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EU refiners appeal for clear rules to speed new technology investments

Brussels — EU refiners are already investing in technologies that secure lower CO2emissions but they need clear and long-term policy framework to make thoseinvestments viable, delegates at the eighth EU refining meeting in Brusselssaid Wednesday.

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"Europe can be the source for future low CO2 liquids," said OMV's seniorvice president Thomas Gangl, adding that the industry needs "the mostsupportive regulations".

OMV's wind to hydrogen project "is a key project to produce e-fuels",said Gangl adding that hydrogen is "immediately reducing CO2 numbers and needsto be supported". But the current EU renewables energy directive doesn'trecognize such use of hydrogen as part of carbon reduction measures.

The directive "should recognize everything we can do to reduce carbonintensity across the whole production sector," John Cooper, director generalof FuelsEurope told S&P Global Platts.

European refiners have been looking at expanding the use of lower carbontechnologies such as the use of plastic waste for fuel and petrochemicalfeedstocks, delegates at the meeting said.

But they may need "15-20 years of clarity" to make these investmentswork, Cooper said in his address to the meeting. "We need to be keptcompetitive through the transition," he added.

Statoil's Mike Serink, vice president for refinery planning called forenergy policy that "gives us a level playing field and time to innovate."

Companies like OMV and Repsol are looking to use plastic waste asfeedstocks for fuel but also as petrochemical feedstock. But such use shouldalso be recognized in the renewables directive.

Some 25 million mt of plastics end up as waste in Europe annually,according to data presented at the meeting. Waste plastics can be dissolvedand then cracked and OMV has already built a pilot plant in Schwechat. It canprocess 2 mt of plastic a day which "is small" but its economic viability isnot guaranteed.

"Accepting plastic waste as recycled carbon fuel will help a lot,"said Gangl.

Those and other new technologies, such as deploying coprocessing ofbiomass with fossil feedstocks, which Statoil is considering, could bring theEuropean refining sector to the forefront of the world technology.

"Europe was the creator of refining industry as it looks today and couldbe creator of the refining sector in the 21st century," Statoil's Serink said.

But the delegates have also appealed to the EU authorities to make surethe industry is kept competitive during this transition.

Repsol's refining executive director Francisco Vazquez appealed forpolicy framework allowing "to compete on a level playing field and to be keptcompetitive" so the refining industry doesn't "offshore to other regions".This might also "imply" introduction of import tax for some importantproducts, he added.

The refining sector should remain "competitive and innovative" because itis strategic for Europe, said Dominique Ristori, director-general of DG energyat the European Commission, adding that a long term strategy fordecarbonization is needed and work on it is ongoing.

--Elza Turner, elza.turner@spglobal.com

--Edited by Jeremy Lovell, jeremy.lovell@spglobal.com