The planned cuts are expected to save about €50 million annually.
Neste Oyj is planning to shut down its refinery operations in Naantali. In addition, their Porvoo refinery would focus on co-processing renewable and circular raw materials.
The Finnish oil refining and marketing company that has operations in 14 countries and employs over 4,400 people—and is the largest producer of renewable diesel in the world and is the second-largest company in Finland (when considering revenue)—will start job negotiations in the oil products business unit and its supporting functions in Finland.
The plans would mean up to 470 job cuts, including possible outsourcing, Neste noted in a statement on Monday. The decisions on the measures and impacts on the various functions, personnel groups and locations will be made after the negotiations have been concluded. The planned changes are expected to result in annual fixed cost savings of approximately €50 million.
“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,” Peter Vanacker, the president and CEO of Neste, said in the statement.
The demand for fossil oil products will, according to Neste, continue to decline. Instead, the share of renewable energy solutions will continue to grow in the coming years. The Covid-19 pandemic has substantially accelerated the decline in demand for oil products, which is not expected to recover to previous levels.
“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,” Vanacker said.
The planned measures will not affect the security of fuel distribution supply in Finland.