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Shell ponders biofuels plant to meet rising Asian aviation demand -Breaking

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© Reuters. FILE PHOTO – Royal Dutch Shell’s logo is displayed during the launch of a new hydrogen electrolysis facility at Shell’s Rhineland refinery near Cologne on July 2, 2021. REUTERS/Thilo Schmuelgen

Florence Tan

SINGAPORE, (Reuters) – Royal Dutch Shell, a global major, may set up a plant to produce biofuels in Singapore for the growing demand for sustainable aviation fuels. The head of the downstream division said Wednesday.

According to Shell Downstream Director Huibert Vigeveno, the proposed project of 550,000 tonnes annually (tpy), at Singapore’s Bukom island could yield SAF for major Asian hubs like Hong Kong International Airport or Singapore’s Changi.

He stated that “many airlines want to talk to us.” “I see tremendous growth in sustainable aviation fuel.”

He cited discussions with Asian airlines including Singapore Airlines (OTC), Cathay Pacific and Japan Airlines as evidence that there was a demand for SAF in Asia, not only in Europe but also the United States.

Shell is building an 820,000-tpy biofuels facility in Rotterdam to help it move away fossil fuels. This comes in response to shareholder pressure.

Shell has also partnered with KLM, an European airline to study the use of synthetic fuels in blending.

Shell’s goal is to generate 2,000,000 tpy SAF worldwide by 2025. But, renewable fuel is only 0.1% of the world’s jet fuel consumption.

Shell closed a Bukom crude-distillation unit to transit to low carbon fuel production. Vigeveno claimed that the reduction in refining capacities resulted from a decline of global refining margins.

He said that the proposed Singapore biofuels facility will be able to make renewable diesel as well as bionaphtha for petrochemicals.

He said that the alternative was much more value and Shell will be focusing its efforts on high-value products like bitumen, performance chemicals, and lubricants. These have a higher return on investment of over 20%.

Vigeveno noted that “Refinery margins may have improved slightly, but they are far from their former levels”, adding that the sector still has excess capacity.

The most challenging form of transportation is aviation to decarbonize.

He said that shipping, on the other hand, had many fuel options. These included switching to LNG, electricity and renewable diesel, as long as the infrastructure is in place.

Vigeveno suggested that hydrogen might be possible for shipping by the end of this decade.

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