Earlier this week, the company said it will pause construction of a biofuels plant in Rotterdam in order to figure out the best way forward with the project. That will result in a non-cash post-tax impairment of US$600 million to US$1 billion, Shell said in a statement on Friday.
When completed, the Dutch facility will produce sustainable aviation fuel and renewable diesel in anticipation of rising demand for low-carbon energy. Yet the pace of the developed world’s shift toward net zero emissions has come into question lately, with right-wing populists who challenge the cost of the transition in the political ascendancy.
BP recently scaled back plans for biofuels production at its Cherry Point refinery in the US and its Lingen plant in Germany. Shell has said it remains committed to achieving net zero emissions by 2050, while using shareholder capital in a “measured and disciplined way.”
Shell expects a further writedown of US$600 million to US$800 million in relation to the Singapore chemicals and products facility, which the company has agreed to sell to a joint venture between commodity trader Glencore and Indonesia’s PT Chandra Asri Pacific.
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Shares of the company rose 0.3% to GBP29.08 ($50.16) as of 8:15am in London.
The company’s gas trading results are set to be lower in the second quarter due to seasonal shifts in the market, while remaining in line with the division’s performance a year earlier, according to the statement. The unit has been a big driver of profits for the company in recent years, with “exceptional” earnings at the end of 2023 and a strong performance in the first three months of this year.
