Shell has halted construction of a biofuel facility in Rotterdam to find ways to reduce the project’s costs. The oil and gas major says this is a temporary pause to give the company time to assess the most commercial way forward.
The facility is to produce 820,000 tonnes of sustainable aviation fuel (SAF) and renewable diesel made from waste a year at the Shell Energy and Chemicals Park Rotterdam, the Netherlands. Shell took a final investment decision for the planned biofuels facility in September 2021.
Shell now says it needs more time to address project delivery and ensure future competitiveness given current market conditions. As a result, contractor numbers will reduce on site and activity will slow down, helping to control costs and optimise project sequencing.
Also read: Shell plans to build giant biofuels facility in Rotterdam
Commercial way forward
‘Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,’ says Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director.
He adds: ‘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. And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions.’
Following the decision to pause on-site construction, an impairment review will be conducted for this project.
Picture: Shell’s Pernis refinery in Rotterdam (by Photographic Services, Shell International Limited/Ernst Bode).
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