Study on the potential evolution of Refining and Liquid Fuels production in Europe
Concawe engaged S&P Global Commodity Insights (SPGCI) to analyse the potential impact of the EU’s target to achieve net-zero emission by 2050 on the region’s refining industry and security of supply under two scenarios.
The focus of this study, which was undertaken in collaboration with the National Fuel Industry Associations, was to increase the granularity of the scenarios to better model the possible consequences of the different scenarios on EU+ countries, i.e. the 27 EU countries plus Norway, the UK and Switzerland. The objective was to assist stakeholders to better understand the possible implications of the energy transition by providing two different scenarios with regard to mobility and energy supply, with segregation by clusters of EU+ states. Both scenarios share a common basis for the transition of most economic sectors but differ on the decarbonization pathway of the transport sector:
The first, the “Max Electron Scenario” meets all requirements of the Fit for 55 package while surpassing the Heavy Duty Vehicles CO2 standards regulation requirements by assuming zero sales of ICE vehicles after 2035 and assumes an accelerated and unprecedented rate of electrification across various modes of transportation.
The second, the “More Molecule Scenario” has been derived from the Max Electron Scenario by relaxing the requirements of the LDV and HDV vehicle standards and allowing sales of some new internal combustion engine cars and vans after 2035 and postponing any electrification in the aviation and marine sectors to after 2050. In this way, this scenario achieves net zero in 2050 by complementing electrification with an increased use of low carbon fuels.
This study provides a deeper understanding to EU+ states on the subject, enabling them to take the required measures for a smooth and value-added transition to climate neutrality, without disturbing free market mechanisms, and without undermining the security of supply of fuels and other refinery products of key importance for the economic value chain of the EU+ states. It also addressed potential fuel supply issues that could impact fuel security during the energy transition phase.
The study comprised the following tasks:
- Task 1: Summary of key legislation – Section 3 of this report
- Task 2: Scenario modelling – Section 4 and Appendix A
- Task 3: Refinery Linear Programme modelling – Section 5
- Task 4: Supply modelling – Section 6
- Task 5: Security of supply analysis – Section 7
Access the report’s Digital Data File Report File Appendix here.