The 820,000 tons/year biofuel project will not be built!

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Due to high costs and the project’s lack of competitiveness, the international oil giant Shell announced on September 3 that it would abandon its plan to build a biofuel complex with an annual capacity of 820,000 tons in Rotterdam, the Netherlands. 　　This decision marks a setback for Shell’s new flagship low-carbon project. Shell approved the construction of this project in September 2021, with an annual production capacity of 820,000 tons, and it is scheduled to come online by 2025. Due to poor market conditions, the construction of this project was suspended in July 2024. 　　Shell stated that after thorough commercial and technical evaluations, rising costs and market conditions made the project unviable. Machteld de Haan, President of Shell’s Downstream, Renewable Energy, and Energy Solutions division, said the decision was “difficult but right” as the company gives priority to projects with higher returns. 　　Despite the suspension of the Rotterdam plant, Shell continues to emphasize its ongoing investments in energy transition. Between 2023 and 2024, Shell invested $8 billion in low-carbon projects, including electricity, carbon capture and storage (CCS), hydrogen, and low-carbon fuels. In 2024, Shell traded over 10 billion liters of low-carbon fuels, with sales volumes being 10 times its production volume. In the same year, Shell became one of the world’s leading suppliers of sustainable aviation fuel (SAF), accounting for nearly 20% of its total sales in North America and Europe. 　　European capital-intensive biofuel projects are facing increasingly severe challenges; inflation, high construction costs, and unreliable policy support are slowing down investment momentum. Finnish company Neste announced in February this year that it would delay the commissioning of the expansion project for its biofuel and biorefinery facility in Rotterdam, the Netherlands, with an annual production capacity of 1.3 million tons, until 2027 ； Finland’s papermaking giant Stora Enso announced in May that it had canceled plans to build a fuel and chemicals production plant capable of processing 500,000 tons per year of biomass materials in Rotterdam.