Shell Ditches Large-Scale Biofuel Project in Netherlands Amid Fossil Fuel Focus

Shell has abandoned construction of a large biofuel plant in the Netherlands, citing weak market conditions and insufficient competitiveness. The project was intended to produce sustainable aviation fuel and diesel from waste. Shell is focusing on its fossil fuels business, drawing criticism from environmental activists. The abandoned project had the capacity to produce more than half of its output as biofuel.

Shell has announced the scrapping of its biofuels plant in Rotterdam, Netherlands, citing weak market conditions and insufficient competitiveness. The project, which was paused in July 2024, aimed to produce sustainable aviation fuel (SAF) and diesel from waste. The decision marks a significant setback for Shell's renewable energy initiatives and a shift back towards its fossil fuel business.

The biofuels plant was initially expected to produce up to 820,000 tonnes of biofuels, with half of the output intended for SAF. However, Shell's evaluation of market dynamics and the cost of completion led to the decision to scrap the project. Machteld de Haan, Shell's head of downstream, renewables, and energy solutions, stated, "As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive to meet our customers’ need for affordable, low-carbon products" [1].

This decision follows Shell's earlier cancellation of a sustainable aviation fuel project on Singapore’s Bukom Island in March 2023. The company has also watered down its emissions target, aiming to reduce the carbon emissions intensity of the energy it sells by 15-20% by 2030, down from a previous goal of 20% [1].

Meanwhile, LanzaTech, a leader in carbon management solutions, has achieved a breakthrough in SAF production. The company, in collaboration with the Mibelle Group and Fraunhofer Institute for Interfacial Engineering and Biotechnology IGB, has developed a technology to produce a sustainable palm oil substitute, which can also be used in the HEFA pathway for SAF production [2]. This innovation addresses the sustainability and supply challenges associated with conventional oil crops and waste oils typically used in SAF production.

Shell's focus on its fossil fuels business has drawn criticism from environmental activists, who argue that the company should be investing more in renewable energy projects to meet global climate targets. However, Shell maintains that it remains committed to low-carbon molecules, including biofuels, and is one of the world's largest traders and suppliers of biofuels, including SAF [1].

References:
[1] https://www.theguardian.com/business/2025/sep/03/shell-scraps-construction-of-biofuels-plant-in-rotterdam
[2] https://www.globenewswire.com/news-release/2025/09/02/3142597/0/en/LanzaTech-Mibelle-Group-and-Fraunhofer-IGB-Achieve-Technology-Breakthrough-with-Production-of-Palm-Oil-Substitute.html