Shell Nederland Raffinaderij is to ‘temporarily pause’ construction of its 820,000 tonnes-a-year biofuels facility at the Shell Energy and Chemicals Park Rotterdam.
Shell said it needs to ‘address project delivery and ensure future competitiveness given current market conditions,’ in a blow to the development of the nascent sector.
Contractor numbers will be cut on site and activity slow down, helping to control costs and optimise project sequencing, while Shell carries out an impairment review.
Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director, said, “Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project.”
“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 decarbonise.”
Shell took a final investment decision (FID) for the planned facility in September 2021, which is designed to produce sustainable aviation fuel (SAF) and renewable diesel made from waste.
The energy major plans to invest $10-$15bn across 2023-2025 to support the development of low-carbon energy solutions including e-mobility, low-carbon fuels, renewable power generation, hydrogen, and carbon capture and storage.
Finance and supply remain two key stumbling blocks for biofuels’ uptake.
Expenditure on biofuels to meet IEA roadmap targets will be between $11-13trn over the next 40 years, and around 3 billion tonnes of biomass per year will be needed in 2050.
In a separate paper, the IEA warns biodiesel, renewable diesel and biojet fuel producers are heading for a feedstock supply crunch to 2027 if current trends do not change.
Biofuels are needed to provide low-carbon fuel alternatives for planes, ships and other heavy transport modes, and will eventually provide one fifth (2.1 gigatonnes of CO2) of emission reductions in the transport sector.
One area showing promise is the conversion of synthesis gas (syngas) to ethanol and hydrogen by thermochemical and microbiological methods, with syngas created by the gasification of plant biomass and pyrolysis of carbon-based waste products.
UK-based Advanced Biofuel Solutions has produced carbon negative biomethane from a 22 gigawatt (GW) hour (GWh) waste-to-syngas line at its demonstration plant in Swindon (click here).
CEPSA has partnered with biofuels developer Bio-Oils to build a 500,000-tonnes capacity SAF and renewable diesel plant which aims to open in 2026 (click here).
