Joint Research Centre

Transcription

1 Joint Research Centre The European Commission s in-house science service European refining in the context of EU policies: Refining Fitness Check 7th European Refining Markets Luis Delgado Head of Unit 19/09/2013 Serving society Stimulating innovation Supporting legislation

2 Policy Context "Stronger European Industry for Growth and Economic Recovery" Communication (2012): - Europe needs to reverse the declining role of industry in Europe to deliver sustainable growth and create high added value jobs and solve societal challenges that we face today - 80% of European exports and of private R&D comes from manufacturing - Industry should grow from 16% of GDP to 20% in 2020; reindustrialisation of Europe 2

3 Policy Context Objective and role of the Commission: Improve the framework conditions that reinforce the growth potential of EU industry. To stimulate competition for an efficient allocation of resources and a dynamic economy. To remedy to market failures. 3

4 Policy Context The Commission will contribute to enhancing European companies' competitiveness focusing on: - Investment and innovation - Research and Development Policy - Single Market - Trade Policy - Energy policy - Competition Policy - Environmental Policy 4

5 Policy Context Refining is a key sector of the EU economy: EU Refining Roundtable convened by Commissioner Oettinger, (May 2012) JRC Roundtable on scientific support to EU Refining Capacity, (Oct 2012) DG ENERGY Conference on EU Refining (Nov 2012) Creation of EU Refining Forum 5

6 Policy Context Commission policy goal is keeping a European presence in domestic refining: Able to adapt capacity levels to the economic realities of a European mature market Efficient in delivery high quality products competitive on the world markets Flexible to respond to changing conditions (and consumer preferences) on the world markets Environmentally friendly 6

7 Fitness Check Fitness check of the petroleum refining sector: Understand the impact and interaction of those policies that are most important for the competitiveness of a sector: Critical for the EU's industrial value chain Requiring new investments to be made in the face of strong international competition and EU legislation The fitness check is relevant for policy decisions on the future of the regulatory framework 7

8 Fitness Check Elements of the Fitness Check: 1. Quantitative assessment of impact of relevant legislation and policies: - Costs and expected revenues of the sector - Capacity to invest - Social and Environment 2. Qualitative assessment of effectiveness, efficiency, coherence and relevance of measures 3. Conclusions and recommendations: what are the gaps, inconsistencies overlaps? 8

9 Fitness Check Scope for fitness check: - Renewables Energy Directive - Energy Taxation Directive - EU Emissions trading system - Fuels Quality Directive - Directive on Clean and Energy Efficient Vehicles - Industrial Emissions Directive - Strategic oil stocks Directive - Marine fuels Directive - Energy efficiency Directive 9

10 Fitness Check Main questions: Effectiveness: objectives and achievements of legislation Efficiency: Costs and benefits Coherence: Degree of integration of policy measures covered by the Fitness Check Relevance: to what extent these polies address economic, social and environmental challenges 10

11 Quantitative assessment Draft Methodology: Linear Programming Model, OURSE (Oil is Used in Refineries to Supply Energy) 1. Represents the refining activity and the petrochemical industry (aromatic and olefin production) 2. Allows for oil product exchanges between the main regions of the world 3. Represents the world-wide refining industry through nine aggregated refining areas 4. One representative refinery with a reduced crude oil supply represents the refining structure of each area 5. Considers all technical complexities of the refining sector 11

12 Quantitative assessment Draft Methodology Input, exogenous variables: oil products demand (in terms of both quantities and quality specifications), crude oil availability, refining capacities, crude oil prices, and CO2 emissions restrictions and taxes Output endogenous variables: refineries throughput (or activity level), products blending, interregional flows (trade) of oil products, investments in refining units (technology of the refining processes), marginal costs of oil products (oil products supply prices), and pollutant emissions. 12

13 Quantitative assessment Draft Methodology Define baseline scenario (PRIMES) Scenarios consistent with the observed data (ex-post analysis), including the measures of all the implemented policies. Run OURSE model: Observed demands, projections and other necessary observed and projected inputs data are used in the OURSE model to simulate the corresponding endogenous variables, with and without a particular policy measure. The difference in outputs quantify the effects of the measure. Stepwise approach or reduced number of scenarios to assess the cumulative impact of policy measures 13

14 Quantitative assessment Draft Methodology 14

15 Quantitative assessment Draft Methodology Potential external factors to be considered in the modelling exercise: Different levels of economic growth of the OURSE regions, Changes in consumer preferences for diesel and gasoline vehicles Reduced US demand for the EU gasoline in the future. On-board scrubbers are installed on ships operating on residual marine fuel Development of non-conventional crude oil supply in North America Other factors to be determined 15

16 Fitness Check Planning 1. Dec. 12 Apr. 13: Preparation/adoption of mandate 2. May 13 May 14: Quantitative study 3. May July 14: Qualitative evaluation 4. Aug. Sept. 14: Conclusions and final report 16