EU refining faces challenges and opportunities in uncertain times

18 February 2013 17:42  [Source: ICIS news]

LONDON (ICIS)--There are both challenges and opportunities for Europe’s refining industry during uncertain times, a senior health and safety figure in the sector said on Monday.  

Troubles faced by the industry include declining demand for refined products, and an increasing European imbalance between mid-distillates and gasoline, with the former outselling the latter by three to one.

This is expected to increase to six to one by 2030, Chris Beddoes, director general of CONCAWE, said at the IP Week conference. CONCAWE is the oil companies' European association for environment, health and safety in refining and distribution.

This imbalance has resulted in Europe becoming increasingly dependent on sending gasoline to the US, and importing diesel.

However, US demand for gasoline is declining, particularly as the popularity of shale gas increases.

The European refining sector is also facing increased competition from new, more sophisticated Asian refineries.

Furthermore, EU legislation, which aims to ‘decarbonise’ the European industry by 80-95% of 1990 levels by 2050, is something that refiners in other regions do not have to contend with.

All of these factors have resulted in the sale, bankruptcy or closure of a significant number of EU refineries in the last three years.

However, there are some causes for optimism.

The efficiency of electricity generation has improved in EU refineries, Beddoes said, and air quality has also improved.

Furthermore, EU policymakers have now acknowledged the difficulties faced by Europe’s refiners, with ‘roundtable’ meetings taking place in which issues can be discussed.

Beddoes concluded that Europe will still need refined products for many years. Furthermore, the industry proved resilient and capable of change in past crises, he added.

By: Jo Pitches
+44 208 652 3214

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