Neste to shut refinery in Finland as demand for oil plummets

Finnish biofuel producer and oil refiner Neste has concluded ‘co-operation negotiations’ with respect to the restructuring of its refinery operations in the Porvoo and Naantali regions of Finland.

The Finnish firm confirmed that it would shut down its refinery operations in Naantali by the end of March next year.

Neste first announced the restructuring of the refinery operations in September.

The company said it would now focus on the terminal and harbour operations at the Naantali site and renew its ‘oil products’ operating model.

Under the second transformation phase, the company will transform the Porvoo refinery operations towards ‘co-processing’ renewable, as well as circular raw materials.

According to Neste, these measures are expected to cost about €50m ($59.8m).

Neste president and CEO Peter Vanacker said: “We want to improve our competitiveness and maintain refining operations and related strategic capabilities in Finland. The 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.

“Neste’s story began in Naantali, so I understand that this news might be difficult to receive. Over the years, our Naantali people have shown tremendous cooperation and innovation skills in many difficult situations, and we can be proud of that, but now we are in a situation where we do not have any other options.”

Neste believes that demand for renewable energy solutions will grow in the future, but added that the pandemic situation had ‘substantially accelerated’ the decline in oil products demand.

The company confirmed that the closing of the Naantali refining operations would not affect the country’s fuel distribution supply security.

However, the refinery shutdown and the ‘oil products’ operating model renewal will see about 370 redundancies.

The company earlier estimated that the restructuring plans would lead to nearly 470 redundancies, including possible outsourcing.

The number of final job cuts was reduced during cooperation negotiations between the company and the employee representatives.

In August, Neste signed an agreement with Air bp to provide an increased amount of SAF to airport customers this and next year.