Shell scraps plans for biofuel plant in Rotterdam

Oil and gas giant Shell has permanently halted construction of its biofuels plant in Rotterdam. The company said the building costs are too high to remain competitive. Shell had been building the plant since 2022 to produce more sustainable aviation fuels and renewable diesel, but suspended work last year while exploring ways to reduce costs.

“This was a difficult decision, but the right one. We want to focus our investments on projects that deliver value both to our customers and our shareholders,” said Shell board member Machteld de Haan.

According to Shell, in addition to the high costs of its Pernis plant, market conditions for biofuels have also been disappointing. In 2024, the company had already written down about 800 million dollars on the biofuels plant. It is not yet clear how much more will be added.

It is not yet clear whether this decision will lead to job losses. When the company decided to halt construction, contractors and subcontractors were affected, but no permanent Shell employees were impacted.

Shell says it still has high expectations for biofuels as a solution for decarbonizing sectors such as aviation and shipping. The British company is already selling large volumes. Shell also stated that the Netherlands remains an important country for its operations.

Alderman Robert Simons, responsible for the economy and the port in Rotterdam, said that Shell’s decision is “exceptionally disappointing.” According to him, the construction halt illustrates a broader trend in the Port of Rotterdam. “The investment climate in the Netherlands is simply no longer competitive on a European scale,” he said.

“We are losing crucial investments due to a pile-up of extra national regulations and taxes,” said Simons. “Rotterdam is ready for sustainable progress, but without decisive national policy, we will miss the boat.” According to him, the government must step in “to turn the tide.”

Alderman Chantal Zeegers, responsible for climate, added that any delay in major investments slows down the energy transition. “Right now, speed and decisiveness are needed, or else not just our region, but the whole of the Netherlands will face unnecessary and unacceptable setbacks,” she said.

The Port of Rotterdam was also disappointed by the news. “Rotterdam now hosts the largest biofuels cluster in Europe, and this plant would have further strengthened it. Port of Rotterdam continues to support the development of this cluster and expects the biofuels market to become more favorable in the long term, given the increasing mandates for the use of cleaner fuels,” a statement from the port said.

Environmental organization Milieudefensie considers it “not a disaster” that Shell is halting construction of a biofuels plant in Rotterdam. According to the group, biofuels are often not sustainable, and Shell would be better off focusing on other investments that “comply with legal obligations.”

“That definitely means no more drilling of new oil and gas fields,” said Milieudefensie, which aims to compel Shell through the courts to reduce its emissions.