Shell announced on Tuesday that it had temporarily halted construction of a new biofuel production site in Rotterdam, citing 'current market conditions'.

The project, which had been launched in 2021, aims to produce so-called sustainable fuels (SAF) for aviation, as well as diesel made from waste.

In a statement, the oil group explains that it wanted to ensure the commercial viability of the new plant and its competitiveness in the current energy environment.

Some observers point out that biofuels are not yet economically viable, not only because they are more expensive than fossil fuels, but also because project development times are particularly long and production is limited by problems of biomass availability.

Following this decision, Shell explains that it expects to book an impairment loss, the amount of which will be communicated on the occasion of its second-quarter trading update, scheduled for July 5.

On the London Stock Exchange, Shell shares were little changed (+0.4%) on Tuesday morning following this announcement.

Copyright (c) 2024 CercleFinance.com. All rights reserved.