European officials are trying to halt the decline of the continent’s oil refining industry even as the Czech government prepares an extraordinary tax on the country’s two refineries, both owned by Orlen Unipetrol, that critics warn could undercut the very sector Brussels wants to shore up.
Capacity has shrunk since 2009
Refining capacity across the European Union, the United Kingdom, Norway and Switzerland stood at 809 million tonnes per year in 2009, according to Concawe. It has since fallen to 658 million tonnes per year.
European Commissioner for Energy Dan Jørgensen said at the end of October that the trend must be reversed. “We must reverse this trend and ensure Europe has sufficient and flexible refining capacity, today and in the future,” he said. “It is not only a question of economic competitiveness but also of security.”
Jørgensen added that the Commission would work on lifting refining output within Europe. “We will work on increasing refining asset production in Europe. Industry has submitted several proposals that we must assess,” he said.
Diesel demand and security concerns
Domestic refineries still supply about 85 percent of the continent’s diesel demand.
Security concerns are also shaping the debate. Deputy Polish energy minister Wojciech Wrochna said Poland, bordering a war zone, needs guaranteed fuel supplies for its armed forces.
Czech tax draws criticism
In Czechia, the extraordinary tax planned for the country’s two refineries has drawn sharp objections from Orlen Unipetrol. Its head, Mariusz Wnuk, warned that every billion taken by the tax would be unavailable for refinery modernisation, operational safety and decarbonisation projects.
Not every official shares that alarm. Lithuanian finance minister Taurimas Valys said of such measures that risks are high while the potential impact is small.
Source: Concawe
