A giant green gas plant being built in Rotterdam by Shell has been paused at the expense of the affected company to the tune of a billion dollars. It was to help airlines cut carbon emissions. With rising costs and occasional fees, Shell halted the undertaking, disappointing airways that wished for more sustainable fuels.

The Anglo-Dutch firm has brought to a halt the construction of a ginormous green gas factory in Europe, that has resulted in a loss of $1 billion. The Rotterdam factory was supposed to fill the diesel tanks of European airways and truckers with planet-friendly fuel. Barely weeks after stopping the development, shell came out saying it had done so on a Friday morning.

The move is a significant blow to the dreams of airlines to deliver low-carbon flights. Shell cited increased costs and weak pricing as the reason for canceling the plan. The manufacturing plant was supposed to supply 820,000 tons per year of biofuels. Half of that was to be renewable jet fuel, nevertheless, which is produced from waste vegetable oils and animal fats.

Airlines have all held out for sustainable jet fuel as a central component of their strategy to market flights as “low carbon.” It is all a part of its effort to reduce business impacts on the environment. Shell was seen as a crucial SAF supplier because of exposing its Dutch branch to launching the biofuel project in 2021. The production facility was expected to commence in 2025.

A claim not isolated in itself, the move by Shell is the latest in a line of blows to low-carbon projects by major energy companies. BP announced today that it would not invest in any new offshore wind projects. Its new boss, Murray Auchincloss, decided to shift towards fossil fuels. He also brought a halt to biofuel projects in Germany and the US.

Apart from suspending the green gas manufacturing unit, it recently announced a write-down of between $600 million and $800 million associated with the sale of the refining and chemicals hub in Singapore. Since Wael Sawan was appointed top govt of Shell in January 2023, he has been refocusing business enterprise strategy on oil and fuel in search of returns.

The updated approach differs from an earlier policy at Shell, where management had committed to reducing oil production each year until 2030. According to Wael Sawan, new assets brought on stream in the last year would add over 200,000 barrels of oil equivalent to peak production. These projects are part of a broader program due to come onstream with the aid of 2025. At their peak all projects combined will add more than half of 1,000,000 barrels of oil equivalent per day to Shell’s production.

On the whole, Shell stopping the Rotterdam green gasoline project and refocusing its priorities back to conventional oil and fuel depicts a gigantic struggle for the future of low-carbon aviation fuel. The move shook the company not only in financial terms but also in terms of the expectations of carriers and environmentalists looking toward a greener aviation sector.