Why transport fuels refined from oil will remain essential for the EU in the future
The European refining industry plays essential roles in transport and the petrochemical industry. Refined oil products supply 94% of the energy used for transport in the EU and close to 70% of the feedstock for the petrochemical industry. These are vital components of the European economy, and a healthy domestic refining sector is therefore indispensable for European energy security in an era of geopolitical upheaval.
The refining industry plays an important role in other specialised industries too. EU refineries produce bitumen for road construction and roofing, lubricants for transportation and industry and high quality petroleum coke for the metals industry. They also make waxes, solvents and a number of other products with global and regional demand for both industrial and individual consumers.
Many of these speciality products are produced by only a small number of refineries worldwide. Because of the need for supply chain integration, refineries are often found at the centre of regional business hubs. The small- and medium-sized businesses located around them are often highly dependent on the local refinery’s products. If the supplying refinery closes, many of these businesses will face difficulties, because it is often impractical or uneconomic to purchase and ship the necessary feedstock from further away.
Oil products have a high energy density making them ideal for transport
Liquid transport fuels, in particular oil-based products, offer a far higher energy density than alternative energy sources such as electricity, compressed natural gas (CNG) and hydrogen, giving them a massive advantage as transport fuels.
Electricity produces no tailpipe emissions, but today’s batteries cannot match the energy density of liquid fuels: liquid fuel contains around 100 times as much energy as an electric battery the same weight. The emissions generated when electricity is generated also need to be included in the balance to consider the “well to wheels” emissions of all fuels (see section later)
A progressive approach
Affordable mobility for people and goods is vital for the competitiveness of the EU economy, and is therefore essential for the key EU priorities of growth and employment. FuelsEurope strongly believes that the decarbonisation of transport should be progressive and based on realistic and attainable targets. It should also be carried out at the lowest possible cost for society, meaning it should be the result of market forces and be technology-neutral.
We believe moreover, as do many independent analysts, that oil products will remain the main energy source for transport till 2030 and beyond.
A reduction of up to 50% in fuel consumption of cars is considered to be feasible over the next 20–30 years, considering new passenger vehicles of constant performance and size (see diagram). This could be achieved by improvements in internal combustion engines and transmissions; the use of gasoline hybrids in the near-term; reductions in vehicle weight; and reductions in aerodynamic drag and rolling resistance.
There will of course be growing contributions from biofuels, gas (LNG and CNG), electricity and other energy sources, but the progressive introduction of sustainable and affordable alternative fuels should occur as a result of technology neutrality and market forces.