Save for later Print Download Share LinkedIn Twitter Europe’s refining industry is calling on the EU to develop a liquid fuels strategy to help balance the continent's move away from fossil fuels. The Ukraine war has exposed Europe's fragile energy security and dependence on Russian supplies. It has given European consumers a shock preview of the fuel price spikes that could characterize the energy transition unless policymakers adjust course, said John Cooper, director of Fuels Europe. “We have tens of millions of customers every day for petrol, diesel, jet fuel, marine fuel and all the specialty products ... Many of them will want us to be very active on climate action but they still need to get to work tomorrow,” Cooper told Energy Intelligence. The war and resulting sanctions have also given policymakers a taste of the possible backlash if carbon pricing is seen as just another form of fuel tax. Most European governments have been forced to cut fuel duty and other energy taxes recently to protect consumers from record fuel prices. Refinery closures during the pandemic, following years of underinvestment in what is seen as a dying industry, have seriously damaged Europe’s ability to cope without the 2.2 million barrels per day of crude and 800,000 b/d of diesel it normally imports from Russia. “Right now, we think maybe that was in some elements foolish. It’s certainly unusual for us to see policymakers calling for more oil … at the same time [as] setting a trajectory toward much lower consumption,” said Cooper.Current EU plans are for electric vehicles (EVs) to completely obviate the need for liquid road fuels, leaving biofuels, which are set to remain scarce, available only for the harder-to-decarbonize aviation sector. The refining lobby thinks this is a missed opportunity: Rather than banning the internal combustion engine, Fuels Europe wanted Brussels to ban just the emissions and recognize that second-generation biofuels can be just as effective in decarbonizing transport. That would also allow Europe’s refining industry to survive, at least in some form, as well as making use of existing fuels distribution infrastructure to help guarantee interim fuel supplies. Liquid fuels currently make up 93%-95% of Europe’s transport demand. Current EU proposals will treat EVs as carbon-free no matter how the electricity is made, whereas cars running 100% biodiesel would be treated exactly the same as vehicles running on 100% fossil diesel. Cooper argues that the lack of policy incentives to make biofuels will make it harder for the EU to meet its targets on sustainable aviation fuel use. These sometimes contradictory policies are included in the EU’s Fit for 55 package of proposals aimed at cutting carbon emissions by 55% from 2009 levels by 2030. The legislation is currently stalled in the European Council, but Cooper thinks Fuels Europe has already lost the argument over passenger vehicles and is now lobbying hard to make the same case for road haulage. Earlier EU legislation on first-generation biofuels backfired when it opened the door to rainforest-damaging palm oil imports.Refiners argue that a broader fuels policy would create the right business model for much needed investment in all advanced biofuels, including for aviation. “Diesel fuel is very similar to jet fuel and so investment in diesel for road transport is a no regret option,” argues Cooper. “If the haulage fleet does go to either hydrogen or electrification, you’ve got additional production of distillate type fuels that can go into aviation,” he explains. “A bit of that excitement around the ability to do renewable [fuels] would be very helpful,” he adds. Fuels Europe has already worked with its sister technical organization Concawe to develop its own Clean Fuels for All strategy. That envisages a much smaller European refining industry by 2050 making only advanced biofuels and synthetic fuels from a variety of waste feedstocks. “We may be only 40% of the size that we are today by 2050,” says Cooper. Low-carbon liquid fuels would be made using a variety of technologies ranging from relatively straightforward refining of used cooking oil or other waste fats to Fischer-Tropsch processing of municipal solid waste, fermentation of industrial waste and power-to-liquids efuels. Cooper says more work also must be done on carbon pricing, especially at the border so that European refiners can compete. In particular, Fuels Europe wants carbon pricing on imports and for its members to be able to export to markets that don’t have carbon pricing.