Shell PLC said it has officially pulled the plug on subsidiary Shell Nederland Raffinaderij BV’s proposed biofuels plant in Rotterdam, the Netherlands.
After calling an interim suspension of works on the planned 820,000-tonnes/year (tpy) biofuels plant last year to reassess the project's competitiveness, Shell said on Sept. 3 it will not resume construction on the plant following conclusions of an in-depth commercial and technical evaluation showing the investment no longer makes financial sense.
“It became clear the project wouldn’t be competitive enough to meet our customers’ demand for affordable, low-carbon products,” said Machteld de Haan, who leads Shell’s Downstream, Renewables, and Energy Solutions business. “It was a tough call, but the right one.”
Approved for final investment decision in 2021 and started for construction in 2022 at Shell Energy and Chemicals Park Rotterdam, the plant was to become one of Europe’s biggest for sustainable aviation fuel (SAF) and renewable diesel made from waste, with SAF initially projected to make up more than half of the site’s production.
Despite the project’s cancellation, Shell said it remains committed to biofuels and will continue trading and supplying low-carbon fuels, including SAF.
While the Rotterdam project is off the table, the operator said it is investing heavily in other low-carbon areas, with $8 billion between 2023-24 dedicated to reduced-carbon technologies, including hydrogen, carbon capture, and electrification.
In the Netherlands specifically, Shell said it has invested €6.5 billion in recent years for energy transition projects. These include:
- The Porthos carbon capture and storage (CCS) project at the port of Rotterdam that in 2026 will begin capturing and transporting carbon dioxide (CO2) from local industrial companies for storage in empty gas fields under the North Sea, including about 2.5 million tpy collected for a period of 15 years from Shell, ExxonMobil Corp., Air Liquide SA, and Air Products and Chemicals Inc.
- The Holland Hydrogen 1 electrolyzer, a 200-Mw plant under construction that will be powered by offshore wind from the North Sea to produce up to 80 tonnes/day of hydrogen upon completion later this decade.
- Upgrades to subsidiary Nederland Chemie BV’s Moerdijk’s petrochemicals plant, which hosts a 500,000-tpy steam cracker for ethylene production.
Shell’s decision to walk away from the Rotterdam biofuels follows the operator’s ongoing shift to focusing on projects that deliver both lower emissions and better returns.
“We still believe low-carbon fuels will play a big role in the future,” de Haan said. “But we have to be selective about where we invest.”
