Shell Scraps Rotterdam Biofuels Plant Over Cost Concerns
Shell plc (LON: SHEL) has confirmed it will not restart construction of its biofuels facility at the Shell Energy and Chemicals Park in Rotterdam, following a reassessment that found the project would be insufficiently competitive to meet customer needs for affordable low-carbon fuels.
The decision marks a setback for one of Shell’s flagship low-carbon projects, which began construction in 2022 and was positioned to support Europe’s push for renewable fuels, particularly sustainable aviation fuel (SAF). Shell said that after a detailed commercial and technical review, rising costs and market conditions made the project unviable.
Machteld de Haan, Shell’s Downstream, Renewables and Energy Solutions President, said the decision was “difficult but right” as the company prioritizes projects with stronger returns. She added that Shell remains committed to biofuels, highlighting its global trading dominance in SAF and advanced biofuels.
Despite shelving the Rotterdam plant, Shell stressed its ongoing energy transition investments. Between 2023 and 2024, the company deployed $8 billion in lower-carbon options, spanning hydrogen, carbon capture and storage (CCS), and renewables. In 2024, Shell traded over 10 billion liters of low-carbon fuels—ten times its own production—and became a leading SAF supplier across North America and Europe
The Netherlands remains a strategic hub for Shell. Recent commitments include the €1.3 billion Porthos CCS project, the 200 MW Holland Hydrogen 1 electrolyser slated for commissioning in 2026, and electrification upgrades at Shell Chemicals Park Moerdijk. Across the country, Shell has invested €6.5 billion in energy transition initiatives over recent years.
Shell also continues to expand its global biofuels footprint through ventures such as its 44% stake in Brazil’s Raízen (bioethanol), the 2022 acquisition of Malaysian recycler EcoOils for advanced feedstocks, and its 2023 purchase of Danish biogas producer Nature Energy.
The cancellation underscores mounting challenges for capital-intensive biofuels projects in Europe, where inflation, high construction costs, and uncertain policy support have slowed investment momentum. While demand for SAF is projected to grow sharply as airlines seek to cut emissions, producers face thin margins and competition from cheaper fossil-based alternatives.
Shell said related impairments from the Rotterdam project will be disclosed in upcoming quarterly results.
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