Shell has axed the construction of its biofuels plant in the Netherlands, ending what would have been one of the biggest converters of waste into green jet fuel in Europe.
The oil company, which paused construction at the site in July last year to tackle technical problems, said it had decided not to restart building after it found the plant would be “insufficiently competitive” to meet demand for “affordable, low-carbon products”.
The move to scrap the project in Rotterdam marks another setback for its biofuel designs, after the company cancelled a sustainable aviation fuel (SAF) project on Singapore’s Bukom Island in March 2023.
It comes amid a wider shift away from renewable energy projects in the oil and gas sector as fossil fuel companies pursue higher profits.
In March last year Shell watered down a key emissions target, setting out a plan to reduce the carbon emissions intensity of the energy it sells by 15-20% by the end of the decade compared with its previous goal of 20%.
Shell began construction of the plant in Rotterdam in the Netherlands in 2021, initially expecting to start producing up to 820,000 tonnes of biofuels, with plans to bring it online in April 2024. This was later pushed back to 2025.
Machteld de Haan, the company’s head of downstream, renewables and energy solutions, said: “As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive to meet our customers’ need for affordable, low-carbon products.
“This was a difficult decision, but the right one, as we prioritise our capital towards those projects that deliver both the needs of our customers and value for our shareholders.”
She added that the company continued “to believe that low-carbon molecules, including biofuels, will underpin the future energy system” and that Shell was “one of the world’s largest traders and suppliers of biofuels, including sustainable aviation fuel”.
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About half of the biofuels from the plant in Rotterdam were expected to be used for SAF, made from waste cooking oil and animal fat.
Proponents for SAF believe it could be crucial for airlines to cut their carbon emissions in line with global climate targets, although critics argue it is not a realistic alternative given the limited timescale to prevent rising emissions from creating a climate disaster. The aviation industry accounts for about 3% of the world’s carbon emissions, according to the International Energy Agency.