BP has cancelled plans for a major biofuels facility at its Rotterdam refinery, scoring another setback for Europe’s drive to scale advanced biofuels, as reported by Reuters. The energy giant confirmed on Monday that it will not proceed with the standalone plant and will instead focus on co-processing biofuels in existing refineries, which are cheaper, lower-risk options. A spokesperson said that the project no longer met BP’s capital return thresholds, which mirror those of its upstream oil and gas operations.
The Rotterdam project was part of a wider slate of facilities BP once said could deliver 50,000 barrels per day of biofuels by 2030. None reached a final investment decision. The company now produces around 10,000 bpd of biofuels through refinery co-processing and relies on its Brazilian joint venture with Bunge, which produces ethanol from sugarcane. Spain’s Castellon site is the only remaining large-scale project under review.
BP’s retreat comes just weeks after Shell scrapped its own biofuels facility in Rotterdam, a plant designed to produce 820,000 tonnes annually of renewable diesel and sustainable aviation fuel. Shell executives said the project had become “insufficiently competitive” and booked impairment charges of up to $1 billion.
The back-to-back exits by Europe’s two largest oil companies highlight the pressures facing advanced biofuels despite strong EU policy support. High feedstock costs, policy uncertainty, and shareholder demands for higher returns have eroded enthusiasm for multibillion-dollar standalone projects. Instead, both firms are steering capital toward oil and gas, where profitability is more reliable.
Together, the cancellations remove what was expected to be more than a million tonnes of new European capacity, prompting questions about how the European Union will meet its binding targets for sustainable aviation fuel, which require airlines to use at least 6% SAF by 2030 and progressively more thereafter.
By Tom Kool for Oilprice.com
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