Shell has suspended the construction of Europe’s biggest biofuel plant, which was to convert waste by the end the decade into green jet fuel or biodiesel.
The oil company announced on Tuesday that it will “temporarily” pause work on one its largest energy transition projects in order to resolve the technical issues which have slowed its progress.
Shell started building the plant in Rotterdam, Netherlands in 2021. Initially, Shell expected to produce up to 820,000 tonnes biofuels per year in April. This was then pushed to 2025.
Around half of the biofuels produced at the plant were intended to be used in sustainable aviation fuels (SAF), which are made from animal fat and waste cooking oils. Some people believe that the fuel is essential if airlines want to reduce their carbon emissions and meet global climate targets.
This nascent sector has also been criticized by those who say that SAF cannot be a realistic replacement for paraffin-based aircraft fuels in the timeframe needed to avoid a climate disaster caused by rising carbon emissions.
Shell’s spokesperson announced that the company had made a difficult decision to temporarily stop construction on site. This gives us an opportunity to complete engineering, optimize project sequencing, and maintain capital discipline.
Shell spokesperson said: “Low carbon fuels are a crucial part of our ambitions to offer affordable and sustainable products for our customers.”
Aviation is one of the hardest forms of transport to decarbonise, as it accounts for about 3% of global carbon emissions.
Shell’s plans to develop biofuels have been dealt another blow by the decision to stop the work. In March of last year, the company had cancelled a SAF project on Singapore’s Bukom island.
Shell considered investing in a facility that could produce up to 550,000 tonnes SAF per year, which would be used for major Asian hubs like the Hong Kong International Airport and Singapore Changi.
Shell’s green plans for aviation have been dealt a blow after the company announced a scale back in its green growth goals by reducing staff who work on low-carbon options by at least 100 roles. Another 130 positions will also be reviewed.
Shell is expected to drastically reduce its plans to fuel hydrogen vehicles and to develop offshore wind farms. Shell was a pioneer of hydrogen fuel, but it has lost popularity as electric cars have become more popular.
Wael Sawan is the chief executive of Shell and he plans to focus on high-profit oil projects, and expand its gas business in order to take advantage of higher oil and gas prices globally after Russia invaded Ukraine.
Global energy prices are on the rise, prompting executives in the oil and gas sector to re-evaluate their green investment plans and climate goals.
BP announced last week that it would halt investments in new offshore projects and freeze hiring for its new business division in an attempt to appease investors unhappy with the more environmentally friendly direction taken by the ousted Bernard Looney.
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