Shell has scrapped plans to complete a large biofuels plant at the Pernis site in Rotterdam, saying the project would not be competitive enough to meet demand for affordable, low-carbon fuels.

Construction of the facility began in 2022 but was paused last year for review. After what the company described as a “commercial and technical evaluation,” Shell Nederland Raffinaderij said it would no longer restart building work.

Machteld de Haan, Shell’s president for renewables, said the decision reflected both market conditions and costs.

“As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive,” she said. “This was a difficult decision, but the right one, as we prioritise our capital towards projects that deliver both the needs of our customers and value for our shareholders.”

De Haan said Shell remained committed to biofuels and other low-carbon products. “We continue to believe that low carbon molecules, including biofuels, will underpin the future energy system,” she said.

The Rotterdam biofuels plant had been one of Shell’s flagship projects in Europe, aimed at producing advanced fuels from waste oils and other feedstocks. The company said related impairments would be disclosed in its quarterly results but gave no figures.

As yet it is not clear what the impact on jobs will be.