Shell has announced the suspension of construction work on a major biofuel plant in Rotterdam, which was expected to produce 820,000 tonnes of biofuels annually. This facility was particularly significant for producing Sustainable Aviation Fuel (SAF), crucial for reducing the aviation sector's carbon footprint. The suspension follows an "impairment review" by Shell Nederland Raffinaderij, casting doubts on the project's future.
Shell's decision comes amidst a series of strategic shifts by major energy companies. BP recently paused new offshore wind projects and halted two biofuel projects in Germany and the U.S. Similarly, Shell's CEO Wael Sawan, who took office in January 2023, has focused on increasing returns by scrapping and selling off various renewable and hydrogen projects. Sawan's approach has led to an 11% rise in Shell's share price this year.
Huibert Vigeveno, Shell's Downstream, Renewables, and Energy Solutions Director, stated that the pause will allow Shell to reassess the project's commercial viability. Despite these shifts, Shell maintains its commitment to achieving net-zero emissions by 2050. The company plans to provide further details in its upcoming quarterly trading update.
In a related development, Shell Canada Products has announced the Final Investment Decision (FID) for the Polaris carbon capture project at the Shell Energy and Chemicals Park in Scotford, Alberta. The project aims to capture approximately 650,000 tonnes of CO2 per year from the Scotford refinery and chemicals complex, with completion expected by 2028.