Shell expects to face up to $2 billion of impairments in its second-quarter earnings of 2024 related to a delayed biofuels plant under construction in the Netherlands and its chemicals facility in Singapore, Bloomberg reported.

The company stated that it will pause construction of a biofuels plant in Rotterdam to figure out the best way forward with the project. That will result in a non-cash post-tax impairment of $600 million to $1 billion.

When completed, the Dutch facility will produce sustainable aviation fuel and renewable diesel in anticipation of rising demand for low-carbon energy.

Shell has been improving the company’s performance and boosting investor returns through eliminating jobs, selling assets and changing the pace at which it seeks to cut its carbon emissions.

Shell has said it remains committed to achieving net zero emissions by 2050, while using shareholder capital in a “measured and disciplined way.”

Shell expects a further writedown of $600 million to $800 million in relation to the Singapore chemicals and products facility, which the company has agreed to sell to a joint venture between commodity trader Glencore Plc and Indonesia’s PT Chandra Asri Pacific.

Besides, the company’s gas trading results are set to be lower in the second quarter due to seasonal shifts in the market, while remaining in line with the division’s performance a year earlier, according to the statement.

Notably, the unit has been a big driver of profits for the company in recent years, with exceptional earnings at the end of 2023 and a strong performance in the first three months of this year.