The Rotterdam plant, initially approved in 2021 and designed to produce 820,000 metric tons of biofuels annually, had its construction paused last year. Shell confirmed in early September that it had permanently cancelled the project, citing concerns about long-term competitiveness.
The move is part of a broader trend among fossil fuel majors retreating from earlier climate pledges and renewable energy investments. In February, BP announced plans to significantly scale back its renewables spending, while Norway’s Equinor also indicated a shift away from its previous clean energy ambitions.
Despite the biofuels setback, Shell presented a more upbeat outlook for its liquefied natural gas (LNG) business. In a quarterly trading update, the company raised its third-quarter LNG production forecast to between 7 million and 7.4 million tons, up from the 6.7 to 7.3 million range it projected in July. The new guidance also marks an increase from the 6.7 million tons produced in the second quarter.
Shell expects trading results from its integrated gas division to be “significantly higher” quarter-on-quarter, although the company, like most energy majors, does not disclose detailed figures from its trading operations due to competitive sensitivities.
In refining, Shell anticipates its indicative margin will rise to $11.60 per barrel in the third quarter, up from $8.90 in the previous period. This improvement follows a weaker second quarter marked by lower gas trading returns and soft oil prices, which saw net profits fall by nearly a third.
The company also flagged a $200 million to $400 million charge related to revised production estimates from Brazil’s Tupi fields, based on updated reservoir data. A spokesperson described the adjustment as routine business practice.
Meanwhile, Shell’s chemicals division is expected to post a quarterly loss as the company continues to review and possibly divest parts of that segment.
Despite challenges in certain business areas, analysts remain optimistic. “We see this as a strong update from the company, with improvement in operational indicators across its two key upstream divisions, as well as better trading quarter-on-quarter despite weaker market conditions more broadly,” RBC Capital Markets said in a note.