Shell says it will not restart construction of Netherlands biofuels plant

British oil giant Shell announced Wednesday it has abandoned construction of one of Europe's largest biofuel plants in the Netherlands, as it focuses on its fossil fuels business.

Faced with weak market conditions, the company last year suspended construction of the renewables biofuel factory in Rotterdam that was intended to produce sustainable aviation fuel (SAF) and diesel from waste.

"As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive," Machteld de Haan, Shell's downstream, renewables and energy solutions president, said in a statement.

The project was first announced in 2021 as part of plans to help Europe meet internationally binding emissions reduction targets.

Shell and rival UK energy giant BP have been walking back various climate objectives and focusing more on oil and gas to raise their profits, which has drawn criticism from environmental activists.

Decreased investments

Last year, Follow This, a green activist shareholder group, already pointed out that Shell was investing less in green energy projects. “the decreased investments in its clean energy division show that Shell is not serious about the energy transition,” said Follow This founder Mark van Baal. 

More than half of Shell's Rotterdam facility's capacity was intended to produce SAF -- a biofuel made from plant and animal materials like cooking oil and fat which produces lower carbon emissions than traditional jet fuel.

Under plans to tackle climate change, the EU requires airlines to gradually increase the amount of SAF they use to power planes.

EU agrees to increase use of greener fuels in aviation industry

Airlines, however, complain that SAF is not widely available and too expensive.

Shell warned investors last year that its second-quarter had suffered a significant write-down owing to the shelved project.

(with newswires)