Sunset on a refinery
"Oil refineries across Europe will be forced to shut as the West abandons fossil fuels in the race to net zero," – said BP CEO Murray Okincloss, commenting on the company's financial statements, The Telegraph reports.
He believes that older and smaller refineries in the EU will close or switch to biofuels as conventional oil refining becomes unprofitable due to a combination of soaring fuel taxes and falling demand from drivers switching to electric cars.
“So I would expect the least efficient refineries, which are the smallest, oldest around the world, to gradually close down as the world transitions over the next 10 to 30 years.”
BP has four refineries in Europe, three of which are already planned for conversion to produce biofuels including sustainable aviation fuel (SAF). Grangemouth Refinery in Scotland, which is owned by Ineos, employs 500 people but is scheduled to shut early next year.
Data from Fuels Europe shows that refining capacity in the EU, as well as in the UK, Switzerland and Norway, is already declining. Capacity has fallen from 781 million tonnes a year in 2009 to 677 million tonnes now. This means that Europe accounts for about 15% of the world's refining capacity - well behind the US with 21% or APAC with 36%.
Contradicting the statements reported above, BP said in June that it was scaling back this year’s plans for the development of new sustainable aviation fuel (SAF) and renewable diesel projects at its existing sites, pausing planning for two potential projects while continuing to assess three for progression, according to Oilprice.
“This is aligned with BP’s drive to simplify its portfolio, focusing on value and returns,” the UK-based supermajor said.
In June, BP declared to continue investing in deepwater fields in the Gulf of Mexico, and made a statement saying it was "scaling back" new biofuels projects.
The company has tempered its enthusiasm for its low-carbon program, and with it cut its climate commitments, adapting to an operating model that assumes continued high oil demand into the 2040s and beyond.
“Labour policy says oil and gas production in the North Sea will be with us for decades to come ... They launched a consultation process with the sector last night and we’ll be engaged deeply with them on that,” Okincloss said.
The oil giant's net profit for the second quarter of this year was higher than expected ($2.76 billion). The company's low-carbon and natural gas division, on the other hand, performed poorly, posting a loss of $0.1 billion.
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BP predicts the sunset of European refining adapting to an operating model that assumes continued hi
