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European oil refineries invest in green projects to ensure a long-term future

Refining executives in Europe said that European refineries have to invest in energy conversion projects because of the modern, complex competitors from Asia, Middle East, and Africa.

Tony Fountain, Essar's managing partner, said at the Argus global markets conference in London: "I guess we're all playing a game of last man standing to ensure we don't shut down."

European refineries are under pressure from environmental regulations and modern plants to increase production of cleaner fuels such as biofuels and sustainable aviation fuel to meet the regulatory demand.

The regulatory environment does not just tell us what we can do. This is more about what we must become in order to survive on this market. It's no longer a constraint. "It's almost like a business plan for us," said Lukasz Stupczewski. Executive director of crude supply, PKN Orlen.

Fountain announced that Essar will make a final decision about its blue hydrogen plant, which is the largest in the UK, at the beginning of next year. Essar has also received government support for a sustainable aircraft fuel (SAF), Stanlow, plant this year.

Fountain explained that "decarbonisation strategy" and "advanced fuel strategy" are things we believe we should do in order to move from the middle of the pack to the top quartile on the European ranking scale.

Strupczewski stated that PKN Orlen aims to increase the co-processing in order to increase SAF production and to invest in advanced biofuel capacity in order to meet the demand for these fuels in Europe, based on regulatory regimes such as RefuelEU Aviation, FuelEU Maritime and others.

Fountain stated that government support is important to prevent the UK becoming too dependent on imports if there are further closures.

He said that if he were the UK government, he would be concerned if the country had less than four refineries, as it would mean a high level of fuel imports. The UK now imports around 30% of the fuel it needs. Ed Osmond, Robert Harvey, and Enes Tunagur edited the article.

(source: Reuters)