STATISTICAL REPORT 2019 Editor: John Cooper Copyright © Fuelseurope

Printed in Belgium - Designed by www.morris-chapman.com STATISTICAL REPORT 2019

Statistical Report 2019 5

Foreword

High quality, verified and reliable facts and figures Colour coding aims to help our readers browse are essential to support economic and political effectively through the document. Each colour analysis. For this purpose, FuelsEurope Statistical corresponds to a specific theme making browsing Report 2019 aims at providing a comprehensive between subsections user-friendly. We hope that set of statistics about the refining industry that you will find this Report useful. can be used by all stakeholders. • Oil & Energy This 2019 edition contains the most up-to-date information based on currently available data for • Refined Oil Products the sector. One should however note that some • Prices & Margins of the data is updated every 2 or 4 years. • Refining This includes global energy markets, oil products demand and international trade flows, fuel • Emissions specifications, prices and margins, the integration • Retail & Marketing Infrastructures with the petrochemical sector as well as the environmental performance of the EU refining industry.

John Cooper Director General 6 Statistical Report 2019

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FIG.1 WORLDWIDE ENERGY CONSUMPTION BY FUEL TYPE IN 2017 Source: BP Statistical Review of World Energy 2018

orl ropea io il cosptio is easre i illio toes oter els i illio toes o oil eialet toe O e

000 00

000 00 000 2 00 E 2 000 e 1 00

1 000 00

it illio toes a oil eialet toe 0

il atral oal clear ro Reeales as eer electricit

Oil remains the world’s dominant fuel, making up just over a Natural gas accounted for a record 23% of global primary energy third of all energy consumed. In 2017 oil’s market share declined consumption, while renewable power hit a new high of 4%. slightly, following two years of growth. Coal’s market share fell to 28%, the lowest level since 2004. Note: Please note that due to rounding, figures may not add up exactly to 100%. 8 Statistical Report 2019 - Oil & Energy

FIG.2 WORLDWIDE ENERGY CONSUMPTION BY REGION IN 2017 Source: BP Statistical Review of World Energy 2018

O O

OE OE

E- O l energy E- l energy E e e it toe E

E E

Global energy consumption grew by 2.2% in 2017, the highest increase since 2013. EU-28 share of oil remained unchanged (14%) and of natural gas (13%) gained 1 percentage point. OE The EU’s share of coal consumption stayed stable (6%). As presented in Figure 1, oil (50%) and natural gas (31%) remain the main energy sources in the EU (81%). Coal is the main energy source consumed in China and India, and O together, these two countries are responsible for 62% of global coal consumption. E l energy E- E e Note: Oil consumption is measured in million tonnes; other fuels in million tonnes of oil E E equivalent (Mtoe). Please note that due to rounding, figures may not add up to exactly 100%.

Oil & Energy - Statistical Report 2019 9

FIG.3 WORLDWIDE CRUDE OIL MOVEMENT IN 2017 Source: BP Statistical Review of World Energy 2018

it illio toes per ear S S R R R RS S Crude oil is an internationally traded commodity with trade flows R taking place all over the world. S There are two open and transparent markets - crude oil and refined R S 201 products - within which the European refining industry operates. 10 Statistical Report 2019 - Oil & Energy

FIG.4 WORLDWIDE REFINED PRODUCT DEMAND* AVERAGED 98.2 MILLION BARRELS PER DAY IN 2017, WITH EU ACCOUNTING FOR 13% Source: BP Statistical Review of World Energy 2018

OE O E

l O E E

E E EOE i i E n n E

Global demand for oil demand products increased from 96.4 *Inland demand plus international aviation and marine million barrels per day in 2016 to 98.2 in 2017. Although the bunkers and refinery fuel and loss. Consumption of European market is declining, it still remains the second biogasoline (such as ethanol), biodiesel and derivatives of largest in the world (15%) behind North America. China, coal and natural gas are also included. Middle East and Africa noted a continued growth in demand for refined products. Oil & Energy - Statistical Report 2019 11

FIG.5 WORLDWIDE REFINING SUPPLY/MARKET DEMAND BALANCES IN 2018 Source: Wood Mackenzie

E O E

E E

it illio toes per ear E & OE

RR R R R RS

The refining supply/market demand balance shows that Russia has a positive trade balance, which provides it with a most of the regions are dependent on imports to meet key role in supplying the demand from other regions. market demand.

Relatively balanced product demand and refinery throughput in the EU hides a large surplus of EU gasoline production and a significant shortage of diesel and jet production. 12 Statistical Report 2019 - Oil & Energy

FIG.6 EU TOTAL OIL DEMAND AMOUNTED TO 638.5 MILLION TONNES IN 2018 Source: Wood Mackenzie

O y O y stria tal eli atia laria itaia roatia eor prs alta ecia eterlas ear ola stoia ortal ila Roaia race Sloaia era Sloeia reece Spai ar See rela ite io E O ora Siterla re

O O O it illio toes per ear

EU-28 total oil demand amounted to 638.5 Mt in 2018, Among EU Member States that recorded the biggest fall representing a slight increase of approximatively 1.3% in the oil demand were the Netherlands (-5.17%), Czechia compared to 2017. (-3.9%) and Germany (-3.5%).

Most EU Member States recorded an increase in oil demand. Note: Please note that due to rounding, figures may not add up. Poland, Lithuania and Latvia with respectively 16.8%, 14.2% and 11.5%, show the biggest increase. Refined Oil Products - Statistical Report 2019 13

FIG.7 HISTORICAL DEMAND FOR OIL PRODUCTS IN THE EU IN 2018 Source: Wood Mackenzie

00 otal ea 200 00 otal ea 201 00 00

it illio toes per ear 200 100 0 200 200 2009 2010 2011 2012 201 201 201 201 201 201

Since 2008, we can observe a downward trend SS for oil products demand in the EU. Over the past 8 years, overall demand declined by around 12.5%. The downward trend is mainly driven by the S R RS decrease in fuel oil and gasoline demand, whilst RS RR SS diesel/gasoil and kerosene demand decreased only marginally. 14 Statistical Report 2019 - Refined Oil Products

FIG.8 AVERAGE REFINERY OUTPUT BY PRODUCT TYPE IN OECD EUROPE IN 2018 Source: OECD and IEA

OE O

E O OE

EOEE

EEO

A wide range of products, from transportation and industrial industry as well as waxes, solvents and other specialised fuels to chemical feedstock, are produced from crude oil. products. Fuels for transport represent the biggest share of EU refineries also produce many specialty products, such the production. as bitumen for road construction and roofing, lubricants for transport and industry, petroleum coke for the metal Note: Please note that due to rounding, figures may not add up. Refined Oil Products - Statistical Report 2019 15

FIG.9 ROAD FUEL DEMAND IN THE EU IN 2018 Source: Wood Mackenzie

20000

200000

10000

100000 ieselasolie ratio it illio toes per ear

0000

0 2 0 2 0 1 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 9 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1

S S R

The tax-incentivised dieselisation trend has significantly gasoline as well as a shortage of diesel production in the EU. contributed to a fundamental change in the EU’s road fuel However, since 2017 this trend is slowly reversing. Demand demand structure. The shift from gasoline to diesel began for diesel in the EU has deteriorated while gasoline continues some 25 years ago and led to a major demand decline for to improve. 16 Statistical Report 2019 - Refined Oil Products

FIG.10 ROAD FUEL DEMAND IN THE EU BY COUNTRY IN 2018 Source: Wood Mackenzie

era race ite io tal Spai ola eterlas eli stria See ecia Sustained by favourable excise taxes on Roaia diesel, the shift from gasoline to diesel over the past two decades led to a higher ortal demand for diesel as a road fuel in the vast reece majority of EU Member States. ar ila In some countries, such as France and Spain, rela the imbalance is far more pronounced as a result of even more favourable tax policies ear for diesel. laria Sloaia The continued growth in heavy duty eor transport in the EU, driven by the internal Sloeia market and external trade, has further contributed to spurring diesel demand. itaia roatia However, recent measures to rebalance atia taxation level of diesel with gasoline could stoia trigger a progressive shift in diesel demand. prs alta 20 1 10 - - 10 1 20 2 0

it illio toes per ear S S Refined Oil Products - Statistical Report 2019 17

FIG.11.a NET TRADE FLOWS FOR REFINED PRODUCTS IN-DEPTH LOOK AT GASOLINE (EXCLUDING BIO-COMPONENTS) Source: Eurostat

10000

10000 0

120000

0 100000

2 0000 20

0000 1

0000 10

20000

0000 0

2000 2001 2002 200 200 200 200 200 200 2009 2010 2011 2012 201 201 201 201 201

S S Overproduction of gasoline in the EU has been increasing over the years, despite S R a mild decrease in overall production volumes, due to a decrease in domestic consumption. This decreasing trend for domestic consumption, however, has RS S stabilised from 2013 onwards. This may in part be driven by a change in consumer S R preferences toward gasoline. 18 Statistical Report 2019 - Refined Oil Products

FIG.11.b NET TRADE FLOWS FOR REFINED PRODUCTS IN-DEPTH LOOK AT KEROSENE (EXCLUDING BIO-COMPONENTS) Source: Eurostat 0000

0 0000

0000 0

2 0000 20

20000 1

10 10000

0000 0

2000 2001 2002 200 200 200 200 200 200 2009 2010 2011 2012 201 201 201 201 201

S S For kerosene, the EU is import dependent, relying substantially on supplies from S R Russia and Asia. RS S S Refined Oil Products - Statistical Report 2019 19

FIG.11.c NET TRADE FLOWS FOR REFINED PRODUCTS IN-DEPTH LOOK AT DIESEL/GASOIL (EXCLUDING BIO-COMPONENTS) Source: Eurostat 00000

0 20000

200000 0

2 10000 20

100000 1

10 0000

0000 0

2000 2001 2002 200 200 200 200 200 200 2009 2010 2011 2012 201 201 201 201 201

S S For diesel/ gasoil, on the other hand, the EU covers most of its consumption S R through domestic production. RS S S 20 Statistical Report 2019 - Refined Oil Products

FIG.12 MAJOR GASOLINE AND DIESEL/GASOIL TRADE FLOWS TO AND FROM THE EU IN 2017 Source: Eurostat

E O E

it illio toes per ear

The major trade flows to and from the EU reflect the imbalance in gasoline/ S 201 diesel demand in Europe. As a consequence, significant excess gasoline SS 201 production capacity needs to be exported, whilst Europe became heavily reliant on imports from third countries/regions - especially Russia, the S R S 201 Middle East and the USA to meet regional demand for diesel and jet fuel. SS R S 201

North America was the traditional export market for gasoline surpluses in Europe, but the recent shale oil revolution and cheap energy enabled US refiners to increase their supplies for their internal market and compete on other export markets with EU refiners. Refined Oil Products - Statistical Report 2019 21

FIG.13 EU GASOLINE TRADING BALANCE USA REMAINS AN IMPORTANT EXPORT MARKET FOR THE EU Source: Eurostat

EXPORT

2017

2016

2015 -

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004 EUROPE NON EU 2003 REST OF THE WORLD 2002 USA 2001 e Please note that due to rounding, 2000 ﬁgures may not add up to exactly 100%.

0 5 10 15 20 25 30 35 40 45 50

Unit: Million tonnes per year

The US was the traditional export market for the structural other markets, primarily in Africa and Asia. The EU gasoline EU gasoline surplus. The shale oil boom has decreased surplus in 2017 remained high. North America and Asia were export opportunities to the US and forced EU refiners to find the two key export markets for the EU. 22 Statistical Report 2019 - Refined Oil Products

FIG.14 EU DIESEL/GASOIL TRADING BALANCE RUSSIA IS A LEADING EXPORTER OF GASOIL TO THE EU Source: Eurostat R R

201 201 201 201 201 2012 2011 2010 2009 200 200 200 200 200 200 2002 2001 2000 0 0 20 10 0 10 20

it illio toes per ear

R R After a significant increase of gasoil imports from the US between 2008 and RSS 2013, Russia recovered some of the lost shares in 2014-2017 to remain the leading gasoil exporter to the EU. This continued dependence of the EU on RS R imports of gasoil is the result of the diesel/gasoline imbalance it has been facing for many years.

Note: Please note that due to rounding, figures may not add up exactly to 100%. Refined Oil Products - Statistical Report 2019 23

FIG.15 EU JET FUEL TRADING BALANCE MIDDLE EAST REMAINS MAIN JET FUEL SUPPLIER FOR THE EU Source: Eurostat R R 201 201 201 201 201 2012 2011 2010 2009 200 200 200 200 200 200 2002 2001 2000

20 1 10 0 it illio toes per ear

RS R There is a substantial EU dependence on jet fuel imports originating mainly from the Middle East and to a lesser extent from Asia Pacific. S S Note: Please note that due to rounding, figures may not add up exactly to 100%. R 24 Statistical Report 2019 - Refined Oil Products

FIG.16a GLOBAL MARINE FUEL CONSUMPTION Source: Wood Mackenzie

00 000 The global demand for marine 201 534 fuel is mainly met by fuel oil 20 000 201 449 (75.5%). Gasoil only represents 24.5% of the market. 200 000 The new limits for sulphur 10 000 content of marine fuels drastically change the market with a S 100 000 massive demand for low sulphur distillates, which required major 65 739 refinery investments. 0 000 49 626 it osptio 1000 toes 0

200 200 2009 2010 2011 2012 201 201 201 201 201 201

FIG.16b MARINE FUEL CONSUMPTION IN THE EU Source: Wood Mackenzie

0 000 During the past years, the EU 51 885 recorded a rise in marine gasoil 0 000 consumption at the expense of fuel oil. The alternatives to 0 000 36 606 meeting the new International Maritime Organisation (IMO) 0 000 emissions limits are a switch to 0 000 S LNG or using scrubbers.

20 000 13 058 10 000 10 806 it osptio 1000 toes 0

00 00 009 01 01 01 01 01 2 2 2 2010 2011 2012 2 201 2 2 2 2 Prices & Margins - Statistical Report 2019 25

FIG.17 CRUDE OIL PRICE EVOLUTION Source: Energy Information Administration

10 R 201 10

120

100

0 it rope ret spot price

S ollar per arrel ot aerae 20

0 0 1 2 9 0 1 2 9 0 1 2 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

The EU Refining industry operates between two global, open After a decade of relatively low prices, oil started rising, leading and transparent markets: the market for crude oil and the to peaks just before the financial crisis in 2008. In March market for refined products. The main benchmarks are priced in 2016, oil prices fell sharply reaching closing prices below 40$. dollars. The price of crude oil is set on international spot markets Prices started to rise again in 2017 to reach 80$ in October and reported by designated agencies. It is an important marker 2018. for the global economy and is closely watched by businesses and policy-makers. 26 Statistical Report 2019 - Prices & Margins

FIG.18 BRENT VS WTI Source: Energy Information Administration

120

100

0 it erae aal price Sl

0 200 200 200 200 2009 2010 2011 2012 201 201 201 201 201 201

ret

Brent and West Texas Intermediate (WTI) are two of the main The lifting of the US crude oil export ban is one of the reasons crude oil benchmarks. Historically, these crudes, of similar that led to the narrowing of the spread between North Sea Brent quality, have traded at similar prices. Recent years saw Brent and U.S. West Texas Intermediate. trade at a premium to WTI, meaning EU refiners generally faced higher costs, though this differential decreased last year. Prices & Margins - Statistical Report 2019 27

FIG.19 REFINERS OPERATE BETWEEN TWO GLOBAL COMMODITY MARKETS: CRUDE MARKET AND REFINED PRODUCTS MARKET Source: Wood Mackenzie and Argus Media

120 R

100 S S 0 S R 0 S R

0 EU refining operates between two global commodity markets: the crude market and 19919919919919992000200120022002002002002002002009201020112012201201201201201201 the refined products market. The ‘crack it erae earl prices S ollar per arrel spread’ represents the difference between the cost of crude oil and the market sales price for refined products. 10 Generally, product prices rise with crude 120 prices, but the drivers of the difference are many. In historic terms, the profitability has 100 started to decline in a context of falling demand (2008). After a first, yet small, 0 improvement, in 2012-2013 a better period 0 started for refineries in 2015-2018.

The spread is generally tight, margins are 0 low and the industry is highly vulnerable to 20 the operating costs that must be deducted from the spread before profitability can be 0 considered.

99 99 99 99 999 000 001 002 00 00 00 00 00 00 009 010 011 012 01 01 01 01 01 01

it erae earl prices S ollar per arrel 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 28 Statistical Report 2019 - Prices & Margins

FIG.20 FUEL TAXES MAKE A SIGNIFICANT CONTRIBUTION TO MEMBER STATE NATIONAL INCOME Source: Eurostat, Wood Mackenzie and European Commission

SS 10 R 10 stoia 11 R R roatia 11

laria 10 itaia 10 11 R Roaia 10 S Sloeia 10 10 ola 9 prs 9 atia ecia reece ar ortal 10 11 10 S Sloaia S Spai 10 rela tal eor alta

stria eli era ila Taxes on fuels contribute on average to some 7% of Member State tax revenue. R race This significant contribution has to be put in perspective with the subsidies given to eterlas many competing alternatives to oil. This shows that replacing petroleum products by these alternatives would have significant consequences for Member States’ ear income. S See

*Figures are based on 2018 tax revenues Prices & Margins - Statistical Report 2019 29

FIG.21 TOTAL TAXATION SHARE IN THE END CONSUMER PRICE Source: European Commission

-P RSR 9 R S 0 eerans nie ing 0 inan egi eran 0 a FI reece rance 0 51 a rean SE nie ing snia 49 een EE 61 55 enia rance LV Maa DK 58 49 rean LT eerans 50 Prga 55 48 Prga NL IE PL enia UK DE eran 56 54 53 54 48 egi 61 BE ecia CZ snia 59 LU sria 60 52 SK 49 ecia 54 45 raia FR AT 51 HU enar RO inan 58 55 SI 55 50 raia HR 53 49 enar aia 51 reece BG sria IT ngar 52 46 aia ES 59 rs Maa 55 48 EL aia ain PT 50 ania ngar 54 aia iania 56 54 MT een rs iania CY erg Pan 54 49 Pan The price at the pump is driven to a large degree by tariffs and taxes and, on ain ania average, over half the cost of fuel at the pump represents taxes. The taxes garia on gasoline are generally higher than for diesel. This differential tax treatment garia erg has driven a demand shift over the past 20 years. Fuels taxes contribute substantially to Member States’ revenues.

Reference date: 18 March 2019 30 Statistical Report 2019 - Prices & Margins

FIG.22 BREAKDOWN OF AUTOMOTIVE DIESEL PRICES ACROSS EU (MARCH 2019) Source: Oil Bulletin, European Commission

See tal ite io race eli ila ear ortal reece eterlas roatia rela stoia era Sloaia ar Sloeia prs alta Spai R Roaia RS stria ec Replic it rice i ro atia per litre ola itaia laria eor

00 02 0 0 0 10 12 1 1

In most EU Member States, gasoline prices are generally higher the purchase of the crude, distribution and marketing costs, and than diesel prices due to the higher tax element. Taxes represent only a fraction contributes to the refiners’ income. the highest share of the price at the pump. The remainder are Prices & Margins - Statistical Report 2019 31

FIG.23 BREAKDOWN OF AUTOMOTIVE GASOLINE PRICES ACROSS EU (MARCH 2019) Source: Oil Bulletin, European Commission

eterlas ear tal reece ila race ortal See ite io alta era rela eli roatia stoia Sloaia Spai Sloeia atia stria R ec Replic RS eor ar it rice i ro prs per litre Roaia itaia ola laria

00 02 0 0 0 10 12 1 1

In most EU Member States, gasoline prices are generally The remainder are the purchase of the crude, distribution higher than diesel prices due to the higher tax element. and marketing costs, and only a fraction contributes to the Taxes represent the highest share of the price at the pump. refiners’ income. 32 Statistical Report 2019 - Prices & Margins

FIG.24 EVOLUTION OF GAS PRICES Source: BP Statistical Review of World Energy 2018

prices ro S ere er 10 S prices ro S ere er

it as prices i t

0 199 199 1999 2000 2001 2002 200 200 200 200 200 200 2009 2010 2011 2012 201 201 201 201 201

Since 2009, the US industry gained a significant competitive revolution. The 2017 prices in the UK were double the average advantage over the EU industry as a result of the shale gas of US gas prices. Prices & Margins - Statistical Report 2019 33

FIG.25 EVOLUTION OF END-USER ELECTRICITY PRICES FOR INDUSTRY Source: International Energy Agency

20 apa S rope 200

100 it otal price S

0 200 2009 2010 2011 2012 201 201 201 201 201 2 201

Over the past few years the US industry gained a significant Nevertheless, since mid-2014, EU electricity prices dropped competitive advantage as a result of low electricity prices. as a result of lower crude and gas prices and the gap with While European industry faced an 80% energy price increase US refiners has been significantly reduced. This situation is between 2005 and 2014, the price of electricity for the however, according to experts, not due to remain overtime and US industry only increased by 20% over the same period. the EU should face again higher electricity prices. 34 Statistical Report 2019 - Prices & Margins

FIG.26 COBALT AND LITHIUM CARBONATE PRICES Source: BP Statistical Review of World Energy 2018

100000 1000 RS R RS

12000 0000 10000

0000 000

000 it S ollars per toe 0000 it S ollars per toe

000 20000 2000

0 0 2000 2001 2002 200 200 200 200 200 200 2009 2010 2011 2012 201 201 201 201 201 2000 2001 2002 200 200 200 200 200 200 2009 2010 2011 2012 201 201 201 201 201

Cobalt production has grown by only 0.9% per annum since Lithium production is concentrated in Chile and Australia, 2010, compared to lithium production, which increased by with Chile holding the majority of proved reserves. For 6.8% per annum over the same period. Cobalt prices have cobalt, the Democratic Republic of Congo accounts for the more than doubled in 2017, while lithium carbonate prices vast majority of both production (66%) and proved reserves increased by 37%. (49%).

Note: *2000-2012 spot grade for cathodes, source US Note: **2000-2008 unit value, data series 140, source US Geological Survey. 2013-2017 min purity 99.8%, source Geological Survey. 2009-2017 FOB South America, source London Metal Exchange. Benchmark Mineral Intelligence. Prices & Margins - Statistical Report 2019 35 36 Statistical Report 2019 - Refining Refining - Statistical Report 2019 37

FIG.27 GLOBAL REFINING CAPACITY AS OF 2017 Source: BP Statistical Review of World Energy 2018

North Europe + America Eurasia Russia

Unit: Thousand barrels daily

Latin Middlee Asia America Africa East Paciﬁc

Refining is spread around the world and is a truly global business. stable at 17.3% in 2017, compared to 2016, remaining the third The share of Europe and Eurasia (Russia excluded) has remained largest refining region. 38 Statistical Report 2019 - Refining

FIG.28 REFINERY INVESTMENTS IN REFERENCE CASE 2018 - 2040 Source: OPEC World Oil Outlook 2018

00 R 0 RR S S RS 00

200

10 it 201 illio

100

0 in i e Ri ie in e n ei in i-ifi

All three categories of refinery investment requirements are $280 billion to investments in known projects and the remaining estimated at around $1.5 trillion in the period 2018 - 2040. The $305 billion to additions beyond firm projects. majority, around $900 billion will be dedicated to maintenance, Refining - Statistical Report 2019 39

FIG.29 REFINERY/STEAM CRACKER SITES IN EUROPE Source: Concawe and PetrochemicalsEurope

S RR

R RR S RR

A large number of refineries are integrated with, or located very Such interconnections show how refining is an intrinsic part of closely to steam crackers which produce the feedstock for the the industrial value chain and provides the basis for advanced petrochemical industry. high value products. 40 Statistical Report 2019 - Refining

FIG.30 78 MAINSTREAM REFINERIES WERE OPERATING IN THE EU, NORWAY AND SWITZERLAND AT THE END OF 2018 Source: Concawe

e e R efineie R efineie stria rela eli tal laria itaia roatia eterlas ecia ola ear ortal ila Roaia race Sloaia era Spai reece See ar ite io Refineie ora Siterla Refineie Refineie

In December 2018, there were 78 ‘mainstream’ (capacity above 2.5Mt/a) refineries in the EU, resol 0 l or 2ta Norway and Switzerland. Refining - Statistical Report 2019 41

FIG.31 EU, NORWEGIAN AND SWISS MAINSTREAM REFINERIES HAD 662 MILLION TONNES OF PRIMARY REFINING CAPACITY IN 2018 Source: Concawe and Oil & Gas Journal

Refining Refining R i R i stria rela eli tal laria itaia roatia eterlas ecia ola ear ortal ila Roaia race Sloaia era Spai reece See ar ite io Refineie iin nne e e ora Siterla Refineie iin nne e e Refineie iin nne e e

resol 0 l or 2ta

The 78 mainstream refineries operating in 2018 in the EU-28, Note: Refining capacity is expressed in million tonnes per year. Norway and Switzerland had a primary refining capacity of 662 Numbers may not add up due to rounding. million tonnes. This represents a decrease by some 95 million tonnes of primary refining capacity since 2010. Over the past *Status in December 2018 12 months the refining capacity in the EU has decreased by 2.75%, mainly due to a refinery closure in Spain. 42 Statistical Report 2019 - Refining

FIG.32 REFINERY CLOSURES IN EUROPE Source: Platts and Concawe

200

100 it apacit l

0 2009 2010 2011 2012 201 201 201 201 201

R R R S SR

resol 0 l or 2ta

Since 2009, out of the 100 refineries operating in Europe, 18 mainstream refineries were closed. Refining - Statistical Report 2019 43

FIG.33 OIL PIPELINES - MAP OF EUROPE Source: Concawe

inn a i een n A h T t L o A N B O T f C I E C o eini A f

N l u

G inn ni

i Rig en

engen ini e

ini iin in Re in e en e een ein e

nn n en egi

e e e eg ge eg Re ine

i i

i i ienn

ieenien ng ien e

ne en eni Rni

n ge i

ni ege n e n in eegin ei

e neneg gi n fi gi

Re Re

in ni

g i in eee

in e

RR R R R RRS R Pipelines are a long-established, safe and efficient mode of S R R S transport for crude oil and petroleum products. They are used both for short-distance transport (e.g. within a refinery or depot, R or between neighbouring installations) and long distances. RS Note: The map is based on publicly available information as An extensive network of cross-country oil pipelines in Europe well as the information gathered by Concawe and as such meets a large proportion of the need for transportation of should not be considered exhaustive. petroleum products. 44 Statistical Report 2019 - Refining

FIG.34 CAPACITY AND UTILISATION OF EUROPEAN REFINERIES Source: BP Statistical Review of World Energy 2018

00 100

90 00

0 it tilisatio rate 00 it apacit illio toes

200 200 2009 2010 2011 2012 201 201 201 201 201

RR R S R

Since 2007, the utilisation rate of EU refineries has been of European refineries reaching 86%. This rate is commonly oscillating between 84% to a lowest of 78% in 2013. In 2017, accepted as a requirement for efficient economic operations an increase of the rate has been observed with the utilisation of a refinery. Refining - Statistical Report 2019 45

FIG.35 QUALITY OF REFINERY WATER EFFLUENT OIL DISCHARGED IN WATER Source: Concawe

50 30.00

45 25.00 40

35 20.00 30

25 15.00

20 10.00 15

10 per reported throughput (g/tonne) 5.00 5 Unit: Total Petroleum Hydrocarbons discharged

Unit: Total Petroleum Hydrocarbons discharge (ktonnes/yr) 0 0.00 1969 1974 1978 1981 1984 1987 1990 1993 1997 2000 2005 2008 2010 2013 2016*

Total Petroleum Hydrocarbons discharge (ktonnes/yr) Total Petroleum Hydrocarbons discharged per reported throughput (g/tonne) *Preliminary ﬁgure for 2016

EU refineries have significantly improved the quality of refinery low levels relative to pre-1990; both in terms of the absolute water effluent in the last decades. The amount of Total amount of TPH discharged and the amount expressed Petroleum Hyrdrocarbons (TPH) discharged in effluents from relative to the volume of feedstock processed (throughput) reporting installations continued to decrease to extremely and the refining capacity of the installations. 46 Statistical Report 2019 - Refining

FIG.36 CHEMICAL INDUSTRY RAW MATERIAL USE Source: CEFIC and ICIS

100 90 0 0

0 0 0

10 0 200 2009 2010 2011 2012 201 201 201 201 201 201

The EU refining sector is closely integrated with the feedstock relies on refined products, such as naphtha and petrochemical sector. A large part of the petrochemical petroleum gases. Emissions - Statistical Report 2019 47 48 Statistical Report 2019 - Emissions Emissions - Statistical Report 2019 49

FIG.37 MARINE FUEL SULPHUR SPECIFICATIONS SULPHUR EMISSION CONTROL AREAS (SECAs) Source: IMO and Concawe

stalise s ossile s iese Ss

The limit for the sulphur content of marine fuels in SECAs is From 1 January 2019, vessels have been required to use fuel 0.1% since 1 January 2015. with a sulphur content not exceeding 0.5% while operating within the Coastal ECA, i.e. within China’s territorial sea (including The limit for the sulphur content of marine fuels outside SECAs the Hainan Coastal ECA) as well as Hong Kong, Taiwan and in the EU waters is set at: 0.5% for EU waters by 2020. Mainland China.

Since January 2015, all vessels in the Emission Controlled Area From 1 January 2022, vessels must use fuel with a sulphur (ECA) of the Baltic Sea, North Sea, English Channel and waters content not exceeding 0.1% while operating within the Hainan 200 nautical miles from the coast of US and Canada, have had to Coastal ECA. Vessels are required to use either a distillate, an reduce their sulphur emissions to 0.1%. alternate fuel or install a scrubber that removes sulphur from the exhaust after combustion.

The implementation date for the 0.5% global sulphur cap is set for 2020, the International Maritime Organization (IMO) Marine Environment Protection Committee decided at its 70th session in London. 50 Statistical Report 2019 - Emissions

FIG.38a SINCE 2000, PM EMISSIONS FROM EXHAUST REDUCED BY OVER 35% IN THE EU Source: European Environment Agency

00 00

0 0

00 00

20 20

200 200

it ilo toes t 10 10

100 100

0 0 2000 200 200 2012 201 2000 200 200 2012 201

2 erall trasport eissios 10 erall trasport eissios

2 ast eissios 10 ast eissios

PM emissions are continuously decreasing as the result of With the introduction of the Euro 6 standard, modern road cleaner diesel fuel, advanced engines and effective emissions vehicles with diesel engines are using highly efficient filters control technology. that remove 99.9% of PM. Emissions - Statistical Report 2019 51

FIG.38b SINCE 1990, FUELS ARE GETTING PROGRESSIVELY CLEANER RESULTING IN SIGNIFICANT EMISSIONS REDUCTIONS Source: European Environment Agency

000

000 00 000 00

000 00

2000 200

1000 100

0 0 1990 199 2000 200 200 2012 201 1990 199 2000 200 200 2012 201

000 0000 000 000

Unit: Kilo tonnes (Kt) 0000 000 2000 000 20000 000 1000 2000 10000

1000 000

0 0 1990 199 2000 200 200 2012 201 1990 199 2000 200 200 2012 201

Since 1990, the refining industry contributed to cleaner NOX (as NO2) - Nitrogen Oxides exhausts currently containing over 80% lower SOX, NMVOC, SOX (as SO2) - Sulphur Oxides and CO emissions. NOX emissions have decreased by over NMVOC - Non Methane Volatile Organic Compounds 60%. These significant improvements are the result of the CO - Carbon Monoxide partnerships with the automotive industry which aims at improving the fuel engine efficiency and leading to multiple environmental benefits. 52 Statistical Report 2019 - Emissions

FIG.39 MAXIMUM ON-ROAD DIESEL SULPHUR LIMITS Source: Stratas Advisors, March 2019

10 1 1 0 1 0 1 00 01 2000 2001 10000 o ioratio

Countries may apply lower limits for different grades, regions/ Detailed information on limits and regulations can be found at cities, or based on average content. www.stratasadvisors.com. Emissions - Statistical Report 2019 53

FIG.40 MAXIMUM GASOLINE SULPHUR LIMITS Source: Stratas Advisors, March 2019

0 10 11 0 1 0 1 10 11 00 01 00 o ioratio

FIG.41 GHG EMISSIONS BY SECTOR IN THE EU IN 2016 Source: European Environmental Agency

E EE

EE E E

Energy supply and industry accounted for almost 41.5% of GHG Note: Please note that due to rounding, figures may not add up emissions in the EU in 2016. Transport, including international exactly to 100%. shipping and aviation, supplied at 94% by oil refined products generates just under 24% of EU GHG emissions. Emissions - Statistical Report 2019 55

FIG.42 CO2 EMISSIONS TREND BY SECTOR IN THE EU Source: European Environment Agency

200

100 it issios o 1990 leel

0 2 0 2 0 2 1 1 1 1 1 1 0 0 0 0 0 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 9 9 9 9 2 2 2 2 2011 2 2009 2 200 2 200 2 200 2 2001 2 1999 2 199 1 199 1 199 1 1990 1991 1

R S RR CO2 emissions per sector have generally been declining since 2007. Industry (processes and SR S manufacturing) CO2 emissions decreased RSR R sharply over the period 2007-2012 and are now respectively 30% and 38% below the 1990 levels. RS R

RS CO2 emissions from transport have been steadily decreasing between 2008 and 2015. However, in 2016 we have seen a minor increase due to international aviation. 56 Statistical Report 2019 - Emissions

FIG.43 DECLINING EU SHARE

IN GLOBAL CO2 EMISSIONS Source: International Energy Agency, WEO 2018

EE E E E E eissios o orl total 2 it

201 E E 200

In 2017, the EU accounted for 9.7% of the global CO2 America, Russia and China are also forecasted to decrease emissions and this share is expected to be reduced to by 2040 where in other parts of the world emissions will likely

4.8% by 2040. According to IEA, CO2 emissions in North increase. Emissions - Statistical Report 2019 57

FIG.44 CO 2 EMISSIONS PER CAPITA/REGIONS Source: International Energy Agency, WEO 2018

2017 2040 14

10 8

6 emmissions per capita 2 4

Unit: CO 2

0 North Central & Europe Africa Middle East Eurasia Asia-Paciﬁc Southeast Asia America South America

Europe and North America are the two regions where CO2 emissions are expected to decrease. CO2 emissions are expected to slightly increase in the other parts of the world. 58 Statistical Report 2019 - Emissions

FIG.45 NOX CONTRIBUTION TO EU-28 EMISSIONS FROM MAIN SOURCE SECTORS IN 2016 Source: European Environmental Agency

- E

EE E

E E

NOX is a main contributor to the air quality problems found in 2016, some other sectors such as energy production and in a number of EU’s urban areas. Whilst the road transport distribution also largely contribute to the air quality challenge.

sector is the largest contributor with 39% of NOX emissions Retail & Marketing Infrastructures - Statistical Report 2019 59 60 Statistical Report 2019 - Retail & Marketing Infrastructures Retail & Marketing Infrastructures - Statistical Report 2019 61

FIG.46 ALTERNATIVE FUEL VEHICLES ACCOUNTED FOR 7.3% OF TOTAL PASSENGER CAR REGISTRATIONS IN THE EU IN 2018 Source: ACEA

lectricall-cargeale ter tan lectric eicles eicles

iesel eicles

lternatie uel eicles tal nuer registere in etrl eicles

ri lectric eicles

Overall in 2018, more than half of all new passenger cars Note: Please note that due to rounding, figures may not registered in the EU ran on petrol representing a 6.4 percent add up exactly to 100%. point increase compared to 2017. Diesel vehicles accounted for 35.9% loosing 8.2 percent point of the market share. The number of alternative fuel vehicles has been steadily increasing reaching 7.3% in 2018. 62 Statistical Report 2019 - Retail & Marketing Infrastructures

FIG.47 ELECTRIC VEHICLES AS A PROPORTION OF THE TOTAL FLEET IN THE EU Source: European Environment Agency

10000 20

120000

1 100000

0000 10 0000

0000 0 it Sare o electric eicles it er o electric eicles 20000

0 00 2010 2011 2012 201 201 201 201 201

R R S R R S SR R S

Electric cars are slowly penetrating the EU market. These passenger vehicles, the number of new electric car include battery electric vehicles and plug-in hybrid electric registrations in the EU has been increasing steadily over the vehicles. While the numbers are still small (in total about 224 last few years. 000) and their market share about 1.5% of new registered Retail & Marketing Infrastructures - Statistical Report 2019 63

FIG.48 NUMBER OF PETROL STATIONS IN EUROPE END OF 2018 Source: National Oil Industry Associations, FPS Economy, DG Energy

uer uer f etrl f etrl R statins R statins stria tal eli atia laria itaia roatia eor prs alta ecia eterlas ear ola stoia ortal ila Roaia race Sloaia era Sloeia

it er o petrol statios reece Spai ar See rela ite io ora Siterla re R

ers or 201 There were over 92 000 petrol stations in the EU, Norway, Switzerland and Turkey operating in 2018, fuelling some 250 ers or 201 Serice statios operatie million cars and over 34 million trucks. a ltiproct 64 Statistical Report 2019 About FuelsEurope

FuelsEurope is a division of the European Petroleum Refiners FuelsEurope aims to inform and provide expert advice to the EU Association, an AISBL operating in Belgium. This Association, institutions and other stakeholders about European Petroleum whose members are all 40 companies that operate petroleum Refining and Distribution and its products in order to: refineries in the European Economic Area in 2019, is comprised of FuelsEurope and Concawe divisions, each having n Contribute in a constructive way to the development of separate and distinct roles and expertise but administratively technically feasible and cost effective EU policies and consolidated for efficiency and cost effectiveness. legislation.

Members account for almost 100% of EU petroleum refining n Promote an understanding amongst the EU institutions and capacity and more than 75% of EU motor fuel retail sales. citizens of the contribution of European Petroleum Refining and Distribution and its value chain to European economic, technological and social progress. Statistical Report 2019 65 Disclaimer

We have made every attempt to ensure the accuracy and OPEC Disclaimer - The data, analysis and any other reliability of the information provided in this report. However, information (the “information”) contained in the World Oil the information is provided “as is” without warranty of any kind. Outlook is for informational purposes only and is neither Neither FuelsEurope nor any of its member companies accept intended as a substitute for advice from business, finance, responsibility or liability for the accuracy, completeness, legality, investment consultant or other professional; nor is meant to be or reliability of the information contained herein. We shall not a benchmark or input data to a benchmark of any kind. Whilst be liable for any loss or damage of whatever nature (direct, reasonable efforts have been made to ensure the accuracy of indirect, consequential, or other), which may arise as a result of the information contained in the World Oil Outlook, the OPEC use of the information herein. Secretariat makes no warranties or representations as to its accuracy, relevance or comprehensiveness, and assumes no Quoting from the review - The redistribution or reproduction liability or responsibility for any inaccuracy, error or omission, or of data whose source is Platts or Wood Mackenzie is strictly for any loss or damage arising in connection with or attributable prohibited without prior authorisation from either Platts or to any action or decision taken as a result of using or relying on Wood Mackenzie. the information in the World Oil Outlook.

IEA Disclaimer - Global Indicator Refining Margins are The views expressed in the World Oil Outlook are those of the calculated for various complexity configurations, each optimised OPEC Secretariat and do not necessarily reflect the views of its for processing the specific crude(s) in a specific refining centre. governing bodies and/or individual OPEC Member Countries. Margins include energy cost, but exclude other variable costs, The designation of geographical entities in the World Oil Outlook, depreciation and amortisation. and the use and presentation of data and other materials, do not imply the expression of any opinion whatsoever on the part Consequently, reported margins should be taken as an of OPEC and/or its Member Countries concerning the legal indication, or proxy, of changes in profitability for a given refining status of any country, territory or area, or of its authorities, or centre. No attempt is made to model or otherwise comment concerning the exploration, exploitation, refining, marketing and upon the relative economics of specific refineries running utilization of its petroleum or other energy resources. Nothing individual crude slates and producing custom product sales, in the World Oil Outlook shall be construed as interpreting or nor are these calculations intended to infer the marginal values modifying any legal obligations under any agreement, treaty, of crude for pricing purposes. law or other texts; or expressing any legal opinions or having probative legal value in any proceedings. 66 Statistical Report 2019 FuelsEurope Members Statistical Report 2019 67 FuelsEurope Boulevard du Souverain, 165 I B-1160 Brussels I Belgium Phone: +32 (0)2 566 9100 I Fax: +32 (0)2 566 9111