- Shell ensure future competitiveness given current market conditions
- The UK oil and gas industry has been rethinking its low-carbon ambitions
Shell has halted construction on a major biofuels facility in the Netherlands that was to focus on converting waste into jet fuel.
The oil giant said work had been paused at its Rotterdam plant to ‘address project delivery and ensure future competitiveness given current market conditions.’
It intends to decrease activity and the number of on-site contractors to ‘control costs and optimise project sequencing.’
Pausing: Shell has halted construction on a major biofuels facility in the Netherlands
Shell gave the project the green light in September 2021 as part of its plan to provide more low-carbon fuels for transport and hydrogen across Europe.
Should the facility be finished, it will produce enough renewable diesel to eliminate 2.8 million tonnes of carbon dioxide each year, equivalent to taking more than one million cars off the road.
However, Britain’s oil and gas industry has been rethinking its low-carbon energy ambitions, partly motivated by investor concerns over weak returns.
Last week, BP announced it was freezing all new offshore wind power schemes and investment in two biofuel projects in Germany and the United States.
Its chief executive, Murray Auchincloss, said the FTSE 100 business would instead prioritise investment in fossil fuel assets.
His approach represents a stark departure from his predecessor, Bernard Looney, who introduced the company’s target to cut emissions to net zero by 2050.
Shell has also been scaling back energy transition projects and targets under its new Wael Sawan, who succeeded longtime boss Ben van Beurden last year.
Although the firm is still aiming for net zero in 2050, it recently ditched a target to reduce the net carbon intensity of its energy products by 45 per cent by 2035.
Regarding the Rotterdam facility, Shell’s downstream, renewables and energy solutions director, Huibert Vigeveno, said the pause ‘will allow us to assess the most commercial way forward for the project.’
He added: ‘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.’
Shell shares were 0.3 per cent higher at 2,866.5p on late Tuesday afternoon and have increased by around 21 per cent over the past 12 months.
