Shell halts construction of Rotterdam SAF, renewable diesel plant

July 2, 2024
Shell has suspended construction activities on a proposed 820,000-tpy biofuels plant in the Netherlands.

Shell PLC subsidiary Shell Nederland Raffinaderij BV has suspended construction activities on a proposed 820,000-tonnes/year (tpy) biofuels plant already under way at the Shell Energy and Chemicals Park Rotterdam, the Netherlands, formerly known as the Pernis refinery (OGJ Online, Sept. 17, 2021).

On-site construction works for the biofuels plant have been “temporarily pause[d]…to address project delivery and ensure future competitiveness given current market conditions,” the operator and its parent company said in separate July 2 releases.

The interim suspension will reduce the presence of on-site contractors and construction-related works, both of which will enable Shell to control costs and optimize project sequencing, according to the companies.

“Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s director of downstream, renewables and energy solutions.

In the wake of its decision to suspend works on the Rotterdam biofuels plant, Shell said it now plans to undertake a project-impairment review, with further guidance to be issued in the company’s second-quarter 2024 earnings update note due for release on July 5.

Additional information regarding the project’s status and timelines will be communicated in future updates, according to the companies.

Despite the renewable project’s indefinite suspension, Shell reiterated its ongoing pledge to local and global decarbonization efforts.

“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 to help us and our customers profitably decarbonize,” said Vigeveno.

“And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions, Vigeveno added.

Shell previously said it plans to invest $10-$15 billion across 2023-25 to support the development of low-carbon energy solutions including e-mobility, low-carbon fuels, renewable power generation, hydrogen, and carbon capture and storage.

Rotterdam biofuels project overview

Approved for final investment in September 2021 for proposed start of production in 2024, the Rotterdam biofuels plant was to produce sustainable aviation fuel (SAF) and renewable diesel made from waste, producing enough renewable diesel to avoid 2.8-million tpy of carbon dioxide (CO2) emissions the equivalent of taking more than 1 million European cars off the roads.

A range of certified sustainable vegetable oils, such as rapeseed, was to supplement the waste feedstocks until additoinal sustainable advanced feedstocks became more widely available.

SAF was to make up more than half of the proposed plant’s production, according to the operator.

A major component of the project was to involve construction of new hydroprocessed esters and fatty acids (HEFA) plant that would be vital to the manufacturing site’s path to net zero as well as Shell’s transformation as part of the energy transition (OGJ Online, Oct. 19, 2021).

Upon announcing the project, Shell said it planned to capture carbon emissions from the plant’s manufacturing process and store them in the empty P18-2 gas field beneath the North Sea via the Port of Rotterdam CO2 Transport Hub and Offshore Storage (Porthos) project (OGJ Online, May 13, 2024).

About the Author

Robert Brelsford | Downstream Editor

Robert Brelsford joined Oil & Gas Journal in October 2013 as downstream technology editor after 8 years as a crude oil price and news reporter on spot crude transactions at the US Gulf Coast, West Coast, Canadian, and Latin American markets. He holds a BA (2000) in English from Rice University and an MS (2003) in education and social policy from Northwestern University.