European Refiners Commit to Climate Neutrality by 2050

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe's largest refiners have outlined a plan to ramp up the production of synthetic fuels to allow the transport sector contribute to the European Union's (EU's) goal to be climate neutral by 2050.

Industry group FuelsEurope, with members including Equinor (NYSE:EQNR), BP (NYSE:BP), Shell (NYSE:RDS-A), Eni (NYSE:E), ExxonMobil (NYSE:XOM), Phillips 66 (NYSE:PSX) and Total (NYSE:TOT), has committed to scaling up the production of synthetic fuels--or low-carbon liquid fuels (LCLF)--and outlined the necessary framework and supports needed to make road transportation climate neutral in the coming decades. It expects the transformation to be expensive, costing up 650 billion euros ($735 billion) to produce enough low-carbon liquid fuels to wean transport off oil by 2050. FuelsEurope members represent almost 100% of EU petroleum refining capacity and more than 75% of EU motor fuel retail sales. The refining sector employs 120,000 people directly and another 1.2 million in support industries. Industrial Info is tracking 38 European alternative fuel projects--most of them grassroot--worth more than $4.4 billion.

The group believe that low-carbon liquid fuels, which are described as sustainable fuels from non-petroleum origin with no, or very limited, CO2 emissions during their production and use, have "a strategic role to play" in particular in sectors such as aviation, maritime and heavy-duty transport. First blended with conventional fuels, these low-carbon fuels will progressively replace fossil-based fuels.

"Today we are setting out an ambitious pathway for enabling transport to contribute to EU's climate neutrality ambition by 2050, based on scale-up of low-carbon-liquid fuels supply and use, across several transport sectors," said John Cooper, director general of FuelsEurope. "With a clear societal and scientific case for far-reaching climate action, and taking into account the economic and social impacts of the coronavirus crisis, we respect that there will be no return to business as usual for the fuels industries. With the focus increasingly turning to recovery and new investments, we believe now is the time to start policy discussions with EU and national policy makers, and customer stakeholders to design the enabling policy framework for the deployment of these essential low-carbon fuels."

The refining sector, and power sector, is facing difficult times as oil demand is falling with the rise of renewables and increased restrictions on emissions from fuels and the rise of alternative fuels. The International Energy Agency (IEA) has defined an ambitious, yet realistic, New Policies Scenario (NPS) for 2040. Based on the IEA's projections, EU oil demand could decline by 60%, from 509 million tonnes of oil equivalent (Mtoe) in 2014 to 314 Mtoe in 2040. While significant, oil will still represent over 20% of the EU energy mix in 2040.

Cooper stressed, "Complementary to electrification and hydrogen technologies, low carbon liquid fuels will be essential throughout the energy transition and beyond 2050, ensuring security of supply, providing consumer choice and also building Europe's industrial leadership. We have worked very closely with our member companies over the last three years on the low carbon pathways for liquid fuels. This thinking has been the starting point for development of an extensive technology set by our industry which now has potential to be deployed across Europe to deliver low-carbon liquid fuels at substantial scale."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.