Brussels, 20 September 2011 – According to the most recent IEA scenarios, the demand for oil products might decline in the EU by 11 % by 2030 and up to 50% by 2050, but refined oil products will still represent a share of close to 30% of primary energy demand in the EU by 2030 and potentially 20% by 2050. This main conclusion, the need to secure supply of oil products in the projected low carbon future and the potential risks for EU jobs, technological leadership and carbon leakage associated with an accelerated disengagement of the refining industry in the EU, are outlined in the “Contribution to EU energy pathways to 2050”, published by EUROPIA, the European Petroleum Industry Association, representing the EU refining and marketing industry, together with key recommendations for the Commission Energy Roadmap.

The report, building upon elements articulated in previous EUROPIA White Papers on Refining1 and on Fuelling Transport2 and on the “Commission Staff Working Paper on refining and the supply of petroleum products in the EU3”, is the contribution of the European Refining and marketing industry  to the upcoming DG Energy “Roadmap for a low-carbon energy system by 2050”.

EUROPIA stresses in this document the great uncertainties that modelling the economy so far into the future carries, and emphasises that a roadmap looking so far into the future can only provide a strategic direction and not impose a single specific pathway. EUROPIA proposes a number of factors which should be considered when developing the Energy Roadmap 2050.

The report outlines demand trends to 2030 and 2050 which show that, despite potential declines of 11% in the demand for oil products by 2030 and up to 50% by 2050, refined products will still be needed in the EU with a share for oil close to 30% of primary energy demand in the EU by 2030 and potentially 20% by 2050. There remain significant technical and economic challenges to replace oil in many sectors of the economy. These scenarios nevertheless imply a significant reduction in EU refining capacity, although there is a great uncertainty as to the depth and the pace of the economy’s transition and the industry’s restructuring.

The report presents an analysis of the potential implications for the EU refining industry and the consequences of its potential decline for both the supply of essential oil products within the EU and the EU economy. It highlights the substantial risk of leaving many regions and probably countries without indigenous refineries which could result into a loss of security of supply through reduced logistics. It also indicates other potential negative impacts: a loss of EU technology leadership in fuel product specifications; emissions transfer and carbon leakage out of the EU; direct losses to the EU economy of € 240B taxes and duties, and of € 30B gross value added of the industry, over 1million jobs in the sector and other related sectors such as petrochemicals, and a major reduction in the distribution and marketing systems putting at risks the EU internal market for transport fuels.

The continued need in all scenarios for oil products in the EU beyond 2030 towards 2050 means that it is in the EU’s interest to implement policy and legislation that do not impose burdens on the EU refining industry which will force it to cut capacity faster than market demand decrease, but instead maintain the viability of the EU domestic refining sector throughout the transition to a competitive low-carbon economy.

Isabelle Muller, Secretary General, commented that “EUROPIA recommends that the EU and Member States thoroughly assess the risks associated with a disengagement of EU refining in Europe in terms of security of supply, competitiveness of the EU and national economies, and employment”.

EUROPIA makes six policy recommendations for consideration by EU and National legislators:

• The EU should focus on achieving the goals of the Climate and Energy Package for 2020

• The reality of global competition must be recognised in all policies and the impact on competitiveness be carefully assessed 

• The limits of EU-only action and the interdependence of the EU with the rest of the world must be recognised

• EU policy should not pick technology winners or pathways

• The EU-wide, national and regional impact of all measures should also be carefully assessed

• The EU should act as one and ensure a competitive and open internal market. 

The EUROPIA “Contribution to EU energy pathways to 2050” is available for download on www.europia.com 

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