Shell PLC (LSE:SHEL, NYSE:SHEL) is expected to write down up to $1 billion in impairment charges after pausing construction of its 820-000-tonne-per-year biofuels facility in Rotterdam, the Netherlands.
Shell announced the on-site pause earlier this week, stating that it would undertake an impairment review of the plant.
“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.
Shell began work on the plant in 2021, but plans fell to the wayside as the oil supermajor reassessed its commitment to green energy plans.
In a second-quarter trading update published today, Shell said it expects non-cash post-tax impairments of up to $2 billion, with up to $1 billion arising from pausing on-site construction of its Rotterdam HEFA (Hydroprocessed Esters and Fatty Acids) facility.
Up to $800 million worth of impairments will also come from Shell’s Singapore-based chemicals & products segment.
Elsewhere in the trading update, Shell expects second-quarter production to total between 940,000 and 980,000 barrels of oil per day in the integrated gas segment and between 1.72 million and 1.83 million barrels of oil per day in the upstream segment.