Shell (LON: SHEL) has announced a temporary pause in the construction of one of Europe’s largest biofuel facilities in Rotterdam, Netherlands. The project, which aimed to convert waste into sustainable aviation fuel and biodiesel, has faced technical difficulties and delays since its inception in 2021.
Initially slated to begin production in April with an annual capacity of 820,000 tonnes of biofuels, the plant’s start date had already been pushed back to 2025. Now, Shell expects production to commence towards the end of the decade.
The decision to suspend construction comes amid challenging market conditions for biofuels, with weakening demand in Europe and increasing supplies in the United States putting pressure on prices. This move aligns with Shell’s recent strategy under CEO Wael Sawan to focus on more profitable operations, primarily in oil and gas.
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Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director, said in a statement that temporarily pausing on-site construction will allow Shell “to assess the most commercial way forward for the project.”
“We are committed to our target of achieving net-zero emissions by 2050, with low-carbon fuels as a key part of Shell’s strategy to help us and our customers profitably decarbonise,” he added, claiming that the company “will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions.”
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The suspension of work at the Rotterdam facility follows Shell’s cancellation of a sustainable aviation fuel project in Singapore last year and recent reductions in staff working on low-carbon solutions. The company’s recent decisions reflect a broader trend in the oil and gas industry which has seen companies reevaluate their green investment plans in light of higher global energy prices.
Information for this story was found via Shell, Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
