Oil & Gas

Europe's biofuel industry has been hit hard by Shell's decide to temporarily to halt its sustainable aviation fuel project in Sweden, which was launched in 2021 in partnership with Vattenfall. This move follows Shell's earlier announcement in July 2024 to close one of Europe's largest biofuel plants in the Netherlands due to "economic feasibility concerns." These decisions come at a time when European biofuel manufacturers are struggling against a flood of cheaper Chinese imports, prompting calls for intervention from the European Commission.

The suspension of the HySkies synthetic fuel project in Sweden has led Vattenfall and Shell to seek new partners to continue their efforts in the Forsmark region. Vattenfall remains committed to its goal of a fossil fuel-free future and believes in the potential for decarbonizing heavy industry through carbon-free electricity, hydrogen, and carbon dioxide capture. Despite the setback, Shell still sees future opportunities in sustainable aviation fuels and aims to continue exploring viable projects.

Europe's biofuel market is in crisis due to the influx of Chinese imports, which has led to plummeting prices and jeopardized the industry's viability. European biofuel producers have accused China of using banned raw materials like palm oil in biofuel production, violating EU regulations. This situation has significantly impacted companies like Finland's Neste, whose share value has almost halved this year, highlighting the urgent need for regulatory action to protect the European biofuel industry.