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Finnish biofuel producer and oil refiner Neste is planning to restructure its refinery operations in the Porvoo and Naantali regions of Finland.
The company said it is exploring the shutdown of its refinery operations in Naantali and said it will rather focus on the terminal and harbour operations at the Naantali site.
It will also transform the Porvoo refinery operations to ‘co-processing’ renewable and circular raw materials.
Neste president and CEO Peter Vanacker said: “The energy transition is proceeding faster than expected. The forthcoming operating and maintenance investments in the Naantali refinery are not viable nor sustainable in a situation where there is large over-capacity for oil refining globally.
“Although the time is not optimal, and this news is unfortunate for many of us, the planned actions to develop our refinery operations are urgently needed to maintain operations and strategic capabilities in refining in Finland and to secure Oil Products’ competitiveness.”
In July, Neste said it had delayed the expansion of its Singapore refinery from the middle of 2022 to Q1-2023 because of the coronavirus (Covid-19) pandemic, Reuters reported.
Neste, which has invested heavily in renewables, said it continued to believe renewable energy solutions would grow in the future, but added that the pandemic situation had ‘substantially accelerated’ the decline in demand for fossil oil products.
Vanacker added: “Neste’s ambition is to become a global leader in renewable and circular solutions, and achieve carbon-neutral production by 2035.
“The planned changes will support the transformation of the Porvoo refinery into a leading sustainable, safe and efficient refinery, enabled by our highly innovative and efficient Neste people.”
According to Reuters, the company also reportedly plans to cut up to 470 jobs in Finland to seek €50m ($59m) of savings due to declining demand for fossil oil products as a result of the coronavirus crisis.
Last month, Neste signed an agreement with Air bp to provide an increased amount of SAF to airport customers this year and next year.