• Study debunks oil industry claim that new fuel law would kill refineries

    The oil industry’s claim that a new EU law designed to cut emissions from petrol and diesel production would impose a ‘disproportionate administrative burden’ has been debunked by a new report (1). A study carried out by three consultancies (CE Delft, Carbon Matters and Energy Research Centre of the Netherlands) found that the administrative and reporting costs of new implementing rules for the EU’s Fuel Quality Directive would costs drivers less than half a cent on an average fill-up, or around 1 cent on a barrel of crude oil. Transport & Environment is calling for EU Member States to press ahead with approving the new rules without further delay.

    T&E programme manager Nusa Urbancic said:
    “The oil industry has been scaremongering that this law would add a dollar to a barrel of oil, and force refineries to shut (2); but they have published no evidence to back up that claim. This independent study shows that most of the reporting needed for this legislation is already being done and the administrative costs would be absolutely negligible.”

    “The Commission’s latest proposal actually makes compliance with the target cheaper, as it offers the oil industry a whole range of options for lowering their emissions, including reduced flaring, cutting imports of high carbon sources such as tar sands, and cleaning up production processes. It’s in EU’s and the industry’s interests to see that high carbon oil has no future, if we are serious about reducing transport emissions”.

    The Fuel Quality Directive (3), approved by the EU in 2009, sets a target for oil companies to reduce greenhouse gas emissions from transport fuel production by 6% by 2020. In October 2011, the European Commission proposed the detailed rules for implementing the targets which includes reporting requirements and so-called default values for the carbon emissions of different sources of fossil fuels. High carbon sources get higher carbon values unless producers show they have a cleaner product. For example, the default value for natural bitumen (tar sands) is 23% higher than the value given to conventional crude oil, and the default value for oil shale 50% higher. Canada, a major producer of tar sand oil, is therefore vociferously fighting the new EU implementing measures.

    A meeting of Member State technical experts on 23 February failed to reach agreement on the new rules. The Commission is now reviewing the next steps, with ministers of environment of the 27 EU countries expected to take a decision later this year.