BP Plc is pausing a project to expand biofuels production at its Castellon oil refinery in Spain, according to a person familiar with the matter.
The plan to make sustainable aviation fuel was part of a EUR 2 billion ($2.2 billion) decarbonization initiative at the site on the country’s east coast, outlined in 2023. The decision to pause the biofuels investment was taken due to weaker-than-expected growth in that market, the person said, asking not to be identified because the information is private.
The company is trimming investment in low-carbon energy as part of a strategic reset, amid investor pressure. BP will continue to look at a biofuels expansion in Rotterdam, with the financial investment decision in that plant due by 2027, the person said.
BP declined to comment specifically on the Castellon project. A spokesperson reiterated guidance from February that it may take the final investment decision on one new biofuels plant before 2027 depending on the economics.
BP had at one time planned to build five new biofuels sites, but then shelved plans for new plants in Germany and the US and also paused a project in Australia.
The business of making cleaner aviation fuel from crops and used cooking oil has faced headwinds in recent months.
Industry pioneer Neste Oyj pushed back expansion plans in Rotterdam, months after saying that voluntary demand from airlines has been disappointing. Shell Plc also put what was to have been one of the region’s biggest projects on hold.
In Castellon, BP’s plans included expansion of so-called green hydrogen, made from water and renewable power. The person didn’t refer to the status of that project.
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