Market Conditions Prompt Shell to Pause Major Biofuels Project in Europe

Energy giant Shell has announced a pause in the construction of its significant biofuels facility in the Netherlands, attributing the decision to current market conditions. The Rotterdam-based project, which was set to produce 820,000 tonnes of biofuels annually, was initially expected to be operational by 2025. This facility was poised to be one of Europe’s largest, manufacturing sustainable aviation fuel and renewable diesel from waste, and projected to reduce CO2 emissions by 2.8 million tonnes per year.

The halt follows Shell’s earlier update this year on its energy transition strategy, which outlines an investment of $10-15 billion in low-carbon energy solutions by the end of 2025. This includes ventures in electric vehicle charging, biofuels, renewable power, hydrogen, and carbon capture and storage. While maintaining its 2050 net-zero emissions goal and a 2030 target to cut Scope 1 and 2 emissions by half, Shell has retracted its 2035 target for a 45% reduction in the net carbon intensity of its products, citing uncertainties in the pace of the energy transition.

Shell stated that the decision to pause construction aims to address project delivery and future competitiveness under current market conditions. The move is intended to control costs and optimize project sequencing, with future updates on the project’s status and timeline promised.

Huibert Vigeveno, Shell’s Director of Downstream, Renewables, and Energy Solutions, reaffirmed the company’s commitment to its net-zero emissions target by 2050, emphasizing the importance of low-carbon fuels in Shell’s strategy to support profitable decarbonization for both the company and its customers. Vigeveno noted that the decision would allow Shell to reassess the most commercially viable path forward for the project.