The decision to pause the biofuels investment was reportedly taken due to weaker-than-expected growth in that market.
This decision aligns with BP’s broader shift in strategy, as the company scales back investments in low-carbon energy following pressure from investors. Despite the pause in Castellon, BP remains focused on a potential biofuels expansion at its Rotterdam facility, with a final investment decision expected by 2027, the insider noted. BP’s spokesperson declined to address the Castellon project directly but confirmed guidance from February, stating: “We may take a final investment decision on one new biofuels plant before 2027, depending on economic conditions.”
Originally, BP had ambitious goals to establish five new biofuels facilities worldwide. However, it has already abandoned plans for new sites in Germany and the United States and paused a project in Australia. The Castellon pause marks another adjustment in these efforts. The sustainable aviation fuel industry, which relies on materials like crops and used cooking oil, has encountered challenges recently. Demand has not met expectations, affecting growth projections.
Other major players in the sector are facing similar difficulties. Neste Oyj, a leader in the industry, delayed its expansion plans in Rotterdam after noting weaker voluntary demand from airlines. Likewise, Shell Plc has postponed a significant project that was set to be one of the largest in the region. These setbacks highlight broader market trends impacting cleaner fuel initiatives.
In Castellon, BP’s decarbonization plans also involved expanding green hydrogen production, which uses water and renewable energy. The source did not provide updates on that aspect of the project. BP continues to navigate its transition toward sustainable energy while balancing market realities and stakeholder expectations. The company’s next steps in Rotterdam and beyond will depend on careful economic assessments in the coming years.
