The EU refining industry has used a first-ever EU round table on refining, organized by the European Commission in Brussels on 15 May, to launch a fresh offensive on European climate and environment policy.
The round table was organized by EU energy commissioner Günther Oettinger at the instigation of four Socialist MEPs representing constituencies affected by the bankruptcy of oil refiner Petroplus earlier this year. Petroplus was Europe’s largest independent refiner and the sector has seized upon its demise as an example of the dramatic future in store for European refining.
If the scenarios in the Commission’s 2050 low-carbon roadmap for Europe are realized, this will “literally shape the end of the refining business as we know it,” warned trade association Europia on 15 May.
Europia represents 16 refineries and 80% of European refining capacity. It has repeatedly warned against what it views as a lethal combination of EU policies that are decreasing the demand for oil, failing to fix the growing imbalance between gasoline production and diesel demand, and burdening refineries with ever greater costs their global competitors do not face.
At the round table, Energy Commissioner Günther Oettinger reportedly agreed to undertake an impact assessment on the implications of EU decarbonisation policy for the global competitiveness of refineries. He also announced his intention to organize a second round table to discuss their situation in autumn.
Oil refining is probably the only sector that so far has been promised such an impact assessment.
At the 15 May meeting, Europia took the opportunity to reiterate its opposition against a planned intervention in the carbon market by EU climate commissioner Connie Hedegaard to boost the ailing carbon price (below €10 a tonne for over six months now).Interestingly, this planned intervention has garnered growing support among energy companies of late, including from oil giant Shell.
Hedegaard has pledged to issue a review of the EU Emission Trading Scheme (ETS) by July, with options for both immediate market intervention and longer term structural reforms.
Europia also criticizes the way in which products are taxed in Europe today, which it says is creating “an unmanageable mismatch” between gasoline production and diesel demand. EU efforts to reform energy taxation were recently rejected by the European Parliament, however, and member states have barely started discussing them.
The oil industry did manage to persuade the EU to delay by at least a year a decision on whether the EU will in future use oil from oil sands. The EU has been planning to treat oil from oil sands differently than conventionally produced oil, a plan which has had the oil industry up in arms for some time. Brussels has now agreed to a fresh impact assessment on this plan.
Europia stresses that it does not want state aid, but argues that it cannot respond successfully to changing market conditions if it is “handicapped” by EU policy. Europe’s energy security, trade imbalance, jobs, petrochemicals industry and future prosperity depend on a healthy refining sector, Europia insists. The problem is how to fit decarbonisation into this picture.