The logo of British multinational oil and gas company BP is displayed at their booth during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023.
In February, BP announced a shift in strategy after several years of underperforming share prices and challenges in its renewable ventures. The company stated it would redirect spending toward more profitable oil and gas projects. At the same time, BP dropped its earlier target of producing 100,000 barrels per day (bpd) of biofuels by 2030.
Over the past year, BP has halted or delayed a number of projects. These include plans for standalone biofuels plants at its Kwinana site in Australia, Lingen in Germany, and Cherry Point in the United States. The Castellon site in Spain remains a possible option for future development. As of 2023, BP expected these plants, together with the Rotterdam project, to contribute a combined 50,000 bpd of production by 2030. However, none of the projects reached a final investment decision.
Currently, BP’s biofuels operations are centered on BP Bunge Bioenergia in Brazil, which has a capacity of around 50,000 bpd of ethanol derived from sugarcane. In addition, BP continues co-processing at its oil refineries, producing about 10,000 bpd of biofuels through this method as reported in February.
The spokesperson explained: "BP is stopping further work on development of a standalone biofuels production facility at our Rotterdam refinery. We are growing our co-processing capacity, maximising integrated value from our refineries, and will continue to evaluate biofuels options at our refining sites, favouring capital-light opportunities."
BP applies an investment hurdle of 15% returns for biofuels, which is the same benchmark it uses for upstream oil and gas projects. The company highlighted in its latest results that strong downstream performance had helped it surpass profit forecasts. BP also noted that it reduced downstream costs by $1 billion compared with 2023 and increased first-half retail earnings by 50%.
Shell has also adjusted its approach. Earlier this month, the company said it would not restart construction of its Rotterdam biofuel plant, citing concerns over competitiveness.
BP’s latest decision reflects a broader trend among energy companies reassessing large-scale biofuels projects while maintaining a focus on more integrated and capital-efficient opportunities within refining.
