Global oil giant Shell has announced it will be pausing construction of its 820,000 tonnes/year biofuels facility at the company’s chemicals park in Rotterdam, the Netherlands.
Shell subsidiary Shell Nederland Raffinaderij said the decision to halt construction at the site was made to address project delivery and ensure future competitiveness given current market conditions.
In a statement on 2 July, Shell said that following the decision to pause construction, “contractor numbers will reduce on site and activity will slow down, helping to control costs and optimise project sequencing”.
“Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” Shell’s Downstream, Renewables and Energy Solutions director Huibert Vigeveno said.
“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.”
Given the go ahead by Shell in September 2021, the Netherlands plant was due to become operational in 2025, Reuters reported on 2 July.
According to the report, the facility, which would produce sustainable aviation fuel (SAF) and renewable diesel from waste, was now expected to start production towards the end of the decade.
Biofuel prices had come under pressure in recent months due to weaker demand in Europe and rising supplies in the USA, Reuters wrote.
The market is expected to remain well supplied in the coming years as more production comes online, according to analysts quoted in the report.
Shell has warned investors that it would take an impairment charge of up to US$2bn in its second quarter results to be published next month as a result of halting the Rotterdam plant and selling off its refinery and petrochemical assets in Singapore, The Guardian wrote on 5 July.
