Shell’s 2025 SAF Strategy: From Mega-Projects to Market-Maker

Shell’s Commercial SAF Projects: A 2025 Shift from Production to Partnerships

Shell has executed a decisive strategic pivot in its Sustainable Aviation Fuel (SAF) and biofuels business, moving from a capital-intensive primary producer to an agile market-maker, technology licensor, and strategic offtaker. This shift prioritizes financial discipline and de-risks its role in the energy transition by outsourcing production while retaining control over supply aggregation and market infrastructure. The contrast between its pre-2025 ambitions and its current actions illustrates a clear strategic realignment toward a more flexible, less capital-heavy model.

• Between 2021 and 2024, Shell’s strategy was anchored on building massive, self-owned production assets. This was epitomized by the 2021 Final Investment Decision (FID) for its 820,000 tonnes/year biofuels facility in Rotterdam, which was positioned to be one of Europe’s largest. However, this approach proved economically challenging, leading to a temporary pause on the project in July 2024 due to “weak market conditions.”
• The year 2025 marked a definitive turning point with the permanent cancellation of the Rotterdam project in September 2025. This decision, resulting in a $600 million loss, signaled a retreat from high-CAPEX production and cast significant doubt on Shell’s ability to meet its goal of producing 2 million tonnes of SAF annually by 2025 through its own assets.
• In place of direct ownership, Shell’s 2025 strategy focuses on securing supply through long-term offtake agreements. A prime example is the December 2025 deal to purchase the entire 145,000 tonnes/year output from a new SAF facility in Egypt being developed by Green Sky Capital, demonstrating a shift to enabling third-party production.
• Shell is also building market infrastructure to control transactions. In July 2025, it evolved its blockchain-powered Avelia platform into a multi-supplier model, transforming it from a proprietary tool into a marketplace for managing SAF certificates. This move positions Shell as a central intermediary in the decarbonization of aviation, generating value from transactions rather than direct production.

Shell’s SAF Investment Analysis: A 2025 Pivot from CAPEX to Offtakes

The investment data reveals a clear financial narrative. After making significant commitments to large-scale production facilities between 2021 and 2024, Shell’s financial activities in 2025 are dominated by the write-down of its cancelled Rotterdam project. Simultaneously, the company is facilitating third-party investment by providing the demand certainty needed for new projects to secure financing, as seen with the Al Mana Holding investment in Egypt.

Table: Shell’s Key Biofuel & SAF Investments and Financial Actions

Shell’s Global SAF Partnership Network: 2025 Strategy in Focus

Shell’s partnership activity has accelerated significantly, forming the core of its new asset-light strategy. The company is building a global ecosystem to secure supply, pilot new technologies, and aggregate demand. These collaborations span technology developers, fuel producers, logistics firms, and corporate end-users, positioning Shell as the central node in a complex value web.

Table: Shell’s Key Biofuel & SAF Partnerships

Shell’s SAF Geographical Footprint: Shifting Focus from Europe to Global Opportunities in 2025

Shell has shifted its primary focus from a concentrated European production base to a decentralized, global strategy of securing supply and building markets. The company’s geographic activities in 2025 reflect a pivot away from high-cost European production toward more economically viable and strategically located supply hubs worldwide.

• Between 2021 and 2024, Shell’s geographic focus was heavily weighted toward Europe, anchored by the planned 820,000 tonnes/year Rotterdam biofuels facility in the Netherlands. This single, large-scale project represented the core of its production strategy.
• The year 2025 brought a significant geographic realignment with the cancellation of the Rotterdam project. This marked a retreat from large-scale European CAPEX due to unfavorable market conditions and high costs.
• The new strategy emphasizes geographic diversification, highlighted by the major offtake agreement to secure SAF from a new plant in Egypt. This move establishes a key supply node in the Middle East, a strategic location for global aviation routes.
• Further partnerships in 2025 in Ireland (CATAGEN) and the expansion of the global Avelia platform to include partners in Spain (Moeve) and Japan (ENEOS) show a broader, more opportunistic approach. Meanwhile, previously announced plans for a facility in Convent, Louisiana, suggest North America remains a region of interest, likely due to favorable policies like the Inflation Reduction Act.

Shell’s SAF Technology Strategy: A 2025 Pivot from HEFA to Diversified Pathways and Platforms

Shell is moving away from a singular reliance on commercially mature but feedstock-constrained Hydroprocessed Esters and Fatty Acids (HEFA) technology toward a diversified portfolio that includes advanced pathways and market-enabling digital platforms. This shift diversifies technological risk and positions Shell to capitalize on a wider range of emerging solutions.

• In the 2021-2024 period, Shell’s primary technological bet was on the HEFA pathway, which was the basis for the massive Rotterdam project. While commercially mature, HEFA relies on feedstocks like used cooking oil and animal fats, which face supply constraints and price volatility.
• The 2025 cancellation of the Rotterdam HEFA plant signals a strategic de-risking from this single pathway. The focus has now intensified on enabling other technologies and platforms to reach commercial scale.
• Shell is now acting as a technology licensor through its Shell Renewable Refining Process, allowing it to generate revenue from the energy transition without direct asset ownership in every project.
• The most significant technological pivot in 2025 is the evolution of the Avelia “book and claim” platform. By upgrading it to a multi-supplier model, Shell is building market infrastructure, a digital technology, which is as critical to scaling SAF as the physical fuel production itself.
• Continued collaboration with partners like Licella (Cat-HTR), Everllence (e-SAF), and internal research into Lignin Valorization demonstrates an ongoing commitment to fostering a pipeline of next-generation fuel technologies.

SWOT Analysis: Shell’s Evolving SAF Strategy

Table: SWOT Analysis of Shell’s SAF Strategy (2021-2025)

2026 Outlook for Shell’s SAF Strategy: Scaling Offtakes and Proving the Platform Model

The most critical action for Shell is to demonstrate that its new, asset-light strategy of offtakes and platform-building can secure sufficient volume to meet both its commercial commitments and its ambitious 2030 climate targets. The success of this pivot will be measured by the company’s ability to translate its partnerships and digital tools into a scalable and profitable SAF business.

• The development and execution of the Green Sky Capital SAF facility in Egypt will be a key validation point. Successful delivery of the 145,000 tonnes/year supply by the targeted 2027 start date will prove the viability of the offtake-led model.
• The adoption and transaction volume on the multi-supplier Avelia platform is a critical metric to watch. Its growth will indicate whether a “book and claim” system can meaningfully aggregate global demand and accelerate SAF uptake without requiring physical supply at every airport.
• Expect Shell to pursue additional large-scale offtake agreements to bridge the significant capacity gap left by the Rotterdam cancellation. These deals will be necessary to progress toward its long-term supply goals.
• Future announcements regarding the planned conversion of the Convent, Louisiana, refinery will signal whether Shell views the U.S. policy environment, with incentives from the Inflation Reduction Act, as a more favorable location for its own future capital-intensive production.

Frequently Asked Questions

What was the biggest change in Shell’s SAF strategy in 2025?
In 2025, Shell executed a major strategic pivot from being a primary producer that builds and owns its own large-scale SAF facilities to being an agile ‘market-maker’. The new strategy focuses on securing supply through long-term offtake agreements with third-party producers, licensing its technology, and building market infrastructure like its Avelia platform, thus reducing its direct capital expenditure and risk.

Why did Shell cancel its large Rotterdam biofuels project?
Shell cancelled the 820,000 tonnes/year Rotterdam project due to what it described as ‘weak market conditions’ and high production costs, which made the massive capital investment economically challenging. This decision, resulting in a $600 million loss, signaled a definitive retreat from its previous strategy of high-CAPEX, self-owned production.

How does Shell plan to get SAF if it’s not producing it directly?
Shell plans to secure SAF by signing long-term offtake agreements with third-party producers. A prime example is the December 2025 deal to purchase the entire 145,000 tonnes/year output from a new plant in Egypt. By guaranteeing it will buy the fuel, Shell provides the demand certainty needed for partners to secure financing and build the production facilities.

What is the Avelia platform and why is it important to Shell’s new strategy?
Avelia is Shell’s blockchain-powered ‘book and claim’ platform for SAF. In 2025, Shell evolved it from a proprietary tool into a multi-supplier marketplace. This is crucial to its new strategy because it allows Shell to act as a central intermediary in the market, generating value from transactions and managing SAF certificates, rather than relying solely on the physical production and supply of fuel.

Will Shell still be able to meet its 2025 production target of 2 million tonnes of SAF?
No. Following the permanent cancellation of the massive Rotterdam project, the article states that Shell’s goal of producing 2 million tonnes of SAF annually by 2025 ‘through its own assets’ is now unachievable. The new strategy focuses on securing volume through partners rather than direct production.