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EU refiners appeal for clear rules to speed new technology investments

Brussels (Platts)--25 Apr 2018 921 am EDT/1321 GMT


EU refiners are already investing in technologies that secure lower CO2 emissions but they need clear and long-term policy framework to make those investments viable, delegates at the eighth EU refining meeting in Brussels said Wednesday.

"Europe can be the source for future low CO2 liquids," said OMV's senior vice president Thomas Gangl, adding that the industry needs "the most supportive regulations".

OMV's wind to hydrogen project "is a key project to produce e-fuels", said Gangl adding that hydrogen is "immediately reducing CO2 numbers and needs to be supported". But the current EU renewables energy directive doesn't recognize such use of hydrogen as part of carbon reduction measures.

The directive "should recognize everything we can do to reduce carbon intensity across the whole production sector," John Cooper, director general of FuelsEurope told S&P Global Platts.

European refiners have been looking at expanding the use of lower carbon technologies such as the use of plastic waste for fuel and petrochemical feedstocks, delegates at the meeting said.

But they may need "15-20 years of clarity" to make these investments work, Cooper said in his address to the meeting. "We need to be kept competitive through the transition," he added.

Statoil's Mike Serink, vice president for refinery planning called for energy policy that "gives us a level playing field and time to innovate."

Companies like OMV and Repsol are looking to use plastic waste as feedstocks for fuel but also as petrochemical feedstock. But such use should also be recognized in the renewables directive.

Some 25 million mt of plastics end up as waste in Europe annually, according to data presented at the meeting. Waste plastics can be dissolved and then cracked and OMV has already built a pilot plant in Schwechat. It can process 2 mt of plastic a day which "is small" but its economic viability is not guaranteed.

"Accepting plastic waste as recycled carbon fuel will help a lot," said Gangl.

Those and other new technologies, such as deploying coprocessing of biomass with fossil feedstocks, which Statoil is considering, could bring the European refining sector to the forefront of the world technology.

"Europe was the creator of refining industry as it looks today and could be creator of the refining sector in the 21st century," Statoil's Serink said.

But the delegates have also appealed to the EU authorities to make sure the industry is kept competitive during this transition.

Repsol's refining executive director Francisco Vazquez appealed for policy framework allowing "to compete on a level playing field and to be kept competitive" so the refining industry doesn't "offshore to other regions". This might also "imply" introduction of import tax for some important products, he added.

The refining sector should remain "competitive and innovative" because it is strategic for Europe, said Dominique Ristori, director-general of DG energy at the European Commission, adding that a long term strategy for decarbonization is needed and work on it is ongoing.

--Elza Turner, elza.turner@spglobal.com

--Edited by Jeremy Lovell, jeremy.lovell@spglobal.com




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