Shell Nederland Raffinaderij B.V., a subsidiary of Shell plc, has announced the temporary pause of on-site construction work at its biofuels facility in the Netherlands. The decision aims to address project delivery and ensure future competitiveness given current market conditions. This move will lead to a reduction in contractor numbers and a slowdown in activity to control costs and optimize project sequencing.
Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director, stated, “Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project.” He emphasized Shell's commitment to achieving net-zero emissions by 2050, with low-carbon fuels playing a crucial role in the company's decarbonization strategy.
Following the decision to pause on-site construction, an impairment review will be conducted for the project, with further guidance to be included in Shell’s second-quarter update note. The biofuels facility, designed to produce sustainable aviation fuel and renewable diesel from waste, had received a final investment decision in September 2021. Shell is one of the world’s largest energy traders and blenders of biofuels, with significant investments in low-carbon energy solutions, including e-mobility, low-carbon fuels, renewable power generation, hydrogen, and carbon capture and storage.
The company's commitment to sustainability is evident through its plans to invest $10-$15 billion across 2023-2025 to support the development of low-carbon energy solutions. Shell's joint venture in Brazil, Raizen, is a major producer of second-generation ethanol and the leading sugar cane ethanol producer globally.
The announcement contains forward-looking statements concerning the financial condition, results of operations, and businesses of Shell. It emphasizes the potential exposure of Shell to market risks and expresses management’s expectations, beliefs, estimates, forecasts, projections, and assumptions. The company acknowledges the known and unknown risks and uncertainties that could affect its future operations and cause results to differ materially from the expressed forward-looking statements.
In conclusion, Shell's decision to pause construction reflects its commitment to assessing the project's commercial viability and ensuring its competitiveness in the current market conditions. The company's dedication to achieving net-zero emissions and investing in low-carbon energy solutions underscores its long-term sustainability goals and commitment to decarbonization.