Shell Nederland Raffinaderij, part of Shell, has decided to temporarily pause the construction of its biofuels facility at Shell Energy and Chemicals Park Rotterdam, citing weak market conditions.
The UK energy major stated that the decision is aimed at reassessing project delivery and ensure competitiveness in the current economic landscape.
The move will result in a reduction of contractors and a slowdown in activities, allowing for better cost control and optimised project sequencing, it added.
With a planned annual capacity of 820,000tpa, the biofuels facility is designed to produce SAF and renewable diesel from waste.
Shell announced the FID for the facility in September 2021.
Initially expected to commence production in 2025, the facility's start date has now been pushed back towards the end of the decade, according to Reuters.
Shell CEO Wael Sawan, who assumed his role in January 2023, has been steering the company to prioritise its most profitable ventures, particularly in oil and gas, by divesting from less lucrative renewable and hydrogen projects and exiting certain power markets.
Shell's strategic shift has also led to an impairment review for the Rotterdam biofuels project.
Shell downstream, renewables and energy solutions director Huibert Vigeveno said: “Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project.
“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. And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions.”
Meanwhile, late last month Shell Canada achieved the FID for carbon capture and storage initiatives.
These include the Polaris project and the Atlas Carbon Storage Hub, which will be developed in partnership with ATCO EnPower.
These projects are part of Shell's efforts to reduce CO₂ emissions at its Scotford refinery and chemicals complex, with operations expected to start by the end of 2028.
