LONDON (Reuters) -BP has stopped work on its Rotterdam biofuels plant, a company spokesperson said on Monday, marking the latest in a string of abandoned biofuels projects by oil companies such as BP and Shell in the face of weak demand.
Years of share price underperformance after an ill-fated foray into renewables in 2020 prompted BP to announce in February that it would shift spending back to more profitable oil and gas projects.
It also dropped its target to produce 100,000 barrels per day (bpd)
of biofuels by the end of the decade.
In recent months BP has halted plans to build standalone biofuels plants at its Kwinana site in Australia, paused work at plants in Lingen, Germany, and Cherry Point in the United States, leaving its Castellon site in Spain as a potential long-term option for further development.
As recently as 2023 BP said those plants and the Rotterdam project were expected to produce a combined 50,000 bpd by 2030. None of them has made it to a final investment decision.
This leaves BP's biofuels business focused on BP Bunge Bioenergia in Brazil, with capacity of 50,000 bpd of ethanol from sugarcane, and co-processing at existing oil refineries.
BP said in February that it produced about 10,000 bpd of biofuels through such co-processing.
"BP is stopping further work on development of a standalone biofuels production facility at our Rotterdam refinery. We are growing our co-processing capacity, maximising integrated value from our refineries, and will continue to evaluate biofuels options at our refining sites, favouring capital-light opportunities," the spokesperson said.
BP set itself an investment hurdle of 15% returns for biofuel projects, the same as for upstream oil and gas projects.
Having vowed to improve performance of its downstream activities, BP said in August that it had cut costs by $1 billion from 2023 levels and increased first-half retail earnings by 50%.
Shell said this month that it would not resume construction of its Rotterdam biofuel plant because it would be uncompetitive.
(Reporting by Shadia NasrallaEditing by David Goodman)
