Energy company Shell has decided to call off its planned sustainable aviation fuel (SAF) and base oil plant projects in Singapore.
“We can confirm that we are stopping the exploration of two projects – a biofuels unit and a Group II base oil plant in Singapore,” Shell told Reuters in an emailed statement.
The company said that it will continue supplying base oil, lubricants and biofuels to its customers in Singapore.
In late 2021, Shell announced that it was planning a 550,000 tonnes per year project to produce SAF in Singapore’s Bukom Island.
The project was intended to supply SAF to major Asian hubs such as Hong Kong International Airport (HKG) and Singapore’s Changi Airport (SIN).
Shell had planned to make a final investment decision for the project by early 2023.
However, Reuters revealed that there is currently no mandate for airlines to use SAF in Asia, unlike in Europe and the United States.
This lack of regulation means that customers are unwilling to pay higher prices for SAF. Without the requisite demand, Shell’s planned project is an unviable commercial venture in the region at the moment.
Shell is currently building a biofuel plant in Rotterdam with a capacity of 820,000 tons per year and aims to produce about 2 million tons of SAF by 2025.
