Shell is facing a setback of at least €554 million due to the halt in the construction of a biofuel plant in the port of Rotterdam. The costs could potentially escalate to nearly €1 billion. Earlier this week, the oil and gas company announced that the plant, initially slated to be operational this year, is now expected to be completed by 2030.

In September 2021, Shell made a grand announcement regarding the construction of a large biofuel plant in Pernis. The plant was primarily intended to produce fuel for blending with aviation fuel, with the first batch expected this year. However, the company now cites both technical challenges in construction and unfavorable market conditions as reasons for the delay.

Shell intends to wait until airlines are mandated to increase their use of biofuels, as the current requirements are already being met by the available Sustainable Aviation Fuel (SAF) on the market. SAF is significantly more expensive than kerosene, leading airlines to avoid using it voluntarily due to competitive pressures.

The promotional campaign highlighting Shell’s commitment to building the sustainable fuel plant has concluded, according to a spokesperson. “I can’t imagine it will be used again anytime soon,” the spokesperson added.

The construction of the plant is being phased out, and the hundreds of workers involved will need to seek other assignments.