The chief of Royal Dutch Shell’s downstream division has said that the company may develop a biofuels facility in Singapore so that it is able to meet the growing demand for sustainable aviation fuels (SAF) of the region.

Shell Downstream Director Huibert Vigeveno told reporters that the proposed project has a projected output of 550,000 tonnes per year (tpy) and is proposed to be built on Singapore’s Bukom Island. He added that the new facility could generate SAF to serve key Asian airline hubs including Hong Kong International Airport and Singapore’s Changi.

“Many of the airlines are keen to talk to us,” he said. “I see a lot of growth in sustainable aviation fuel.”

He claimed that the demand for SAF was not limited to Europe or the United States, as he cited negotiations the company was having with Asian carriers such as Singapore Airlines, Cathay Pacific, Japan Airlines, and Nippon Airlines.

Shell is already developing an 820,000 tpy biofuels facility in Rotterdam, in the Netherlands, as a part of its effort to transition away from fossil fuels in response to pressure from governments and certain shareholders.

Shell is also testing the mixing of synthetic fuels with KLM, a European airline.

Shell plans to produce around 2 million tpy of SAF globally by 2025, despite the renewable fuel accounting for less than 0.1 percent of global jet fuel demand today.

Despite a rebound in global refining margins, Shell closed a crude distillation plant at Bukom to transition to low-carbon fuel production, reducing its refining capacity by half, according to Vigeveno.

According to him, the projected Singapore biofuels factory will be able to generate sustainable diesel and bionaphtha feedstock for petrochemicals.

“The alternative is much more valuable,” he said. The focus of the company is on development of products performance chemicals, bitumen and also lubricants which are considered as high value products and which provide a return on capital employed of more than 20 per cent, he added.

“Refinery margins have improved a bit, but they’re far from the levels they used to be,” Vigeveno said, adding the sector still had overcapacity.

One of the most challenging modes of transportation to decarbonize is aviation.

Shipping, on the other hand, he noted, has a variety of fuel possibilities, including LNG, electricity, renewable diesel, and, in the long run, hydrogen, providing the infrastructure is in place.

According to Vigeveno, hydrogen may be practical for shipment this decade.

(Adapted from ChannelNewsAsia.com)