Shell PLC (LSE:SHEL, NYSE:SHEL) has paused on-site construction work at a new 820,000-tonnes-a-year biofuels facility in Rotterdam to determine the commercial way forward for the project.
Contractor numbers will reduce on-site and activity will slow down, helping to control costs and optimise project sequencing, said a statement from the oil supermajor.
Shell added that it would undertake an impairment review of the plant, which is designed to produce sustainable aviation fuel and renewable diesel from waste, while the construction process is on hold.
“Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s downstream, renewables and energy solutions director.
The group decided to go ahead with the plant in 2021. Since then, Shell has been rowing back on its green energy plans under current chief executive Wael Sawan, sparking heavy criticism from environmental groups and some investors.
The oil and gas giant has even said it might switch its listing to the US where environmental plans face less scrutiny than in Europe.
“We are committed to our target of achieving net-zero emissions by 2050, with low-carbon fuels as a key part of Shell’s strategy to help us and our customers profitably decarbonise,” added Vigeveno.
“And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions.”
Shell added it will give further details of its plans for the biofuels plant with its second-quarter update this Friday.
At a Capital Markets Day in June 2023, Shell said it plans to invest US$10-$15 billion across 2023-2025 to support the development of e-mobility, low-carbon fuels, renewable power generation, hydrogen, and carbon capture and storage.