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Shell will pause on-site construction work at a biofuels plant in Rotterdam amid weak market conditions, the supermajor said on Tuesday, as international oil firms continue to re-evaluate their low-carbon energy projects.
Shell’s subsidiary Shell Nederland Raffinaderij will temporarily pause on-site construction work at its 820,000 tons-a-year biofuels facility at the Shell Energy and Chemicals Park Rotterdam in the Netherlands “to address project delivery and ensure future competitiveness given current market conditions,” the company said.
“Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director.
“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 decarbonise,” Vigeveno added.
Last month, the other UK-based supermajor, BP, said that it is scaling back plans for the development of new sustainable aviation fuel (SAF) and renewable diesel biofuels projects at its existing sites, pausing planning for two potential projects while continuing to assess three for progression.
Earlier this year, Shell reaffirmed its ambitions to be a net-zero energy business by 2050 but eased its carbon intensity target for 2030 as it has shifted away from clean power sales to retail customers.
Shell is also retiring its interim 2035 target of a 45% reduction in net carbon intensity, “acknowledging uncertainty in the pace of change in the energy transition,” the supermajor said.
Shell also noted that investment in oil and gas would be needed because demand for oil and gas is expected to drop at a slower rate than the natural decline rate of the world’s oil and gas fields, which is 4-5% per year.
In the summer of 2023, Shell unveiled its new strategy to continue investing in oil and gas production and selectively pour capital into renewable energy solutions, angering climate activists and some institutional investors.
Shell’s CEO Wael Sawan has said that reducing global oil and gas production would be “dangerous and irresponsible” as the world still desperately needs those hydrocarbons.
