Shell Halts Rotterdam Biofuels Project After Cost Review

On Wednesday, Shell PLC SHEL disclosed that its subsidiary, Shell Nederland Raffinaderij B.V., has opted to halt plans to resume construction of its biofuels facility at the Shell Energy and Chemicals Park in Rotterdam.

After a thorough commercial and technical review of the project's competitiveness, Shell has decided not to proceed with it.

In July, Shell had temporarily suspended on-site construction at its 820,000 tonnes per year biofuels facility in Shell Energy and Chemicals Park Rotterdam, Netherlands.

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Machteld de Haan, Shell's president of Downstream, Renewables, and Energy Solutions, stated, "As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive to meet our customers' need for affordable, low-carbon products."

The company noted that the Netherlands remains a core market, with operations covering the entire energy value chain, from upstream oil and gas production to retail services.

Notably, in recent years, Shell has invested 6.5 billion euros in energy transition projects across the country.

These include advancing CO₂ storage through the Porthos CCS project, developing renewable hydrogen at Holland Hydrogen 1, and upgrading Shell Chemicals Park Moerdijk with new furnaces and electrified manufacturing processes.

In July, the company posted second-quarter earnings, outperforming profit expectations despite softer macro conditions and margin pressures across several segments.

During the earnings conference call, Shell's CFO reportedly indicated an expectation for crude oil trading activity to pick up again throughout the rest of the year following a muted second quarter.

Conversely, the CEO reportedly cautioned that weakness in the chemicals markets could persist for a long time.

Investors can gain exposure to Shell via Precidian ETFs Trust Shell plc ADRhedged SHEH and Abacus FCF Real Assets Leaders ETF ABLD.

Price Action: SHEL shares are trading lower by 0.37% to $73.52 premarket at last check Wednesday.

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