Shell Energy and Chemicals Park Rotterdam: The Energy Transition at the Pernis Refinery

Gregory Unruh; Fernanda Arreola

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Shell Energy and Chemicals Park Rotterdam: The Energy Transition at the Pernis Refinery

Gregory Unruh

George Mason University, USA

Fernanda Arreola

ESSCA School of Management, France

Volume 20: 2025, pp. 523-544; ABSTRACT

This case examines Shell’s strategic dilemma in transforming its Pernis refinery in Rotterdam into a sustainable energy hub. By late 2023, CEO Wael Sawan faces mounting pressure to balance aggressive decarbonization investments (€2.1-2.4 billion in carbon capture, green hydrogen, biofuels, and electrification) against shareholder demands for profitable returns. Shell operates under multi-level regulatory pressures including EU carbon pricing, Dutch climate mandates, and a 2021 court ruling (later overturned on appeal in 2024) requiring 45% emissions reductions. The case reveals stark financial realities: eco-efficiency investments generate 18-35% returns while transformational projects show negative NPV without high carbon prices or subsidies. Meanwhile, competitors face asymmetric regulations - U.S. rivals operate without federal carbon pricing while state-owned enterprises face minimal climate accountability. Students analyze whether “profitable decarbonization” is achievable and examine trade-offs between regulatory compliance, financial performance, competitive positioning, and climate outcomes.

Keywords: decarbonization strategy; carbon pricing; regulatory arbitrage; sustainable investment; stakeholder capitalism; climate litigation.