Uchenna Izundu
International Editor
LONDON, June 27 -- Royal Dutch Shell PLC plans to increase its investment in biofuels research and development to improve energy security and help to lower carbon emissions, a senior executive from the company said June 25 at a press briefing in London.
Rob Routs, Shell executive director, downstream, said the company's focus would be on biofuels—in particular converting waste oils and fats into fuels. This hydrogenated process, Routs said, "is expensive at the moment, but there is some commercial application of it."
Routs declined to say how much the company plans to spend on biofuels R&D, citing company confidentiality. But he did say the company has invested $1 billion in renewable energy over the past 5 years. Higher oil prices are needed to underpin the long-term commerciality of biofuels and experience in developing biofuels plants will also be a critical factor, he said.
Routs called for subsidies or special tax treatments to encourage the construction of biofuels plants, stressing that these were necessary until plants could be developed on a large scale. "We need a few cents/liter [subsidy] to make it work," Routs told OGJ.
Routs has deliberately steered the company away from producing ethanol from sugar cane because he foresaw the difficulty of using food crops for fuels. "I don't think the sugar cane situation in Brazil and the US is sustainable," he said. "If it's picked up for fuel production, there will be a clash and I don't want to get involved in fuel and food competition. Sourcing is a big issue and I don't see us going into owning land collecting waste products to get into this."
Shell has joined German company Choren to launch a new biofuels plant that will convert biomass, such as woodchips, into synthetic fuel, which is then being marketed by Choren as SunFuel. The fuel is being used in diesel engines and can reduce emissions. The 15,000 tonne/year plant is due to become operational in late 2007 or early 2008. Using waste plant material instead of valuable food crops would help the biofuels industry to circumvent the growing political pressure over using crops for fuel.
Routs told OGJ that Shell is working on various cellulose ethanol initiatives. The US government has promised Canadian company Iogen Corp., which Shell has teamed with, an $80 million grant to build an 18 million gal/year plant in Idaho that will produce cellulosic ethanol from plant waste and straw. Last year, Shell signed a letter of intent with Volkswagen and Iogen to assess the economic feasibility of producing cellulose ethanol in Germany.
Last year, Shell sold more than 3.5 billion l. of biofuels, Routs said.
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