New #EuropeanEnergyMarket – Paths towards compromise

| April 9, 2019

The European Parliament approved the legislative package aimed at providing the EU citizens with an access to clean energy (Clean Energy for All) and shaping the energy sector development in EU states towards further increase in share of renewables and cross-border ties strengthening, writes Colin Stevens.

“The approval of the new electricity market design brings closer the establishment of the Energy Union. The new market will be more flexible and will contain a greater share of renewable energy. An integrated EU energy market is the most cost-effective way to ensure secure and affordable supplies to all EU citizens”, said Climate Action and Energy Commissioner Miguel Arias Cañete.

According to the politician, the package will intensify competition and ensure significant and direct engagement of consumers into the energy transition process. He also added that the tacks proposed will prevent hidden subsidies for conventional capacities that hinder the achievement of climate targets. The funds released for infrastructure projects alone will amount to 750 million euros.

The automobile industry should provide another solution for achieving climate neutrality in the EU. From 2030 onwards, new cars in Europe will emit on average 37.5% less carbon dioxide as compared to 2021 target levels.

According to the European Commission, this step will allow saving more than 380 million tons of oil between 2020 and 2040.

Such economic measures are of particular relevance given the position of the Union as the world’s second largest oil and petroleum products market after the United States. The average demand for oil in Europe in 2018 was 15 million barrels per day.

Given this, imposing tight restrictions on carbon dioxide emissions by introducing new internal combustion engine types and creating artificial preferences to boost sales of electric automobiles look untimely, especially against the backdrop of dependence on conventional energy sources in a number of EU countries.

According to the European Automobile Manufacturers Association (ACEA), reducing emissions by 37.5% cannot be achieved given the current situation on the market. In this regard, this target is based solely on political motives and does not account for technological and socioeconomic indicators.

To bring closer the ecological neutrality of the automotive industry, it is necessary to ensure high efficiency of fuel and lubricants in reducing CO2 emissions – this was specifically noted in late 2018 by FuelsEurope.

This measure will make it possible to maintain energy mix sustainability in EU countries depending on conventional energy sources including oil. One of such countries is Bulgaria, where the oil sector provides substantial support for national economy development. Worthy of note in this regard is the decision taken by Bulgaria’s government in March to accept a request by Total, OMV and Repsol to extend by 109 days the permit held by the three companies for exploring for oil and natural gas in the 1-21 Han Asparuh offshore block in the Black Sea.

In effect, it is major international market players to be the key drivers of transition towards sectoral ecological neutrality by means of active introduction and implementation of the best industrial standards in production of clean and ecological fuels.

One of the examples of environmentally responsible approach towards the oil products production is set by Neftohim Burgas, subsidiary of LUKOIL in Bulgaria. Following its environmental protection policy, the company invests the best modern technologies aiming to reduce pollution levels at refinery sites.

Following the requirements of the national and European legislation, the refinery upgrades its existing and builds new facilities to improve the environmental situation in the region of activity. While investing in environmentally friendly production, LUKOIL also implements a program to remedy environmental damage caused by previous owners of the refinery prior to privatization.

For instance, a new waste heat boiler P-401 was built at the catalytic cracking unit at the refinery. Further, a filtering system based on new generation refining technology was installed as well, the company in Burgas being one of the pioneers in its application in the European Union.

The contribution of refineries, which today amount to around 90 in Europe, is becoming increasingly important and relevant for achieving ecological neutrality as they become included in transnational infrastructure projects along with renewables within Clean Energy for All.

While the industry is discussing this project, refining operators will gather in late April at the EU Refining Forum 2019, with additional ways to increase the eco-efficiency of business topping the meeting’s agenda.

When the package of measures to implement Clean Energy for All is approved by the Committee of the European Parliament on Industry, Research and Energy, as well as the plenary and the European Council, the EU states will have to ensure compliance with the new regulations by the end of 2020. It remains to be expected that in an effort to put into practice the political initiatives to improve the eco-friendliness of the energy market, national factors related, in particular, with the energy consumption structure by sources will be taken into due account.

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Category: A Frontpage, Energy, Energy market, Energy security, EU, European Commission, European Parliament, Featured Article

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