Citing a continued decline in demand for fossil oil products and a growing share of renewable energy solutions, the Finnish oil refining and marketing company says it is exploring the shutdown of its refinery operations in Naantali.
Additionally, Neste says it is seeking to transform its Porvoo refinery operations to co-processing renewable and circular raw materials to āensure the competitivenessā of its oil products business.
If implemented, the plans would mean up to 470 redundancies, including possible outsourcing, the company said.
Neste said that the COVID-19 pandemic had āsubstantially accelerated the decline in demand for oil productsā and noted that it was ānot expected to recover to previous levelsā. Accordingly, the company said āfundamental changesā were needed to secure the competitiveness of its oil products business and that the planned measures were aimed at improving its productivity, resource efficiency and adaptiveness to market changes.
āThe 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,ā said Nesteās President and CEO, Peter Vanacker.
āAlthough 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 productsā competitiveness.ā
To initiate the transformation, the company will start cooperation negotiations in the oil products business unit and its supporting functions in Finland. The planned changes are expected to result in annual fixed cost savings of approximately ā¬50 million.
Vanacker continued: āNesteās ambition is to become a global leader in renewable and circular solutions, and to 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.ā