Europe's refining sector needs championing across the continent, Isabelle Muller, Secretary General of the industry body EUROPIA, said Monday at a conference in Brussels.
Acknowledging that the European Union had made steps towards understanding the significance of the sector to economic activity, Muller said that senior figures now needed to communicate the sector's importance.
Delivering the opening keynote address to delegates at the Platts European Refining Markets conference, Muller touched on the challenges new environmentally driven legislation would bring to the sector, and singled out key areas of concern among the raft of proposed legislation.
The proposed legislative moves, which set out to address Europe's energy needs up to 2020 and beyond, focus on a low carbon future and cover three key areas: sustainable growth, smart growth and inclusive growth.
"When we first started this process, oil was not mentioned at all," Muller said, but recent reports from the EU have started to address the sector's importance.
Quoting from the Energy Strategy 2020 initiative, published by the European Commission on November 10, 2010, the refining infrastructure was described as "a crucial part of the supply chain."
"Now it has been heard at the highest levels of the commission, it is vital that the message is passed through the EC and the governments of member states," Muller said.
FOR EUROPE'S REFINERS, CHALLENGES REMAIN AHEAD
"When we hear 'low carbon', we are a little worried... there are very many initiatives," Muller said, describing further attempts to legislate in the European refining sector as "not good news."
Increased legislation is taking a toll on European refining, which is already struggling to remain competitive in the face of highly flexible refining capacity from outside the region.
According to EUROPIA, 25 refineries in the continent are already closed, closing or up for sale -- around a quarter of the total refining facilities in Europe.
Referring to the proposal to cut Europe's carbon dioxide emissions by 60% by 2050 as "probably not realistic," Muller warned that Europe's position within oil markets would diminish as its energy needs contract.
"Europe represents a minor and decreasing proportion of the world's energy demand. As such, the role of the EU will decrease and the market power of Europe will decrease," Muller said.
Europe currently relies on being able to attract additional volumes from arbitrage movements, with a significant portion of low sulfur diesel and gasoil supplies coming from the US, South America, Russia and India, while much of its incremental jet supplies are sourced from the Persian Gulf and the wider Middle East.
While Europe remains a significant consumer of oil, the emphasis on legislation should remain on end-users and not on the under-pressure refining sector.
"End-use efficiency should be the first aim [of legislation] and that can be achieved... [Refining] is a strategic asset for Europe and a Eur240 billion business for its governments," she said.
"2050 will be low carbon, but it will not be no carbon. We have to ensure in 2050 [Europe] has secure, cost-effective energy supplies," Muller concluded.
EUROPIA counts around 80% of Europe's refining sector in its membership, and represents the industry at governmental level.
