Shell pauses construction of major biofuel plant in Rotterdam

3 July 2024

Shell announced it will “temporarily pause” on-site construction work at its biofuels facility at the Shell Energy and Chemicals Park Rotterdam in the Netherlands (formerly known as the Pernis refinery) to “address project delivery and ensure future competitiveness given current market conditions”.

When completed, the facility—one of Europe’s largest biofuel plants—would produce 820,000 tonnes of biofuels per year (nearly 17 thousand barrels per day) from waste feedstocks.

The announcement suggests that Shell is less confident about the biofuel market than before. “Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director.

Shell took a final investment decision for the planned biofuels facility in September 2021 and production was scheduled to start in April 2024, later pushed back to 2025. The facility is designed to produce low-carbon fuels including sustainable aviation fuel (SAF) and renewable diesel from used cooking oil, waste animal fat, and other industrial and agricultural residual products, using technology developed by Shell.

The decision to pause the work follows the company’s cancellation of an SAF project at Singapore’s Bukom Island in March last year and is also expected to affect Shell’s plans for offshore wind development. Instead, Shell’s chief executive, Wael Sawan, is planning to shift its focus towards high-profit oil projects and expanding its gas business, according to The Guardian. The company has also scaled down its plans for hydrogen fuel business.

Following the decision to pause construction, an impairment review will be conducted for this project, the company said. Further guidance will be included in Shell’s second quarter update note scheduled for publication on July 5, 2024.

Source: Shell