Shell Nederland Raffinaderij B.V. has confirmed it will not restart construction of its biofuels facility at the Shell Energy and Chemicals Park in Rotterdam. The project, which began in 2022, has been halted following a commercial and technical reassessment that deemed it insufficiently competitive.
Machteld de Haan, Shell’s Downstream, Renewables and Energy Solutions President, stated, “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.”
Despite this setback, Shell maintains its commitment to biofuels as a critical component of future energy systems. “We continue to believe that low carbon molecules, including biofuels, will underpin the future energy system. Shell is at the forefront of this industry and its development as one of the world’s largest traders and suppliers of biofuels, including Sustainable Aviation Fuel (SAF),” De Haan added.
Between 2023 and 2024, Shell invested U.S.$8 billion in lower carbon technologies such as power, carbon capture and storage (CCS), hydrogen, and low-carbon fuels. In 2024 alone, the company traded over 10 billion litres of low-carbon fuels and became one of the world’s leading suppliers of SAF.
This decision underscores the challenges faced by energy companies as they navigate the complex landscape of transitioning to low-carbon solutions. The halt in construction could signal a broader industry trend, where projects are scrutinised more rigorously for their economic viability and competitive edge. It also highlights the need for continued innovation and investment in technologies that can deliver both environmental and financial returns.
The energy sector is at a crossroads, balancing the urgent need to reduce carbon emissions with the practicalities of cost and competitiveness. Shell’s decision to prioritise projects that offer both customer value and shareholder returns could influence other companies to adopt similar strategies, potentially reshaping the trajectory of the biofuels industry. As the market evolves, the focus on affordability and scalability will likely become even more pronounced, driving further innovation and collaboration across the sector.