Eu Refining Industry Proposes a Potential Pathway to Climate Neutrality by 2050
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EU REFINING INDUSTRY PROPOSES A POTENTIAL PATHWAY TO CLIMATE NEUTRALITY BY 2050 2nd Generation biofuels, Advanced biofuels (such as algae), Waste, Solar, Wind Table of contents EU refining industry proposes a potential pathway 4 to climate neutrality by 2050. By 2050, at the latest, every litre of liquid fuel for transport could be net climate neutral, enabling so the decarbonisation of aviation, maritime 6 and road transport. To meet the 2050 climate-neutrality goal, we believe Europe and its consumers need a plan where low-carbon liquid fuels and electrification/ 8 hydrogen in road transport sit side by side. Our proposed pathway is ambitious. The good news is our transformation 10 has already begun. 12 Policy principles 14 Annexe - EU Refineries: a story of transformation Copyright © FuelsEurope 2020, editor John Cooper Photo credits iStock: radebg , borchee, ChiccoDodiFC, panaramka, greenleaf123, NYC Stock Photo. Design by purebrand.be EU refining industry proposes Clean fuels for all a potential pathway to climate neutrality by 2050. The ambition of the European Union is to Our LCLF pathway shows how a 100 Mt CO2/y be climate neutral by 2050. The European reduction could be delivered in transport by refining industry supports the same ambition. 2035, equivalent to the CO2 savings of 50 million Battery Electric Vehicles (BEVs) on the road, Our industry is transforming, and we have and how it could contribute to EU’s climate developed a comprehensive potential pathway1 neutrality by 2050. of how we, together with our partners, can contribute to meeting the 2050 climate LCLF will play a critical role in the energy tran- neutrality challenge. sition and in achieving carbon neutrality in all transport modes, as the global demand for In concrete terms, based on the current competitive liquid fuels is expected to progres- technology knowledge and cost estimate, we sively increase. Alongside electrification and outline a potential pathway to 2050 to develop hydrogen technologies, LCLF will remain es- low-carbon liquid fuels (LCLF)2 for road, sential even beyond 2050, bringing important maritime and air transport. To deliver such benefits to the European economy and society. pathway an investment estimated between €400 to €650 billion will be needed. Major We stand ready to enhance our collaboration investments, in addition to those already with policymakers, our value chains and deployed, could start in the next years, with other partners to create the right conditions first-of-a-kind plants at industrial scale and policy framework for investments in new potentially coming into operation at the latest technologies to address the climate challenge. by 2025. 1 This pathway is based on the Commission Clean Planet for All 1.5 Tech scenario. 2 Low-carbon liquid fuels are sustainable liquid fuels from non- petroleum origin, with no or very limited net CO2 emissions during their production and use compared to fossil-based fuels. SOLAR: Low-carbon liquid fuels made from solar renewable energy are sustainable liquid fuels with no or very limited net CO2 emissions during their production and use compared to fossil-based fuels. 4 5 By 2050, at the latest, every litre of Outlined below is the pathway to enable by plants that could produce up to 30 MToe/y in 2050 all new and old road transport vehicles, 2030, with the first-of-a-kind biomass-to- including hybrid or ICE, to be climate neutral, liquid and e-fuel plants coming into operation liquid fuel for transport could be and aviation and maritime transport to no later than 2025. achieve 50% GHG emissions reductions. net climate neutral, enabling so the By 2050, availability of 150 Mtoe of LCLF would Based on the work of our industry to date, cut over 400 Mt CO2/y. Add Carbon Capture & decarbonisation of aviation, maritime we are ready to hit the ground running. This Storage (CCS) and the capture of emissions in pathway will require an estimated €30 to €40 biofuel production, and, in combination with and road transport. billion investment over the next ten years and electrification and hydrogen technologies, road the creation of a number of biofuel and e-fuel transport reaches climate neutrality. In concrete terms, our potential pathway includes: EU refining industry 2050 potential scenario AVIATION & ROAD MARITIME TRANSPORT (% GHG red. vs 100% fossil) TRANSPORT -100 Mt -50% -100% CO2/ year REDUCTION CO EMISSIONS CO EMISSIONS 2020 2030 2035 2050 2031 2033 2037 2039 2041 2043 2045 2047 2049 Up to 30 Mtoe Total volume LCF Investment Cumulative Up to 150 Mtoe 30 to 40 B€ Billion € (Transport) Total investment B€ 400 to 650 B€ 700 14 Mtoe 15 Mtoe Biofuels 0 B€ INCREASING UTILIZATION RATE 600 1st generation 15 Mtoe 500 5 Mtoe 10 Mtoe Hydrotreated 2.5 to 3 B€ 400 Vegetable Oils Up to 10 Mtoe 4 Mtoe 300 Lignocellulosic 25 B€ residues + waste Up to 4 Mtoe 200 1 Mtoe 100 efuels 3.3 B€ Up to 1 Mtoe 0 Lignocellulosic Refining 6 to 7 B€ HVO Estimated share * Installed CCS plants capturing emissions from CCS, Clean H 2 efuels of production levels renewable fuels processes would add negative emissions, which will allow to reach ~net zero CCS and Clean H2 emissions. 6 7 To meet the 2050 climate-neutrality Clean fuels for all goal, we believe Europe and its consumers need a plan where low- carbon liquid fuels and electrification/ hydrogen in road transport sit side by side. LCLF will smooth the deployment cost of LCLF will provide strategic security of supply, electric energy distribution and fast charging with typically 90 days of energy supply stored infrastructure in road transport, by providing within European facilities, since these fuels flexibility and alternative sources of low- can be stored in exactly the same manner as carbon energy using mainly existing facilities. fossil fuels. They will reduce the pressure and cost of Once the lead market of road transport achieving complete fleet turnover to ensure has spearheaded the development and climate neutrality, also supporting a just deployment of low-carbon technologies, the transition across Europe. new fuels will be available for the progressive decarbonisation of aviation and shipping, LCLF will give customers a choice between enabling the groundwork for cutting up to 50% low-carbon technologies, ensuring that carbon of CO2 emissions in aviation and maritime fuels neutrality is accessible to all, as LCLF will, by 2050. for the foreseeable future, provide a low-cost solution compared to the alternatives. Importantly, our pathway will also help maintain European industrial strength and jobs EU citizens demand more options in the in the automotive sector. We see our future transition to carbon neutral mobility, a in a transformation of our manufacturing 2019 survey with responses from 10,000 processes that will create European leadership European citizens has shown, and call on their in critical low-carbon technologies that will be governments to support the development of exported around the world. Essential industrial multiple clean vehicle technologies. solutions including green and blue hydrogen and CCS can also be advanced and scaled up for the benefit of many other industries. WIND: Low-carbon liquid fuels made from wind renewable energy are sustainable liquid fuels with no or very limited net CO2 emissions during their production and use compared to fossil-based fuels. 8 9 Our proposed pathway is ambitious. Clean fuels for all The good news is our transformation A combination of critical technologies must 2. Support mechanisms for investors, both be deployed in many plants across Europe to in terms of access to public and private has already begun. deliver LCLF at scale. funds, and of favourable fiscal treatment, as well as very low or zero taxation for These include sustainable 1st Generation low-carbon fuels, to facilitate fuel pricing biofuels, advanced biofuels, biomass-to- that is both socially acceptable and able liquid, hydrogenation of vegetable oils/waste & to make a business case for investments. residues, and e-fuels, to replace fossil CO2 by This also implies that the EU taxonomy biogenic or recycled CO2, as well as CCS and for sustainable activities must fully green hydrogen applied in refineries, to reduce recognise the strategic importance of the the carbon footprint of fuels manufacturing. transformation of the refining industry. The EU refining industry is already engaged 3. The mitigation of investor risk in a low-carbon transition. We are uniquely through robust, stable, science-based positioned to keep driving the development of sustainability criteria for all feedstock and these technologies, but we will not be able to processes, as well as ensuring the stability achieve this alone. of the regulations impacting feedstock availability, demand of LCLF, and capital Realistically, the success of our journey and operating costs. will also depend on investor confidence and political vision and engagement. Notably, Meanwhile, we are in close dialogue with with a view to building the necessary market multiple industries to build the necessary demand and start rolling out our investments value chains and assets. in the next years, we call on EU policymakers to launch a high-level dialogue in 2020 with a view Agriculture, chemicals, forestry, waste to creating a policy framework that enables: and recycling, including many SMEs, will participate in these value chains. Academia, 1. The creation of a market for LCLF, providing car and truck industries, aviation and an incentive to fuels with a lower carbon maritime, and customer groups will all have a footprint with respect to conventional role in developing the markets with the right ones. The CO2 standards in vehicles would definitions and parameters. Civil society at need to factor-in the actual CO2 benefits large will have to be engaged through an open, provided by LCLF compared to fossil fuels.