EU refining faces many challenges to remain competitive, meet consumer needs and provide the economic value highlighted. In particular,
- Shrinking demand in EU, due in part to reduced economic activity, but also more efficient use of oil products or substitution by, for example, biofuels or electricity in transport.
- Increasing EU gasoil/diesel/jet fuel demands and shrinking gasoline demands, creating a substantial imbalance with EU refineries’ output. The huge production surplus of gasoline has been exported for many years, much to the USA, but US gasoline imports needs are declining rapidly and this adds pressure to find suitable outlets.
- Growing international competition from Middle and Far East, Russian and a resurgent US refining sector, often with lower energy costs, advantages feedstocks and lower operating costs.
- Growing legislative burden on EU refineries, with most international competitors not subject to the same restrictions.
Refined products will be needed in the EU for the foreseeable future, requiring continued and often substantial investment in refining. The EU policy maker can help to promote such investment by providing a predictable and competitive policy framework in which competitiveness considerations are considered vital.