Shell cancels Rotterdam biofuels plant, citing cost concerns, but continues major investments in hydrogen, SAF, CCS, and energy transition projects.
Shell Nederland Raffinaderij B.V., a subsidiary of Shell plc, has officially announced that it will not resume construction of its biofuels production facility at the Shell Energy and Chemicals Park in Rotterdam. The project, which was initiated in 2022, has been under review as the company reassessed its feasibility. After conducting a detailed commercial and technical evaluation, Shell concluded that moving forward with the plant would not be competitive enough in the current market environment.
Machteld de Haan, President of Shell’s Downstream, Renewables, and Energy Solutions division, explained the rationale behind this strategic decision. According to her, the assessment revealed that completing the facility would not align with the company’s priority of providing affordable, low-carbon energy solutions to customers. She emphasized that, although difficult, this decision ensures Shell directs capital toward projects capable of balancing customer needs with shareholder value.
De Haan also reaffirmed Shell’s belief in the long-term role of low-carbon molecules, particularly biofuels, in shaping the future energy landscape. She noted that Shell continues to play a leading role in this sector as one of the world’s largest traders and suppliers of biofuels, including Sustainable Aviation Fuel (SAF).
Despite halting this specific construction project, Shell remains committed to investing in lower-carbon energy opportunities. Between 2023 and 2024, the company allocated approximately U.S. $8 billion to a range of cleaner energy solutions. These include renewable power generation, carbon capture and storage (CCS), hydrogen development, and the advancement of low-carbon fuels. By 2024, Shell had already traded over 10 billion litres of low-carbon fuels and sold ten times more than it produced, highlighting its strong presence in the sector. Additionally, in the same year, Shell positioned itself as one of the global leaders in the supply of SAF.
The Netherlands continues to hold strategic importance for Shell’s business operations. The company maintains a wide footprint across the nation’s energy system, ranging from upstream oil and gas production to its extensive retail fuel network. Over recent years, Shell has invested around €6.5 billion in energy transition projects within the Netherlands. Notable initiatives include the Porthos CCS project for large-scale carbon dioxide storage, the Holland Hydrogen 1 project aimed at renewable hydrogen development, and modernization measures such as new furnaces and electrification at Shell Chemicals Park Moerdijk.
In summary, while Shell has opted to discontinue the Rotterdam biofuels facility due to cost competitiveness issues, the company continues to demonstrate its dedication to supporting the global energy transition. Its strategic investments in low-carbon technologies reflect a broader vision of becoming both a leading partner and the investment case of choice in a rapidly evolving energy landscape.
