thinking and actions in a very difficult year, what was needed, and landed EUR 380 million. Then one more slide, basically talking about the full year figures. The figures are getting bigger and the columns as well. Basically overall, if you just look the figures, we had basically EUR 546 million lower profitability.
If you want to focus on the things operationally, you need to focus on this EUR 1.8 billion and this EUR 1.4 billion, basically roughly EUR 400 million lower profitability in comp EBIT level. You have this one big ticket item there, sales margin. Talking about more than EUR 430 million lower sales margin. That is item coming out of OP reference margin, very negative compared to the 2019, but additional margin was very good. The comparison this year, EUR 350 million coming out of total refining margin and RP, then EUR 85 million. That is basically the negative thing between these years and then followed by the FX. FX was basically mostly coming out of quarter four, like I presented in the previous slide.
We have the positive things again, impacting the full year figures, talking about fixed cost, talking about the volume impact, talking about the thing also in the other segment in our operation. EUR 1.416 billion was the outcome of the full year, and I think that is an excellent achievement also in very difficult circumstances. I now leave the floor to Matti Lehmus, who will comment more on the renewable products 2020.
Thank you. Good afternoon also on my behalf. If I start with the first slide, commenting on the EBIT on the Renewable Products, I am very pleased that we continue to have a strong EBIT level of EUR 338 million in the fourth quarter. When you look at the chart, you can see that this was of course below Q4 2019 if you include the BTC, if we, like also our CFO explained, only take into account the BTC for the fourth quarter of 2019, it is only slightly below this number. The difference becomes EUR 25 million. I have to say for me, this reflects a strong operational performance in spite of the COVID-19 impacts on the business environment, in spite of an increasing feedstock price. I am very pleased with that.
The sales margin was at a very good level of $760 per ton. This is slightly lower than in the fourth quarter of previous year, which was $ 787, but it is stronger than what we had in the third quarter of 2020. Positive factors supporting the Q4 margin in spite of a continued tight feedstock market included hedging, market development, and sales performance. I will discuss this in a bit more detail. The sales volume was at a good level, stable level of 732 kilotons. This is 5% above last year's level, at a very similar level as in the previous quarter. It's worth noting that sales to North America increased to 34%, which reflects solid demand in the U.S. and continued market optimization. The production volume was 719 kilotons.
This again reflects a successful completion of our scheduled turnaround in Rotterdam, and otherwise very good utilization across our sites. I would comment that the feedstock optimization continued and the share of waste and residues inched up again to 87% in the fourth quarter, which is in line with our increasing longer-term trends and also reflects our efforts to continually expand waste and residue availability. Overall, a very good quarter. Briefly looking at the waterfall, and the comparison to last year's fourth quarter, this illustrates quite nicely that if we make the BTC readjustment, then you can see that the right comparison point is the EUR 363 million, and the key changes year-over-year is that the volumes were higher, which had a EUR 25 million positive impact, and at the same time, the sales margin was slightly lower, which had a -EUR 20 million .
The third main change is then the FX, like also CFO commented, which had a EUR 31 million impact versus last year because the U.S. dollar-euro rate was at $1.19 versus $1.11 a year ago. Let me then turn briefly to the feedstock markets. Waste and residue market dynamics were similar as in previous quarter, with a tight market following continued solid demand into both oleochemical and biofuels markets. The waste and residues price increase was, however, more moderate than for vegetable oils, which increased deeply in the fourth quarter. For example, quarterly animal fat prices increased by 7%, used cooking oil by 3%, whereas the quarterly crude palm oil price rallied by more than 20%.
I would also state that the key market driver in the fourth quarter was a rapidly strengthening vegetable oil market, and for example, crude palm oil prices increased by more than 20% during the quarter. The reason behind is a combination of production being impacted by heavy rainfalls, which is related to the La Niña weather phenomenon, and at the same time, solid demand for crude palm oil into, for example, India and China, which then contributed to the rapid price increase. It is also good to note that the crude palm oil market in 2021 is in backwardation, as there are expectations of a positive production development later in the year, supported actually by the recent rainfalls. Finally, I would comment on waste and residues that animal fats, used cooking oils, other waste and residues partially followed vegetable oil price trends, but the movements were less pronounced.
In practice, this means that the price differential between waste and residues and vegetable oils actually narrowed in the fourth quarter. Let me turn to the U.S. market and a few comments on some market developments there. First of all, the LCFS credit price in California continued to be on a high level and averaged $198, just a few dollars higher than in the previous quarter. The LCFS credit deficit continues to be balanced, even if short-term the demand for diesel and gasoline has been low due to COVID-19-related lockdown measures. In 2021, the carbon intensity reduction targets will be tightened again in California.
If you look at the RIN price development, it is interesting to note that in the fourth quarter, the D4 RINs clearly strengthened from $0.67 per gallon to $0.88 per gallon during the quarter, and have continued to increase actually in January to a level of roughly $1.10 per gallon currently. The RIN market values has responded to an increasing soybean oil price. Actually, if you look at the soybean methyl ester biofuel margins, they have actually been relatively stable. For renewable diesel, this RIN development has supported the development of U.S. margins in the fourth quarter. My final comments are on the sales margin, and like commented earlier, the sales margin was at a very good level of $760 per ton, slightly stronger than in the previous quarter.
I would say that the main factors affecting the sales margin development in the fourth quarter were, first of all, that the average feedstock price increased by approximately 5% versus the previous quarter. Like commented earlier, this is combination of, let's say animal fat, used cooking oils increasing more modestly and then vegetable oil prices like crude palm oil increasing considerably. At the same time, and that's the second factor, our hedging mitigated the feedstock price increase as the hedging ratio in the fourth quarter was approximately 40% of overall sales. This mitigated more than three quarters of the feedstock price increase. Finally, I would comment that the good sales performance and the market development compensated approximately half of the feedstock price increase. For example, the RIN appreciation had a positive impact. In addition, the sales mix optimization continued with increasing U.S. sales.
In general, I would note that the sales margin Q4 was also supported by good operational performance. For example, no unplanned shutdowns or similar events. Utilization reached 90% in spite of a one-month scheduled shutdown in Rotterdam. With these words, I hand over to my colleague, Marko Pekkola, who will discuss the Oil Products.
Thank you, Matti. I'll comment on the Oil Products fourth quarter, which was dominated by an exceptionally weak and oversupplied market. Comparable EBIT totaled out EUR 37 million, supported by additional margin and lower fixed costs. During the quarter, reference margin averaged at -$0.7 per barrel. Our sales volumes were 8% lower compared to the Q4 2019, reflecting lower demand continuance. Refinery utilization rates were adjusted down to 86%. Urals share was 63% on a lower level than normal due to mitigation actions for Urals differential being unfavorable for us. Moving on to the EBIT bridge between Q4 2020 and 2019. The impact of exceptionally weak product market and the narrow Urals Brent differential is very visible.
This resulted in refining margins trading mostly at negative values during the quarter, which had a -EUR 151 million on the comparable operating profit year-on-year. The weaker U.S. dollar had a -EUR 20 million. Main positive impact in Q4, EUR 56 million came from additional margin, which was supported by contango inventory profits and currency hedging. Positive impact of EUR 26 million came from successfully implemented short-term cost reduction measures. When having looked at on the markets, we could see the continued impact of COVID-19 pandemic on physical product demand and low margins in both diesel and gasoline during the quarter. Urals Brent differential was very narrow during the quarter, mainly due to OPEC+ production cuts impacts. Urals Brent differential averaged at slightly negative, -$0.1 per barrel for the quarter.
Brent crude oil prices recovered above $ 50 per barrel levels towards the end of the year. When taking a look on our margin performance, our total refining margin was low at $8.30 per barrel. However, it was supported by a strong additional margin of $9 per barrel when the reference margin for the quarter was negative. Refinery production costs were below last year's levels, mainly due to the successful implementation of short-term cost reduction measures. As already mentioned by Peter on the strategy execution, the restructuring of Oil Products is proceeding. The cooperation negotiations were completed during the quarter, and the closure of refinery operations in Naantali by the end of March this year, and transforming the Porvoo refinery operations to co-processing renewable and circular raw materials are proceeding as the main building blocks of Oil Products future success to continue solid cash generation.
We have also currently scheduled an approximately 12-week major turnaround at the Porvoo refinery the second quarter. With these comments, I would like to hand over to Panu to talk about marketing and sales.
Thank you, Marko. This is Panu Kopra speaking now. Q4 was good and solid in Marketing & Services. If we compare 2019- 2020 without Russian business contribution, we actually were able to improve more than 11% our result. If I just shortly comment still about last year market and market conditions out there, in the middle of March, we faced almost in all our segments, huge drop in demand. Gasoline, diesel, bunker, and Jet A-1 volumes were collapsed. After first shock, we started immediately to adjust our operations to meet new level of demand, we were able to cut our fixed cost a lot. In addition to lower fixed costs, the result was improved by excellent margin management. During Q4, we made decision to pilot EV charging for our B2B fleet customers.
We expanded our sustainable solutions offering by launch of Neste MY Non-Road Diesel in Finland. We continued network optimization. Actually, during last year, we were able to close more than 35 stations in Finland, which obviously improves competitiveness of our network even further in the future. During COVID time, our touchless mobile payment has got more users than ever before. It enables to have real online marketing with our customers. This is again, step ahead in our journey to more efficient, even more automated and customized marketing. We have expanded Neste MY availability now into 125 stations. Neste MY marketing strategy is ready for launch. The most important is that the customers are warmly welcoming Neste MY renewable diesel. This was shortly about Q4 and the last year in Marketing & Services. Handing over back to Peter.
Thank you, Panu. Let's now move on to the current topics. The very good progress in our strategy implementation has continued. The Singapore renewables capacity expansion project is proceeding well. The updated completion schedule targeting startup in Q1 2023 remains valid. We continue to take all precautions and follow the development of the COVID-19 situation in Singapore very closely. The feasibility study phase of the next renewables capacity expansion project in Europe is progressing well. The next step for decision-making will be to select the site, Porvoo or Rotterdam, during the first half of 2021. For clarity, this will not be the final investment decision, since such a decision is only made shortly before starting the construction. Several new contracts and partnerships have been made in the renewable aviation and renewable polymers and chemicals businesses during the year.
In the fourth quarter, we signed a sustainable aviation fuel supply agreement with ANA, All Nippon Airways, which was the first of its kind in Asia. We also acquired a minority equity stake in the AFS storage company to get access to the fuel delivery system at the Amsterdam Airport Schiphol. In renewable polymers and chemicals, we announced a strategic partnership with Royal DSM in November. We also launched Neste RE, 100% renewable and recycled raw material for plastics and chemicals production. There is a lot going on in the new businesses, and their traction continues good. Both are still in the market-making phase, though. As mentioned earlier, the cooperation negotiations to restructure the Oil Products were completed in the fourth quarter, and we are now implementing the decisions.
Substantial short-term cost reduction measures have been successfully implemented. We are well ahead to exceed our Neste Excellence program target to achieve at least EUR 225 million EBIT improvement by the end of 2022 compared to the year 2018 baseline. By the end of 2020, we have already improved by EUR 237 million. In the area of innovation, we acquired a minority stake in Alterra Energy at the very end of the year. Similarly to Recycling Technologies, in which we made an equity investment earlier, Alterra is an innovative plastic liquefaction technology provider. We're also getting more active and increasing our influence in the European hydrogen circles by co-chairing the European Clean Hydrogen Alliance and chairing the Finnish Hydrogen Cluster. As an example of growth with strategic research partners, a new catalyst development unit tailored for Neste needs has been started by VTT in Finland.
These are just some of the highlights I wanted to mention. As said before, we have a clear strategy and continue to move ahead. As an outlook for the first quarter, we see the following. Sales volumes for renewable diesel in the first quarter are expected to be on the same level as in the previous quarter. The waste and residue markets are anticipated to remain tight, and sales margin is expected to be lower than the very high level of the fourth quarter but to stay healthy. The margin will not be supported by similar hedging gains as in 2020, and the hedging rate is expected to be lower than normal in the first quarter. Utilization rates of our renewable production facilities are forecasted to remain high in the first quarter.
In the first quarter, Oil Products market demand will continue to be depressed and volatile due to several lockdowns as a result of the COVID-19 pandemic. The reference margin is expected to remain very low and volatile. The January average materialized at $0.1 per barrel. Refining operations at the Naantali refinery are planned to be closed by the end of March 2021. In Marketing & Services, the sales volumes and unit margins are expected to follow the previous year's seasonality pattern in the first quarter. Some negative impact on demand and sales volumes is anticipated due to the COVID-19 pandemic. On the next slide. Our strategic projects proceed as planned. We continue to prioritize everything else. Our cash out CapEx is estimated to be approximately EUR 1.2 billion in 2021. That is excluding M&A.
Regarding the renewable products, we have currently scheduled a 12-week major turnaround at the Porvoo refinery in the second quarter, which is estimated to have a negative impact of approximately -EUR 30 million on the comparable EBIT, mainly in the second quarter. We've also scheduled a seven week turnaround at the Singapore refinery in the third quarter, which is estimated to have a negative impact of approximately -EUR 80 million on the comparable EBIT. Additionally, we have scheduled a four week catalyst change at the Rotterdam refinery, and that will be in the fourth quarter, which is estimated to have a negative impact of approximately EUR 50 million on the comparable EBIT. In the Oil Products, the main operational event is the Porvoo major turnarounds, currently scheduled for 12 weeks in the second quarter.
It's estimated to have a negative impact of -EUR 110 million on the comparable Operating Profits. That is mainly in the second quarter. This concludes now our presentation. We would now be happy to take your questions.
Thank you. So ladies and gentlemen, as a reminder, if you would like to ask a question, please press star and one on your telephone keypad, and if you wish to cancel that request, please press the hash key. Your first question comes from the line of Nick Konstantakis at Exane. Please go ahead. Your line is now open.
Hey, guys, thank you for taking the questions. I would like to start on the dividend, please. Do you mind just reminding us what is the dividend policy and how you derive the number? I guess related to that, you have a very strong balance sheet. Why do you not keep it flat at the very least, I guess? Can we get an indication that you're saving some firepower for potentially a slightly higher deal? You've already been quite active in 2020. Secondly, look, we're heading into the publication of the annual report where we're going to get more visibility around the hedging. I was wondering if we could be a little impatient and you can tell us what was the overall hedging contribution in 2020 so we can understand a bit better the moving parts as we go into 2021. Thank you.
Yeah. Thanks, Nick. Good questions, of course, as expected. First question, the dividends. Maybe I start and Jyrki can add something to that. You know that our dividend policy has been 50% of comparable EPS, which is something that we have followed, also in the past. We simply followed the same dividend policy based upon the results that we made in 2020. If you do the calculation, that leads them into the EUR 0.80, as we have announced. Yeah. That doesn't give any indication. You know what the financial status of the company is. We did very good cash flow management, as I explained. We have a negative leverage. You also know that we are investing heavily in Singapore. We've done approximately 10 acquisitions or equity investments in company to strengthen our waste and residue upstream. We are careful in terms of our cash management.
That helped us to maneuver very well during the pandemic. Yeah, we are discussing, of course, not a final investment decision, but investments in sustainable aviation fuel in Rotterdam, investments in a world-scale facility in Porvoo or Rotterdam. It's quite a lot that is actually going on in our company. Nothing surprising to you, Jyrki.
Yeah, I think that is exactly like Peter was mentioning. We have the policy and then we are, of course, thinking about the coming years and the investment and following the strategic implementation that is very important for Neste as we go further. EUR 0.8 is a good, solid dividend.
Yeah. You also saw that our boards that have received the endorsement from the AGM to pay this extra dividend last year, the board did not doubt and it was also paid. If you look at the proposal that we are now making to the AGM and you combine that with this very high dividend payment in 2020 paid for the year 2019, of course, we're coming with a dividend payment of EUR 1.4 billion. This in an environment with a pandemic, I think that's a very good number. The second question on hedging, I give that to Matti.
Yes, thanks. The second question was on the hedging and its impact in 2020. First I'll just reiterate the logic of our hedging. We typically hedge around 40%-50% of our entire sales volume for the calendar year, which is also where we were in 2020. Our target is, of course, to reduce the margin volatility. Unfortunately, there are no perfect hedging instruments, so what we are typically doing is we are using vegetable oil instruments like, for example, palm oil being a liquid one, and we are using, on the other hand, oil product derivatives like, for example, gas oil, in order then to have at least a proxy hedge for our margin. We have, in a way, not been disclosing the exact impact of our hedging.
What I would highlight as a logic, typically when we have the visibility into our term contracts, that is the timing when we start doing the hedging for the following year. You basically have to see what the forward markets looked like in late 2019, and then compare it to how the market evolved. Of course, it's fair to say that, for example, the price differential between palm oil and gas oil did widen during the year 2020, so it had a substantial positive impact in 2020.
Again, Nick, I think all the analysts are extremely smart. You can do the back of the envelope calculation. If you look back at where Palm Oil versus Gas Oil was trading at the end of 2019, when we were building up these hedging positions to offset, say, potential risks in the term contracts with the guidance that Matti has given on the percentages. Then if you looked at how the Palm Oil versus Gas Oil was developing during the year 2020, you know what volumes that we have sold in 2020. I think you can do a relatively simple, let's say, calculation, volumes plus Palm Oil Gas Oil at the end of 2019, multiply with that and compare it to how Palm Oil Gas Oil has developed over 2020. That gives you a very good number. Again, let me express what we have said always.
It is always in the context of our term deals. We're trying to offset risk of the term deals with our hedging.
Very clear, guys. Thank you.
Thank you. Your next question comes from the line of Michael Alsford at Citigroup. Please go ahead.
Good afternoon. Thanks for taking my questions. I've got a couple, please. It was really just on the future expansion. You talk a bit about, Peter, that the feasibility studies are ongoing, and that you'll have a decision on the plant by the end of or during the first half of 2021. It seems to me that's a little bit of a delay to what you said previously. I was just wondering whether you could talk a little bit about that, and based on that timeline, when we should see, I guess, first production from that new capacity in the medium term. Secondly, just to quickly follow up on the hedging. As I say, Matti talked a bit about the fact that you will have lower volumes hedged in 2021. I was wondering whether you could just give a number on that.
Finally, just on the term sales, I think since we obviously last spoke on the 3Q call, the discussions were ongoing with customers. I was wondering whether you could maybe update as to how those discussions ended and whether you were able to pass through fully the higher feedstock prices that we're seeing in the market. Thank you.
Yeah, thanks a lot, Michael, for your questions. On the first one, nothing has changed. Just to be clear on that. Nothing has changed. We're proceeding extremely well on the feasibility engineering studies for the two locations, as said, Port of Rotterdam. We are intending to take the decision on the location, now we say first half of 2021. If you ask me, this is a six-month period. It's not my decision. At the end, it's a board decision. I expect that somewhere March, April, that decision will take place. It's irrelevant, let's say, on the progress that we are making on the studies for the two sites. Important is that the final investment decision will then come at the end of 2021 or just the beginning of 2022.
We are still working with the same target start updates, provided the board is taking the final investment decision, and that would be around the middle of 2025. Also there, nothing has changed. On the hedging, Matti?
Yeah, thanks for the question. Indeed, like we commented, the hedging ratio in the first quarter is a bit lower than this 40%-50% of total sales that we typically target. We are currently around 40% of total sales in the first quarter. That's where we are for the hedging in 2021. Your second question was around how the negotiations went. Obviously, it's something we cannot comment in detail, but I would just state that we are pleased with the outcome of the term deal negotiations. We have termed up roughly 75% of our volume for 2021. Also, of course, the negotiation about updating pricing, I would just state that we are quite pleased with the outcome of that negotiation.
The team, I agree. Matti, what you say. The team has done a very good job on the term deal negotiations, therefore we have agreed then to lock in 75% of the volumes. If we would not have been happy, of course, we would have gone for a lower percentage. Again, I come back, I mean to this Palm Oil-Gas Oil differential. If you just look at the numbers and how the numbers have moved during the last what days and weeks, I think it would be a wrong management decision to build up a very high hedging position, especially for the second half of the year, because we don't know where the floor will be in terms of the Palm Oil-Gas Oil differential. What is the new balance that will find?
Already if you look where Palm Oil-Gas Oil was at the end of last year, imagine if we would have taken up the same hedging position like we did in percentage of the term deals at the end of 2019 for the year 2020, we would have locked in at too high costs in our opinion. Does that help you a bit, Michael, in understanding?
Yeah, it does, Peter. Thank you. That's great. I'll hand it back. Thank you.
Thanks.
Thank you. Your next question comes from the line of Artem Beletski at SEB. Please go ahead. Your line is open.
Yes. Hi, this is Artem from SEB. Three questions from my side. Firstly, looking at the Renewable Products and fixed cost development in the segment. We have seen some pickup in Q4. What is roughly a ballpark what we should be expecting for this year? Is it a good proxy for the development in 2021? If I may continue on hedging side. Is it fair to say that basically, you have 40% hedges for the beginning of this year, so latter part of the year is at clearly lower levels, and it might change a lot depending on market conditions. The last one is relating to Oil Products and the very strong additional margin in Q4. How much of it has been helped by contango trades?
Should we basically assume that in Q1 development or early part of 2021, the level will be more normal, so to say, or closer to your target that you have at $4.8 per barrel?
Let's go. First question, Matti, on the fixed cost development.
Yeah, thanks for the question. On the fixed costs, indeed in the fourth quarter, we were again back at the more normal level that we already had in the first half of the year. I would just in general comment that we are of course preparing for the startup of the Singapore expansion. We have also other strategic projects. We do expect to continue having a slight increasing trend on the fixed cost. Of course, also, we have done a number of M&As, which means we also need to integrate these, which is also visible in our fixed cost. Some increase will likely occur also in 2021. On the other question around the hedging ratios beyond the first quarter, I would just comment, you are fully correct.
Our hedging ratio, especially for the second half of the year, is lower at the moment than in the first quarter. Probably somewhere around one quarter of the total sales for the full year.
The OP question?
Yeah, the strong additional margin for the Q4. Yeah, I think like I said, the contango profits were the one, then also the hedging was a result. Of course, depending on the market now. Now we are in the backwardation situation where the oil prices are increasing. Well, we have the ability to continue that, not expecting that to cover the full loss or the demand destruction in the refining margins in the first quarter or even largely in this year.
Okay, very clear. Thank you very much.
Thank you.
Thank you. Your next question comes from the line of Joshua Stone at Barclays. Please go ahead. Your line is open.
Hi, good afternoon. Thanks for the presentation. I've got a few follow-up questions. I'm afraid it's all on the renewable sales margin. For the first quarter, you said the margin to be healthy. If I look at consensus is at $670, would you say that's a healthy margin? Perhaps you could be a bit more specific of what you're thinking for the first quarter. You also made a comment that you thought that the Q4 margins would be difficult to replicate. Is that in reference to the first quarter or more generally? Do you think we're already seeing peak margins for this business? My third question is a bit tongue in cheek, but you had given margin guidance before and surpassed that number. What gives you the confidence, or why should we believe you this time around? Thank you.
Thanks a lot, Joshua, for your questions, and especially your last remark. Let me give to Matti first on the healthy of the sales margin.
Yeah. Thanks. Thanks for the question. Like we explained, I think if you look first of all at the fourth quarter where we came to this $760 per ton, that's of course a very good level. Like I said, there were a number of positive factors that we had in there, including also the hedging result. If you look into the first quarter, we have on one hand, of course, potentially a continued feedstock price increase. We don't have the hedging support. At the same time, we have renegotiated the term contract. There's different factors playing into it. We are not giving exact guidance what that healthy means, but I would just state if you look at the previous year's average, we had $702 in 2020. If you look at 2019, we were a bit higher. In 2018, we were at $670. All of these are healthy levels.
To your second question, Joshua.
Yes. The second question was about the comment that the Q4 margin is difficult to replicate. Of course, looking at the Q1, like we have clearly said, there are clear drivers why we also said very clearly that we expect the margin to be lower than in the fourth quarter where we had a number of positive drivers, including the very positive hedging result.
I hope you believe us, Joshua.
Fair enough. I guess on my second question, the point more broadly, is this a business where margins can still expand as you build out capacity, do you think?
Well, of course, it's a very good question, Joshua, but also very difficult to give any guidance on this. It's a bit back to what Matti said. If you look at 2018, 2019, 2020, the average sales margins that we had, the way we consider that, they are very healthy margins for the kind of a business that we are in. We are definitely focusing our business, as I have said in previous calls as well, in not overstretching the limits as well. This is a growth market that we are in, and we are investing heavily in that growth. We want to capture that growth both in road transportation, aviation, and renewable polymers and chemicals. You don't want to run this business also as a pure commodity business that, okay, because now there is maybe a shortness in the market, then you overstretch it.
On the other hand side, you want to build up a very good, sustainable business relationship with your customers. That's one point. The other point is, if you zoom in into European region, there are also penalty levels. I think I mentioned at a previous calls as well. The customer can always make a choice. Do I pay the penalty? Of course, that has a negative reputation effect if they would do so. It also shows a bit that there is a ceiling in terms of sales prices. As we have moved to having different geographic markets that we are now supplying, and then over the next couple of years continue to develop aviation polymers and chemicals, we will have more optionality in how and where to position our products so that we can optimize our margins.
Great. Thank you for the insight. Thank you.
The next question comes from the line of Erwan Kerouredan at RBC. Please go ahead. Your line is open.
Hi. Thanks for taking my question. Two, please. On the future renewables capacity plant in Europe, we understand that location will be disclosed in around March, April. I guess, can you just remind us what are the key criteria in selecting the site? This is my first question. Criteria, whether it be financial, operational, anything like that. Second question on the U.S. The RIN obviously support the development of U.S. margin. Do you expect this to continue? Obviously, in the headline, the Biden administration seems to be very renewable fuels friendly. In the meantime, there's additional supply coming to the market. I guess, I'd just like to have what's your sense of the next few months in terms of LCFS and RINs and the global market and overall market in the U.S. Thank you.
Matti?
Yeah. Thank you for the question. First on the criteria for the future renewables site in Europe. I would say this is a very typical one where we would compare both technical, commercial, and strategic criteria. Of course, very important one is, for example, what we expect the capital expenditure level to be in the different sites. Another one that is, of course, important is what we expect the operating cost structure to be in both site locations. Thirdly, we would obviously look at feedstock access, market proximity, market outlook. It's a combination of all these factors really that we would look at. I would say very typical technical commercial evaluation like we have also done in the past when we have made these decisions.
On the RINs, I would say in general that it's of course something where the RIN mechanism is also linked to the Renewable Fuel Standard in the U.S. Of course, what we are looking at when we look in the future is what kind of renewable volume obligations will be set. This is something then probably to happen in springtime. Of course, another one interesting to watch is also to what extent there will be this kind of small refinery exemptions. The expectation may be that there are perhaps less than in the past, that there's a more stringent approach to this one. In general, these are the type of factors that we continue following, and they will then, alongside the development of the soybean oil market and the heating oil markets, influence the RIN going forward.
We agree, Erwan, also to your remark and your observation that with the Biden administration, there has been quite some movement already in such an early phase in the U.S. We see very good development in discussions in Washington state and New Mexico, New York, even Massachusetts. There is a good atmosphere, good developments. In addition to that, also on the aviation side, early discussions ongoing on incentives on a federal level for aviation. Of course, that will all not come into the implementation phase in 2021. For us, it's important that this development continues and then leads them into new regulations that were enforced, let’s say 2022, 2023, and beyond.
Okay, thanks so much. That's very helpful.
Thank you. Your next question comes from the line of Henri Patricot at UBS. Please go ahead.
Yes. Hello, everyone. Thank you for the data. Two questions, please. The first one is going back to the comments you made on the higher share of long-term contracts in renewable products. I was wondering to what extent this reflects a stronger demand for renewable diesel this year. I believe you were last talking about demand growth of two million tons for this year. Has this changed materially? Is it higher than you expected previously? Then secondly, I'm just looking at Europe, specifically in discussions around sustainable aviation fuel mandates and perhaps some changes to RED II, and the higher targets there. Where do you see this policy going? Could we see a mandate for sustainable aviation fuel, in particular in Europe and in the future? Thank you.
Let me give the first question to Matti.
Thank you, Henri. Perhaps, on the general demand outlook for renewable diesel for 2021, I would still see it very similarly like we commented in previous quarters. Obviously, giving an exact number will also depend on how exactly the COVID situation unfolds. In general, we would expect that a level of roughly two million ton demand growth globally could well result if you look at the regulatory mandate updates that have already been made. If I take a couple of examples of decisions that have already been taken, of course, for example, in California, the carbon intensity target will be increased in 2021. I think it's a level of 9.25%. Also in Europe, we have a number of countries that are going to increase their mandates in 2021.
Just to give a few examples, there would be, for example, Norway that is moving up from 20%- 24.5%. Sweden is increasing its GHG reduction target from 21%- 26%. Italy is going from 9%- 10%, U.K. from 9.25%- 10.1%. This is basically how we come to these estimates.
Globally.
Globally reflects our best estimate at the moment.
Which would mean in a market that we estimate moving from six million tons to eight million tons in 2021. On the SAF, sustainable aviation fuel mandates, there is lots of discussions currently ongoing in the European Commission. There have been some countries that have made some very good movements. The Swedish government is introducing a legislation on a SAF mandate that would start around the middle of 2021. Still has to have the final dot, let's say, the parliament. The ruling parties have agreed upon that. It's, of course, also in Finland on the table. The Netherlands is having this up to 14% or a minimum of 14% in 2030. France has also introduced a mandate. That will go up to 5% in 2030. Stay tuned how the discussions on a European Commission level will proceed in 2021.
We are, of course, very close to those discussions and very deeply involved in those discussions. I'm quite positive that we'll see something happening in terms of mandates on a European level. On the RED II, RED II is very clear that in order to achieve the GHG emission reduction of at least 55% by 2030, that RED II is on the list of regulations to be opened. It has been opened and currently discussions are ongoing. This could eventually lead, who knows, to what I would call a RED III. RED II is enforceable as of the middle of this year. If you look at these timelines in getting all the approvals and public consultation, et cetera, then probably that this so-called, what I call RED III, this is my name now, would then have to be implemented somewhere around 2025.
Currently, road transportation RED II, as you know, is 14% by 2030. We hear numbers that are going around, let's say 20%-24% is what we currently hear as the new numbers then for the future.
Very cool. Thank you.
Thank you. Your next question comes from the line of Sasikanth Chilukuru at Morgan Stanley. Please go ahead. Your line is open.
Hi. Thanks for taking my questions. I had two, please. The first was regarding the investment of sustainable aviation fuel facility in the Rotterdam refinery. Just wondering if there is a timeline by which we could expect the decision for this project to go ahead. If there's any indication of what the investment levels would be for this project, and whether this can actually go ahead in conjunction with an expansion project, should you proceed to do it in the Rotterdam site. Any comments on that would be helpful. The second question I had was related to the CapEx guidance for 2021. It would be helpful if you could provide a split of the EUR 1.2 billion CapEx between the segments, and also let us know how much of that is related to the Singapore expansion project.
Also, if you could provide us how much of the EUR 1.5 billion CapEx related to this expansion project would be left after 2021.
Okay, let's go, Matti, to the first question.
Yeah. For this investment into sustainable aviation fuel capability at our Rotterdam refinery, the engineering work is progressing very well. We are still targeting here clearly that the startup could be in 2023, and that already answers your question that we see it as a separate project from the NEXBTL capacity expansion project in Europe. The timeline is different. We will, of course, see when, I don't have an exact timeline for the decision-making on this one, but let's say we are trying to create the maturity of the engineering so that after the mid of this year, we would have that capability to look at it.
Adding to what Matti said, the SAF investment in Rotterdam project has nothing directly to do with the European world scale facility. What we are focusing upon is that in the existing facility in Rotterdam, we're building up the same optionality as we have at, let's say, in the new facility that we're building up in Singapore, so that today we can serve from the Rotterdam facility, the road transportation market with renewable diesel and polymers and chemicals with biopropane, as well as with renewable hydrocarbons. We cannot from Rotterdam serve the aviation industry with the on-spec sustainable aviation fuel. Separate from that, we have then the 1.3 million ton, let's say, facility that is either Porvoo or Rotterdam, which also would have, of course, the optionality to produce sustainable aviation fuel.
We would then be able to continue to grow in the capacity of sustainable aviation fuel. Timeline, I would expect that we take a decision on that during the course of this year, towards the end of 2021 on the sustainable aviation fuel flexibilization of the Rotterdam facility. On the CapEx guidance split, it's clear that on the EUR 1.2 billion, as we have the turnaround 2021, that is a very important part of that. If you look at the Singapore facility, we are ramping up now. We have about 3,000 construction workers at the site. We will ramp up during this year to, let's say, a bit above 5,000 people. This is a heavy phase that we are in in 2021. Pretty much all the engineering work has been done. All the procurements proceeded very well. Lots of material we have already in Singapore.
The vast majority of the material is in the laydown area. It's now really all about constructing. The building up, and installing, do all the steel work, the reactors, the DCS systems and so on. That will be an important part, of course, of the EUR 1.2 billion spending that we have. One could say, I would say, I don't have the exact numbers now in front of me, and I'm looking at the same time at Jyrki, probably around, what, EUR 800 million during this year is on the turnarounds 2021 plus, then the Singapore investments of the EUR 1.2 billion. Round number. The part that would be remaining in 2022 on the Singapore investments.
Overall renewable products is more than EUR 600 million.
Yeah.
Oil Products a little bit more than EUR 400 million. The rest is basically talking about common function and the other basically strategic CapEx, where we land to the roughly EUR 1.2 billion.
That said, it's even more than the EUR 800 million I just said, that is, going towards TA 2021 and Porvoo, and then the Singapore facility. Then remaining on the Singapore facility in 2022 is I would say somewhere around EUR 200 million-EUR 300 million CapEx.
Great. Thank you very much.
Thank you. Your next question comes from the line of Thomas Adolff at Credit Suisse. Please go ahead.
Good afternoon. I've got a few questions as well, please. I do apologize. One of them is on the dividend. Just wanted to clarify the exact wording of your policy. You said 50% payout. Just reading on your website, it says at least 50%. Can you just confirm it's 50% and not at least? The second question is just going back to the hedging again. You said 40% in the first quarter, a bit less than 2Q, roughly 25% in the second half of 2021. Is it fair to say that these hedges were put into place once the term contracts had been finalized at the end of 2020? Essentially, those volumes have been locked at a less attractive spread, if you will.
Then gradually as the year progresses and as you see what happens with gasoline and palm oil prices, you may place additional hedges perhaps on more favorable spreads, should they materialize. My final question, just I do apologize, the third question. Obviously, a maintenance-heavy year, and it was also maintenance heavy last year. Is it fair to say that the only difference this year versus last year, in terms of cost, is the Singapore turnaround? Instead of just incurring the cost for the catalyst change, typically around EUR 50 million, you have an additional EUR 30 million for the additional work. Thank you.
Thanks a lot, Thomas. Absolutely you're right. The policy is reading minimum 50%. Yeah. 50% is minimum. We have always applied that 50%, at least as long as I could look back.
Yeah.
As I have a history in the company, we have applied that 50%. Exactly.
50%.
Yeah. Jyrki is nodding and confirming that. Some more information on the hedging and the spreads.
Yeah, just a brief comment. Indeed, what we said earlier also in the Q1, the hedging ratio is currently around 40% of our total sales. It is actually that comment I made that it's roughly one quarter reflects for the whole year on average. I would say the timing is a bit a sliding one. We typically start putting in the hedges when we have visibility into our term contracts, but then it's of course, also something that we do gradually over time. The logic that you referred to is exactly correct, that it's of course something also depending on the development of the Porvoo that we can then decide when and how to ramp up the hedging ratio. I would make some comments on your third question, which is on the maintenance.
Indeed, fully agree that also, of course, in 2020, we have had a number of scheduled turnarounds for the catalyst changes, for example. The main difference is indeed, I would take two things. In Singapore, it's not only a catalyst change, it's a bit longer turnaround of seven weeks. This is, of course, also related in order to prepare for the upcoming integration of the new site. It's important we have that major turnaround. Also, I know that in Porvoo, of course, it's a longer turnaround because it's also a major turnaround that takes place every five years.
Perfect. Thank you very much.
Your next question comes from the line of Monika Rajoria at Société Générale. Please go ahead. Your line is open.
Thank you so much. I'll have two questions, please. The first one is on the seven-week Singapore turnaround. I would like to understand what exactly goes into it, and in very crude terms, would it lead to any capacity increase in this year itself? My second question would be on your U.S. sales area. I would like to understand that we have seen the parameters strongly improving in the last few, you could say, weeks of 2020. Would that change your thinking around the U.S. sales area a bit? Can we see more sales to that area? Also, any comments that you would like to make on the competition that's heating up over there? How would you characterize it? How would you see it? That's all. Thank you.
Matti, if you take the seven-week Singapore turnarounds.
Yes. Thanks for the question. As it's a major turnaround in Singapore, I would just high-level comment. Of course, it does include a catalyst change that is normal. In addition, we also typically during these more major turnarounds do equipment inspections and overhauls. That's also a typical part of it. Like I mentioned, it's also important here we, of course, have the opportunity now to prepare for the tie-ins for the upcoming refinery expansion. These are main elements that are done during the seven weeks.
Well, we've done in the capacity increase, if you refer to creep capacity, we promised 500,000 tons at the end of 2018. We've delivered on the 500,000 tons. That means the potential that we have on capacity increase through capacity in the existing facilities for renewable products is almost nothing, let's say very limited. That does not mean that we continue with our Neste Excellence program and the specialists to find pockets where we could eventually increase our capacity further, 10,000 tons here, 10,000 tons there. That will continue to be. Nothing that we can now guide towards, and that is not immediately related to the seven week Singapore turnarounds. On the U.S. sales parameters, as we have done in the past, Monika, we continue to look at the different markets, build up that optionality that we can serve these different markets.
We have very good positions in the United States and also in Canada, where we are selling our products. We always look at the different parameters. We have our central team that looks at, on one hand side, the costs for the different waste and residues, so we optimize that. On the other hand side, we look at the different geographic markets. Also there, we optimize so that we can maximize, of course, our margins. If there would be, to answer your question, a favorable situation in the United States, yes, we may then decide, to steer more volumes to the United States. That's why also we are not always terming up all the volumes that we have available so that we have the freedom, let's say, to maneuver, and optimize our volume/margins.
Competition in the United States, yes, of course, there are these announcements. A number of these announcements will start producing. Some of them have had a bit of a delay. Not all the announcements will get the financial funding. The well-established players are proceeding, that capacity will gradually become available in the market. As we also said, and Matti alluded to, the market is also growing. The market needs also more capacity. Matti already said that the target in California moves up from 7.5%- 8.25% 2020- 2021, and is moving up to 20% in 2030. Oregon is moving from 2.5%-3.5% CI reduction. British Columbia is moving from 10%-11% in 2020- 2021. These are all pockets. As we have said, global RD demands, renewable diesel demand is, in our estimations, moving from six million tons to eight million tons in 2021.
Great. Thank you. Very clear.
Thank you. Your next question comes from the line of Iiris Theman at Carnegie. Please go ahead. Your line is open.
Hello. Thanks for taking my questions. I have three questions, if I still may. The first one, do you expect North American volumes to be higher this year given the strong demand, especially from California? Then secondly, do you think that vaccines could improve the supply of waste feedstock as restaurants and hotels, et cetera, would open more widely, potentially later this year? The last one is related to the same topic. There are a lot of concerns that the renewable diesel growth would be challenged by insufficient feedstock availability. What is your view on that? Do you still expect demand supply to be fairly balanced in 2025? Thank you.
Matti, if you take.
Yeah. Happy to. Thank you, Iiris, for the question. First of one, on North America, I would be along the same lines that Peter commented on the previous question. We, of course, continuously adapt our market mix, especially having some spot sales opportunities. You could see, for example, the third quarter, the share to North America was 28%, and then it moved up to 34% in the fourth quarter. I think it's a good example of how we try to optimize the geographic mix also of our sales. On the waste and residues, I think it's a very good question.
Commenting specifically on the used cooking oils that you were commenting on, I would comment that it's clear that if you look at the fourth quarter, for example, that, for example, in Europe, where we had clearly tight lockdowns and tightening lockdowns, also some other countries like Malaysia would be an example. This, of course, has also then an impact on used cooking oil because of the restaurant activity. I think in that sense, it is one where hopefully, of course, the vaccines will help, and we will get back to a normal situation also in these regions where the lockdowns have had a clear impact. Of course, the risk is also to the other side, that we have continued lockdowns. The used cooking oil, there also it's worth noting that, for example, in North America, the availability has improved in the second half of last year.
There, the situation has been quite good already. If I comment in general on the feedstock availability, that was your third question. I think it's clearly an area that also in our strategy, we put a lot of strategic emphasis on to continuously grow the availability of waste and residues. It's a combination of improving the aggregation in existing markets, opening new markets, and then at the same time moving towards enabling better and better pretreatment, and hence also lower qualities. In that sense, we also see the availability of waste and residues gradually improving. What we have said long-term is we believe the availability will grow to around 35 million tons by 2030. Of course, on top of that, there is development work on totally new types of feedstock sources like algae oils, or it could be novel vegetable oils.
This is something that happens continually and, of course, will also then take time for some of the new technology sources.
Okay. Thank you. Very helpful.
Thank you. Your next question comes from the line of Peter Low at Redburn. Please go ahead. Your line is open.
Oh, hi. Thanks. Yeah. Your CapEx guidance is excluding M&A, and you said you're still looking at further deals. Can you give us an indication of what you're looking to add to your capability? Is it mainly on the feedstock side? Just secondly, on refining, you posted a profit in what must have been one of the most challenging years for the industry ever. r.
Peter, thanks for your questions. To your first question, yes, absolutely. What we said is the CapEx does not include M&A. You have seen that we follow up on our strategy as we communicated during the capital markets day. We focused a lot on reinforcing the upstream side. Expanding, let's say, our leading position that we have there. We did the Mahoney acquisition and already one bolt-on acquisition to Mahoney.
In terms of pretreatment with the Bunge acquisition, that is expected to close in Q1 this year. Here and there, some terminals that we have bought. You may expect that we continue to look for opportunities of bolt-on acquisitions in that regard. You've seen us making a couple of equity investments in building up our technology leadership position on the chemical recycling of waste plastics. These are areas that we continue to look in. The other areas that I would refer to is on the innovation business platforms, where we continue to monitor what technology do we need in order to also build up these platforms over the next 5-10 years. Nothing concrete, I would say, that is now for directly 2021.
As we are, of course, doing these activities and M&A, then we will, of course, communicate them. We're not doing, let's say, any M&As where it really doesn't fit into the strategy that we have communicated on the Capital Markets Day. These deals, to get access to the airports, they are important strategically, like the one that we did in Schiphol, Amsterdam Airport. We continue to look at a couple of other things. They are not, let's say, hugely expensive. It's just taking parts. If it is organized through a joint venture, like in a couple of airports, especially in Europe, then it's just making sure that we are part of these joint ventures. This is not double-digit million EUR investments that we are talking about. Closure of capacities, here you're referring to the oil refinery part of the business.
Very clear answer from my side. Negatively surprised. You know that with our refinery in Finland, we are having one of the best net cash margins in Europe. If you look at the conditions of last year, if that continues, let's say, in 2022, there is 60%-80% of refineries that have a negative net cash margin. Still, if you relate that to how many announcements on closures are there, it's simply not sufficient. Capacity needs to be taken out of the market. Thank you.
Your next question comes from the line of Mehdi Ennebati from Bank of America.
Hi. Good afternoon, everybody. Thanks for taking my question. Two questions, if I may. First one, excuse me if you already answered it. Can you guide us on the sales volumes from the Renewables Platform in 2021? If I remember well, CFO reported this in December that it should be in line with 2020. Can you confirm that, please? Another question regarding the impact from the maintenance at Porvoo Refinery. You expect an impact of EUR 180 million or EUR 110 million. I just wanted to know what refining margin level did you use to get to that EUR 110 million, because it looks relatively high or relatively close to the last year, let's say, turnaround impact, which we are expecting to be EUR 180 million, and which finally did not happen. Thank you.
Thank you, Mehdi. This is Matti. I can take the first question on the renewable product sales volume. Like we commented on the turnaround activity in 2021, you can see that it's a bit higher than what we had in 2020. It was special, like it was asked earlier, that Singapore turnaround is a bit longer because it's a major turnaround, and the same goes for Porvoo. At the same time, we, of course, continue to do continuous improvements, look for all opportunities to maximize the production. I would say overall, it's probably a good target that it would be obvious roughly at the same level, if we can make up for those longer turnarounds.
Matti, if I may a follow-up there. If the sales volumes are roughly at the same level, given that you expect roughly the same kind of impact at the EBIT level than the normal maintenance, should we then consider that you expect your renewable product margin in 2021 to be roughly at the same level than 2020? If you were expecting lower renewable product margin, the impact at the EBIT level from the maintenance would have been lower.
Yeah, I think it's high level estimates. We haven't looked at it from that angle.
If I may comment on the volumes. It will depend, of course, on these shutdowns that we have. We need to get the facilities up and running on time. We have always had a very good track record on that. Matti, there's a lot of technical work that needs to happen on these 12 weeks in Porvoo and seven weeks in Singapore. There's not the simple catalyst change, which is not simple either. If I remember, the last one that we did in Rotterdam with heavy winds, was not simple either. That's one element. Will we be on time in starting up? The second element is, of course, as we will have lesser available capacity to keep the same sales volumes like last year, we will need to make a couple of improvements in terms of creep capacity.
Otherwise, you just do the math, it doesn't add up. We are losing capacity, 12 weeks of the two lines, 400,000 tons in Porvoo. You can do the math what 12 weeks means in terms of capacity loss. In Singapore, it's seven weeks, it's not a four a week, but it's a seven-week, there's three weeks additional, compared to a normal catalyst change. If we want to have the same volumes, we will have to find some pockets in creep capacity, which is not clear yet, as I already mentioned, if we will find these things, in addition to the half a million tons that we already did. To your second question on the Porvoo maintenance impact for the Oil Products business, the - EUR 110 million, you asked on what reference margin did we base that calculation? Good question. Marko?
Yeah, Marko here. I can then answer. Now the forward margins for the time when we are estimating, they were trading around $2.22, between $2 and $2.2. That's the volume or the number what we have used for the EUR 110 million.
Thank you very much.
Comparing to 2020, of course, then they were trading higher levels.
Yeah. All right. Thank you very much, fellas.
Yeah.
Your next question comes from the line of Pasi Väisänen from Nordea Bank. Please go ahead. Your line is open.
Great. Thanks. This is Pasi from Nordea. When looking at a bit further away, are you only looking at these new fat-based raw material pools, or is there any chance that your new plants or units in next 10 years period would be actually using some another raw material than fats? Secondly, do you see that these synthetic traffic fuels, which are actually now on topic, is a kind of a threat for your business model going forward? If so, in what period? Maybe lastly, just to cross-check, did you say that the $700 per ton would be a healthy margin for renewable diesel going forward? Thanks.
Thanks, Pasi. Thanks for your questions also. Let me differentiate, first of all, looking at our NEXBTL technology that we have. Here we're looking, as you know, to lower and lower qualities of waste and residues, and we are enhancing the pool. It continues to be, chemically spoken, a pool of fatty acids that fit with the technology. We're also looking, as you know, into this innovation business platform on algae technologies. We've done some work in our technology departments and the waste that comes out of cultivating algae. You're cultivating algae, you get very good sustainable proteins, approximately 80%, and then approximately 20% is an algae oil that you cannot use for food consumption, so it's a waste. That can be used, and we are quite confident that it would also fit into our NEXBTL technology.
We don't need a separate process technology to work with that. That all belongs to the expansion of that waste and residue pool that will drive, let's say, the continuous growth, Singapore investments, and eventually also if we invest in Europe on the next line and whatever may come next. Of course, we also look very intensively in our innovation business platforms at other sources of renewable carbon. These may be sources that come out of municipal solid waste. We talked about chemical recycling, so waste plastic, and as you know, also ligno cellulosics. These are early stage, of course, development platforms that we have. I would, of course, not exclude that would add to the pie. Otherwise, if we don't believe in that, we would not already start looking at those technologies in our innovation business platforms.
It relates also a bit to your synthetic fuels question. We also have an innovation business platform called Power-to-X. Here the source of renewable carbon may be air capture, may be CO2 out of fuel mills or others, but it's a CO2 source. Here we work closely together. We have done an equity investment in this German company, Sunfire, which is what we believe leader in a novel electrolysis technology, solid oxide technology. We have, with the support of the European Commission, a first renewable hydrogen project ongoing in Rotterdam. Out of that electrolysis, what do you get? You split up water, you get green hydrogen, and you combine then the green hydrogen, with the CO2.
Here we are doing the first step, and that green hydrogen would then go and we would use it for the NEXBTL plant that we have, the existing one that we have in Rotterdam. It's still semi-scale. There is a bit of a hype around these synthetic fuels. One needs to take into consideration that for synthetic fuels, if you want to produce one million tons of fuel, you need around 4 GW in electricity based upon the current technologies that are available. That leads to the fact that if you want to have in sustainable aviation fuel, if you compare it to the HEFA technology, so our technology that we are applying, then for that power-to-liquids, you're approximately 5x- 6x times more expensive than the HEFA technology. My point is, we believe it will add. It will take time.
Here we are looking at a time horizon where it will start making any difference 10-15 years down the road. Then if you look at the complete pie, and that's why we are saying that there is no limitation in the availability of waste and residue. There is sufficient renewable carbon on the planet to continue to grow. You have the NEXBTL technology that continues to grow over the next decades. 35 million tons we have identified of these waste and residues leading to approximately 30 million tons of capacity in the world, leveraging upon these waste and residues. Then you will get additional waste that will add with new sources of renewable carbon. If it is municipal solid waste, ligno cellulosics, or as I said, power-to-liquids, over three years, five years, 10 years, 15 years down the road.
Will they replace HEFA technology? I don't believe so, because the HEFA technology, compared to these other technologies, has a substantial CapEx and OpEx, a cost advantage. It's up to these other technologies to be able, through scalability and technology development, to close those gaps. I hope that gives a bit of a picture. Of course, in September when we have our capital markets day, we will definitely talk a little bit more about that. Because it is strategically very important, for the further development of our company. Not short term, but really mid to long and very long term. As we said, healthy margins, we refer to also at $670 per ton in 2018 being a healthy margin. Pasi.
Oh, okay. That was all from my side, and very helpful. Thanks.
Thank you.
There are no further questions at this time. Please go ahead.
Okay. Thank you very much. As usual, a long list and very good questions, of course. Thank you very much, [Amin], for your active participation in this call. I would like to conclude, of course, and repeating again by saying that the high uncertainty related to the future development of the COVID-19 pandemic and its impact on the global economy continues. The Renewable Products business has proven to be very resilient in growing global markets. We answered your questions on that, hopefully. It's good to remember, though, that this year our results are not expected to be supported by similar extraordinary margin hedging gains as in 2020. Please keep that in mind as well. Oil Products continues to be in a very challenging market situation, and that does not seem to correct itself soon. Stay tuned there.
It's, for us, going to be quite intensive amount of work, whilst we are implementing, of course, also this restructuring in Oil Products. We will continue to focus on Oil Products on the own actions that we can take, to ensure that on a short and long term, we have a good cash generation coming out of that business. The market challenges have not disappeared, but we remain confident about our ability to tackle them. Let me maybe again repeat, I did that also during the last quarterly call that we had. This 2021 will be a rather exceptional year for us in terms of quite a lot of technical maintenance work. The Porvoo, if you add the impact RP and OP, 12 weeks shut down Q2, EUR 140 million impacts.
Singapore, catalyst change, a complete shutdown, seven weeks, starting with the tie-ins of the new facility, Q3, EUR 80 million impacts. The Rotterdam four-week shutdown at the end of the year, Q4, which, as you know, normally has a EUR 50 million impact. If you add up EUR 110 million impact in OP in Porvoo and EUR 160 million impact in RP, we're talking about an impact of EUR 270 million, due to these exceptional shutdowns that we have during 2021. With this, thank you very much for your continuous interest in our company, and of course, stay safe and overall healthy. Thank you. Bye-bye.