Rotterdam biofuels plant cancellation costs Shell €514 Million

Shell, the oil and gas group, announced in its third-quarter update that it will take a $600 million (€513.6 million) write-off on its Rotterdam biofuels plant, a project it has now permanently abandoned.

Shell announced early last month that the plant for more sustainable aviation fuel and renewable diesel in Pernis will not be built. Construction had been underway since 2022, but costs turned out higher than expected. At the same time, market conditions for biofuels deteriorated, likely caused by oversupply and narrow profit margins.

The project had already faced delays. The company had earlier recorded write-offs of several hundred million dollars, bringing the total financial impact to about 1.4 billion dollars.

Under the initial plan, the plant was to produce 820,000 tons of biofuels each year, split between sustainable aviation fuel and renewable diesel. The balance between the two could be adjusted based on market demand. According to Shell’s projections, the facility would have reduced carbon dioxide emissions by as much as 2.8 million tons annually when running at full capacity.

The facility was designed to process waste materials , including used cooking oil, animal fats, and various industrial and agricultural byproducts , as feedstock for fuel production.

Environmental groups have questioned the sustainability of biofuels in the past, saying they are frequently less eco-friendly than advertised and urging Shell to concentrate instead on other energy transition efforts.

Shell said in the same update that its gas trading profits rose sharply last quarter, with oil trading also delivering stronger returns. The company shared the figures in advance of its detailed quarterly report, set for release on October 30.