Updates with SAF, HVO pricing and fundamentals, adds quote from Shell
Shell has abandoned a plan to build an 820,000 t/yr biofuels facility in Rotterdam, the Netherlands, saying it could not be competitive.
Shell temporarily halted construction at the facility in July 2024. The plant was planned to produce sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) — also known as renewable diesel — from waste feedstocks. It would have been the third largest HVO and SAF refinery in Europe, behind Preem and Neste's plants in the Sweden and the Netherlands, respectively.
"Following an in-depth commercial and technical evaluation to reassess the project's competitiveness, Shell will no longer proceed with the project," it said today. It already took an up to $1bn write down on the Rotterdam project. Shell has been streamlining its renewables production portfolio, and said most of its renewables activities were loss-making in the second quarter of 2025.
Prices for SAF in 2025 had generally held below recent years and Argus Consulting expects a structural surplus of SAF supply globally until mandates rise in the 2030s. More plants are scheduled to come online globally, but the EU plans to keep mandates steady at 2pc until the end of this decade, and fresh SAF mandates from other countries are not expected to soak up the surplus.
Spot prices in northwest Europe for HEFA-SPK — currently the primary commercial pathway for physical SAF — averaged around $1,939/t fob during January-September so far, compared with roughly $2,316/t during the same period last year. The HVO Class II fob ARA price averaged around $1,954/t and $1,626/t during the same periods.
HVO and SAF can be made from used cooking oil via hydrotreatment, but HVO requires fewer processing steps, making it usually the cheaper grade. But recently, HVO had fetched higher prices, supported by firm demand. An increase in spot demand for HVO has been supported by changes to renewable fuel ticket carryover rules. Tickets are tradeable credits primarily generated by the sale of biofuel-blended fuels and are used to help obligated parties meet mandates for the use of renewable energy in transport. The Netherlands cut its allowance from 25pc to 10pc for 2025 compliance, and Germany froze its carry-over, reducing flexibility for obligated blenders and prompting more near-term buying.
Protectionist trade tariffs have also been reshaping HVO trade. The EU imposed anti-dumping duties on Chinese biodiesel and HVO in February in addition to anti-dumping and anti-subsidy duties in place for HVO and biodiesel of US and Canadian origin. US-origin HVO flows to the UK were unaffected, but London began an anti-dumping investigation into US HVO in March, which could raise demand for European product instead.
