Something is up in the sustainable aviation fuel (SAF) sector. This week, Shell announced that it would “pause” its Rotterdam biofuels facility, which had been long-awaited by the industry.

The news comes just six months before the EU introduces a mandate for SAF: aviation fuel at EU airports must contain 2% SAF from 2025, requiring about 1.3m tonnes of SAF. The percentage must increase each year, to 20% by 2035 and 70% by 2050, for all flights originating in the EU.

Commercially, producing SAF in Rotterdam should make sense – on paper at least.

Shell said it would “temporarily pause on-site construction work at its 820,000 tonnes a year biofuels facility at the Shell Energy and Chemicals Park Rotterdam, to address project delivery and ensure future competitiveness, given current market conditions”.

“As a result,” it added, “contractor numbers will reduce on site and activity will slow down, helping to control costs and optimise project sequencing.”

And yes, there is a commercial focus to the decision.

“Temporarily pausing onsite construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s downstream, renewables and energy solutions director.

But as a more cynical observer noted: “Shell could be trying to ensure the continuity of the most profitable part of its business, that being oil and gas … SAF and biofuel are really the only ones that can’t be made using fossil fuel feedstock.”

Willie Walsh, head of IATA, has also blamed fossil fuel companies for the lack of options for SAF. He previously said: “Fuel producers have made billions from the industry and we need them to invest in SAF. The problem is their fuel; they could have improved their COfootprint. And we shouldn’t have to pay for it. It’s their problem.”

Airlines had been anticipating the extra availability of SAF in Europe from the Rotterdam facility. KLM told The Loadstar: “Alternative aircraft fuel is an important means of reducing the CO2 emissions of airlines throughout their entire lifecycle. That is why KLM is entering into contracts with suppliers worldwide to purchase this fuel.

“The more production, the better, as alternative aircraft fuel is currently four to six times more expensive than fossil kerosene, and prices will decrease with economies of scale. If more factories experience delays, this could eventually lead to market shortages and even higher prices for alternative fuel. This could put pressure on the ambitions regarding alternative fuel.”

However, it is thought that problems at Rotterdam included design complexity and scope for expansion, which led to delays in engineering. Shell must now review the variety of activities at the facility.

It follows the news that Fulcrum BioEnergy, a waste-based SAF producer, has also shut its doors.

But the problems do not seem to be sector-wide, prompting speculation over the real difficulties at Shell and Fulcrum.

This week the Civil Aviation Authority of China (CAAC) launched its first technical centre for SAF, to focus on standard setting and product research. China does not produce SAF commercially for domestic use, but biofuel firms are pouring more than $1bn into building plants to turn waste cooking oil into aviation fuel for export, as well as to meet domestic demand, once it is mandated by the government.

One such company is EcoCeres, which is producing fuel for export from China, and has a second refinery under construction in Malaysia – just across the straits from Singapore – which will produce 300,000 tonnes of SAF.

EcoCeres did not want to comment on Shell or Fulcrum BioEnergy, or the issues they might be facing, but CCO Jermany Baines told The Loadstar: “SAF is very much a nascent industry, but, pun intended, it’s really starting to take off.

“Just over the past year, we saw production triple. And there’s more and more production under construction, and about to really hit the markets.

“The challenge has been catching up, and how to scale the technology as fast as possible. And I think EcoCeres and other competitors have now demonstrated that we know how to do this. We can start producing really significant commercial volumes of SAF.

“Now it’s really up to consumers, governments and legislators to encourage a faster transition from fossil fuels. And I think that’s really the next big step.”

He added that the years of excuses had come to an end – except, perhaps, in Rotterdam.

Comment on this article

You must be logged in to post a comment.