eef dinner-debate can industry thrive in europe ......2015/11/10 · close integration between the...
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EEF Dinner-Debate Can industry thrive in Europe?
Reconciling the EU’s climate and growth agendas Philippe Sauquet, President Refining & Chemicals, TOTAL
10 November 2015, Brussels
Close integration between the refining & petrochemical industries
Page 2
Oil products: increasing global demand but decline in demand in Europe
0
20
40
60
80
100
20
03
20
05
20
07
20
09
20
11
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25
World oil product demand Mb/d
+1%
North America
Asia OECD
China
Rest of Asia
Middle East
Rest of world
Europe
+1%
+2.1%
+1.6%
+2.7%
-0.9%
+2.4%
-0.9%
+0.0%
AIE NP Scenario
AIE 450 Scenario
92
European oil product demand Mb/d
Source : TOTAL estimates
0
2
4
6
8
10
12
14
162014-2025 -0.9%/ year
LPG +0.6%
Jet / Gasoil - 0.1%
Naphtha -5.0%
Fuel oil -5.3%
Others -1.2%
Gasoline -1.3%
Page 3
The world demand for chemicals will be growing
Source: Cefic Chemdata International
2003 2013 2030
China
Page 4
Oil and chemical products contribute to the EU’s economy & security of supply, and will continue to do so in the future
Page 6
Oil refined products as the feedstock for Chemicals contribute in avoiding GHG emissions in downstream markets
• Insulation materials
• Durable coatings for roof cooling
• Reflective paints
• Renewable energy generation
Houses with zero carbon foot print are today a reality
CEFIC and FuelsEurope recognise that climate change is real and warrants action
We support the efforts of the international community to achieve an ambitious and globally-binding agreement leading
to cost-effective GHG emissions reductions measures whilst avoiding carbon leakage.
Page 7
Reform of the ETS is key to the future of our industries
Phase II
Source: CONCAWE +xxx
= Cumulative ETS cost
2-3 bln €
Phase III 2013-2020
Phase IV 2021-2030
20 bln €
100% free allowances 10 €/ton 30 €/ton
Source: CONCAWE & CEFIC
Page 8
Asymmetric carbon cost maintains the threat of carbon leakage in the EU
Page 9
European deindustrialisation is no viable option to decarbonisation
Page 10
FuelsEurope and CEFIC recommendations for ETS reform
Maintain “carbon leakage” provisions to the refining and chemical sectors (including hydrogen and polymer production) as long as no global and binding agreement is implemented
Flexibility will avoid over- and under-allocation! The system should provide free allowances to the level of best installations in exposed sectors and allow them to grow
The system should be recalibrated to ensure that free allocation reflects the level of production (activity-based system)
Benchmarks based on the sectors’ real performances, rather than arbitrary flat rates Indirect costs should also be effectively addressed by the ETS reform Extension of innovation support to highly innovative, low-carbon projects is welcome but
should not be at the detriment of carbon leakage measures
• YES! EU climate and growth agendas can be reconciled!
• You can help us in tackling the risk of investment leakage, while creating added value, jobs and growth
Requests to Members of the European Parliament
Page 12
BACK-UP
Page 13
Future regulatory costs imposed on EU refineries could worsen the already significant competitiveness gap
Page 14
New challenges for European polymer plants
US ethane cracker Middle Eastethane cracker
EU naphthacracker
Polymer levelized costs @ 10% delivered to Europe $/t
At 100 $/bbl At 60 $/bbl
US ethane cracker Middle Eastethane cracker
EU naphthacracker
Full cost competitivity gap
Cash costs competitivity gap
Europe’s competitive position improves at 60 $/b although cash costs remain an issue
Cash costs (including freight)
Capex (including 10% IRR)
Page 15
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Refining sector vs. other industries
CDRBE CO2 02/11/2015
-800,0
-600,0
-400,0
-200,0
,0
200,0
400,0
600,0
800,0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Refining
P3
Delta Emissions Vs. Free Allocations MtCO2 eq
Sho
rt
Lon
g
P2 P4
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