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Released July 03, 2024 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Supermajor Shell plc (NYSE:SHEL) (London, England) said Tuesday it was pressing the pause button on construction of a biofuels facility in Rotterdam while it assesses current market conditions.
Shell sanctioned work in 2021 on a facility that would produce biofuels drawn from organic waste. The Rotterdam project was slated for 820,000 tons per year, or approximately 5.8 million barrels, with a startup date in 2025.
"Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project," said Huibert Vigeveno, the director for Shell's downstream, renewables and energy solutions division.
Formerly known as the Pernis refinery, Shell said the facility was expected to be the largest of its kind in Europe. At the time of initial planning in 2021, Shell said a facility that size could avoid some 2.8 million tons of carbon dioxide emissions per year, the same as removing more than 1 million gasoline-powered vehicles from the road.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database can click here for details related to the project.
Shell had also planned to install carbon capture technology at the facility, storing the carbon emissions coming from manufacturing processes at a depleted natural gas field in the North Sea.
Shell, for its part, said it was committed to investing as much as $15 billion through 2025 to support low-carbon fuels, carbon storage and renewable energy.
Many opportunities during the so-called energy transition remain cost prohibitive, however, prompting something of a scaled-back move away from fossil fuels.
Shareholder pressure caused BP plc (NYSE:BP) (London, England) to enact a pause on new hires and a freeze on offshore wind, focusing instead on oil and natural gas, the Reuters news agency reported last week.
Sources at the energy company told the news agency that offshore wind in particular was not expected to generate any significant revenue for years.
On market factors, supplies of biofuels are on the rise in the United States, with Phillips 66 (NYSE:PSX) (Houston, Texas) announcing it reached full production of renewable fuels at its Rodeo refinery in California. In Europe, meanwhile, demand is on the decline after countries scaled back their biofuel mandates.
Ample supply and weak demand point to bearish conditions in the biofuels market. "The delays further highlight that the advanced biofuels market is not an easy one," UBS analyst Joshua Stone told Reuters in a separate report. "The oil majors have dipped their toes and found it challenging."
Before the announcement, Shell said it was planning to cut production of traditional fuels by 55% by 2030, leaning instead on low-carbon options such as hydrogen and biofuels. Rotterdam was expected to rely on used cooking oil, animal fats and other residual products as feedstock.
Vigeveno, the downstream director, said the pause does not mean Shell is abandoning the energy transition.
"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 decarbonize," he said. "And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
Shell sanctioned work in 2021 on a facility that would produce biofuels drawn from organic waste. The Rotterdam project was slated for 820,000 tons per year, or approximately 5.8 million barrels, with a startup date in 2025.
"Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project," said Huibert Vigeveno, the director for Shell's downstream, renewables and energy solutions division.
Formerly known as the Pernis refinery, Shell said the facility was expected to be the largest of its kind in Europe. At the time of initial planning in 2021, Shell said a facility that size could avoid some 2.8 million tons of carbon dioxide emissions per year, the same as removing more than 1 million gasoline-powered vehicles from the road.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database can click here for details related to the project.
Shell had also planned to install carbon capture technology at the facility, storing the carbon emissions coming from manufacturing processes at a depleted natural gas field in the North Sea.
Shell, for its part, said it was committed to investing as much as $15 billion through 2025 to support low-carbon fuels, carbon storage and renewable energy.
Many opportunities during the so-called energy transition remain cost prohibitive, however, prompting something of a scaled-back move away from fossil fuels.
Shareholder pressure caused BP plc (NYSE:BP) (London, England) to enact a pause on new hires and a freeze on offshore wind, focusing instead on oil and natural gas, the Reuters news agency reported last week.
Sources at the energy company told the news agency that offshore wind in particular was not expected to generate any significant revenue for years.
On market factors, supplies of biofuels are on the rise in the United States, with Phillips 66 (NYSE:PSX) (Houston, Texas) announcing it reached full production of renewable fuels at its Rodeo refinery in California. In Europe, meanwhile, demand is on the decline after countries scaled back their biofuel mandates.
Ample supply and weak demand point to bearish conditions in the biofuels market. "The delays further highlight that the advanced biofuels market is not an easy one," UBS analyst Joshua Stone told Reuters in a separate report. "The oil majors have dipped their toes and found it challenging."
Before the announcement, Shell said it was planning to cut production of traditional fuels by 55% by 2030, leaning instead on low-carbon options such as hydrogen and biofuels. Rotterdam was expected to rely on used cooking oil, animal fats and other residual products as feedstock.
Vigeveno, the downstream director, said the pause does not mean Shell is abandoning the energy transition.
"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 decarbonize," he said. "And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
