EU legislation challenges refining, petchem industries - Europia

13 October 2010 15:43  [Source: ICIS news]

BUDAPEST (ICIS)--Europe’s refining and petrochemical industries will be challenged by EU climate, environmental and energy legislation over the next decade, an official with the European Petroleum Industry Association (Europia) said on Wednesday.

“Future policy could help reconcile some [parts of legislation] and help retain viable refining and petrochemical industries,” said Europia deputy secretary general Chris Beddoes.

He was speaking at the World Refining Association’s (WRA) 13th annual Central & Eastern European Refining and Petrochemicals Roundtable in Budapest, Hungary.

Beddoes highlighted just how interconnected Europe’s refining and petrochemical industries are by noting that, of the 53 steam crackers in the EU, 41 were integrated with a refinery.

In addition, statistics showing more than 750,000 people employed in the EU’s petrochemical sector and 600,000 in its refining sector helped demonstrate why the two industries should work together to defend their interests.

“EU energy and climate policy must find a careful balance of three priorities if it is to retain viable refining and petrochemical industries in Europe – climate change sustainability, competitiveness and security of supply,” said Beddoes.

The most recent EU energy and climate package, including the emissions trading scheme (ETS) and the fuels quality directive, which was approved in 2008, was producing “implementation details that are only now becoming clear”, he said.

The ETS meant refining was exposed to a 25% loss of its free CO2 allowances, while an article in the fuels quality directive would require fuel suppliers to demonstrate a 6% reduction in the carbon content of fuels from 2010 to 2020, he added.

Europia would press for the ETS allocation of allowances to refining to be reduced gradually to achieve a 20% reduction to an acceptable benchmark by 2020, Beddoes added.

Despite EU moves to achieve sustainable growth through resource efficiency, International Energy Agency (IEA) forecasts showed that 80% of EU transport fuels and 30% of energy demand would remain oil-based in 2030, Beddoes noted.

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By: Will Conroy
+44 20 8652 3214

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