By Aimee Look

Shell won't restart construction of a Rotterdam biofuels facility, as the global market for the fuel faces a yearslong slump.

The British energy giant said Wednesday that it conducted a commercial and technical evaluation and deemed the project no longer competitive.

"It became clear that the project would be insufficiently competitive to meet our customers' need for affordable, low-carbon products," Machteld de Haan, president of Shell's downstream, renewables and energy division, said.

Shell took a $780 million impairment when it temporarily paused on-site construction work at the energy and chemicals park--expected to become one of the largest in Europe--in July 2024. It started the project in 2022 and green-lit it a year prior.

Before construction was halted, the Rotterdam biofuels facility was expected to produce 820,000 metric tons of sustainable aviation fuel and renewable diesel from waste.

The move comes after Shell rival BP halted two biofuel projects and scaled back plans on others last year, amid rising competition from new imports, particularly from China. Sweden and Finland's decisions to reduce the minimum threshold for renewable-fuel concentration in fuel or heating oil also contributed to the glut of biofuels.

Shell said it invested 6.5 billion euros ($7.6 billion) in energy-transition projects in the Netherlands over the past few years, including a renewable-hydrogen plant and a carbon-dioxide storage project.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

September 03, 2025 04:24 ET (08:24 GMT)

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