Yahoo Finance Shell (SHEL) Halts Non-viable Singapore Biofuel Project
Shell plc (SHEL) recently opted not to move forward with two initiatives that it was considering for the Singaporean production of base oils and biofuels. Per media reports, Shell asserted that it will remain active by supplying base oil, lubricants and biofuels to clients in Singapore and the surrounding regions. Meanwhile, it will be halting the exploration of two projects, a biofuels unit and a Group II base oil plant.
In late 2021, Shell revealed that a 550,000-ton-per-year project to create sustainable aviation fuel (SAF) for key Asian hubs like Singapore's Changi Airport and Hong Kong International Airport was under consideration. The company had anticipated making a final investment decision by the beginning of 2023.
However, unlike in Europe and the United States, airlines in Asia are not mandated to use SAF. Owing to the absence of a regulation, consumers are reluctant to pay higher prices for SAF, making it an unprofitable business endeavor in the region.
As one of the most difficult modes of transit to decarbonize, aviation generates 3% of global carbon emissions, making decarbonizing jet fuel an uphill battle. However, increased investment in SAFs has the potential to significantly aid the decarbonization of the aviation sector.
In Rotterdam, the Netherlands, the company is presently constructing a biofuels plant with an annual capacity of 820,000 tons with a targeted output of roughly 2 million tons of SAF annually by 2025.
The Singaporean project's suspension may be a short-term setback, but Shell's continuing investment in SAF keeps the ball rolling toward an aviation industry with a sustainable future.
Zacks Rank & Key Picks
Currently, Shell carries a Zack Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, Par Pacific Holdings Inc. PARR and Valero Energy Corporation VLO. CVI and PARR sport a Zacks Rank #1 while VLO carries a Zacks Rank #2 (Buy).
CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high-value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023.
Par Pacific, a growth-oriented company, combines knowledge of corporate financing with experience in the oil and gas sector. With 94,000 barrels per day of active refining capacity and a logistical system that includes an SPM, storage, barges, pipelines and trucking operations, PARR owns and manages one of Hawaii's biggest energy networks. Over the past 30 days, the company has witnessed an upward revision in earnings estimates for 2023 and 2024.
Valero Energy is a global manufacturer and marketer of transportation fuels and petrochemical products. With 15 refineries spread across Canada, the United States and the United Kingdom, it has a daily refining capacity of 3.1 million barrels. Over the past seven days, VLO has seen an upward revision in earnings estimates for 2023 and 2024.
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Shell PLC Unsponsored ADR (SHEL) : Free Stock Analysis Report
