Biofuels are the latest green energy investment to disappoint, leaving the hopes of oil and gas giants pinned on liquefied natural gas, The Wall Street Journal reports.
Shell and BP both had high expectations of biofuels such as renewable diesel and sustainable aviation fuel, pouring billions of dollars into the market, but things have hit a rough patch.
Last week, Shell took a $780 million hit after pausing construction on a Dutch plant that was meant to become one of Europe’s biggest biofuel facilities. Meanwhile, BP has abandoned plans for two out of five potential biofuel refineries.
A glut of biofuels, particularly cheap Chinese imports, is squeezing profit margins.
Shell CEO Wael Sawan said on the company’s latest earnings call that liquefied natural gas is currently “the only credible solution that gives you both energy security and decarbonizes the energy system.” Arguably, solar power and onshore wind also meet these criteria, but not at the scale or level of returns that oil and gas bosses would like.
