Photo: Freepik
Shell has abandoned plans to build a biofuels factory in the Netherlands, dealing a blow to Europe’s hopes of decarbonising the aviation industry.
The oil giant has scrapped the project after pausing work on the site last July, with a review concluding that the plant was too expensive and “insufficiently competitive”.
Under its proposals, the plant in Rotterdam was designed to be one of Europe’s biggest converters of waste into sustainable aviation fuel (SAF) and biodiesel.
The decision to axe construction will pose a significant challenge for Europe as it seeks to reduce the environmental impact of flying.
It also marks the latest step in Shell’s shift away from net zero, as the company scales back green investment to focus more on oil and gas.
Ashley Kelty, a leading analyst at Panmure Liberum, said it was “another nail in the ideological coffin for SAF and biofuels”.
He said: “It means that SAF is going to be more expensive, limited in supply and therefore difficult for airlines to justify using.”
The take-up of green jet fuel – which is produced from waste materials such as used cooking oil – has struggled in recent years amid faltering production, which has kept prices high.
Machteld de Haan, Shell’s downstream, renewables and energy solutions president, said: “As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive to meet our customers’ need for affordable, low carbon products.
“This was a difficult decision, but the right one, as we prioritise our capital towards those projects that deliver both the needs of our customers and value for our shareholders.”
It marks a considerable turnaround for Shell, which only announced the biofuels project in 2021.
At the time, the company said it was transforming 14 oil refineries into five low-carbon energy sites to meet growing demand from the transport sector.
This formed part of a target to “reduce the production of traditional fuels by 55pc by 2030 and provide more low-carbon fuels such as biofuels for road transport and aviation, and hydrogen”.
However, these targets have been dashed as part of a pivot away from renewables, posing a problem for Europe’s airlines.
Aviation is the most climate‑intensive form of transport and its growth means its emissions have been growing faster than any other mode of transport.
Britain alone consumes about 11m tonnes of aviation fuel a year and emissions soared to 37m tonnes in 2024 – more than double the 16m tonnes seen in 1990.
That is set to grow even faster in the next two decades.
The UK Government has attempted to reverse this by ordering airlines to use 10pc of SAF by 2030.
However this requirement, also in effect across Europe, requires a network of refineries which are not yet materialising.
Shell’s decision to abandon the Rotterdam project is just the latest of several such schemes to fail.
In 2022, Boris Johnson – the prime minister at the time – announced a new policy known as “jet zero” to enforce a minimum threshold of green fuel use.
He also pledged the construction of a minimum of five new SAF plants, which have not been built.
It means the only company making SAF in the UK is the Phillips 66 refinery on Humberside in North Lincolnshire – and its output is just 20,000 tonnes a year.
That’s about 0.2pc of the 11 million tonnes of aviation fuel Britain consumes annually.
Despite the decision, Shell said it remained committed to a low-carbon future.
Ms de Haan said: “We continue to believe that low-carbon molecules, including biofuels, will underpin the future energy system. Shell is at the forefront of this industry and its development as one of the world’s largest traders and suppliers of biofuels, including SAF.”
a Department for Transport spokesman said: “Sustainable aviation fuel (SAF) is a core part of the global drive to decarbonise aviation. SAF is already being produced and supplied at scale in the UK, and we are seeing encouraging early signs that the SAF Mandate will be met.”
Source: msn
