17 June 2011

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Background

Practical Information

 

Energy Council, 10th June 2011

The last Energy Council under the Hungarian Presidency took place in the morning of the 10th June 2011 in Luxembourg in presence of Energy Commissioner Günther Oettinger. The Council started with a presidency report on the state of play of the discussions on the proposal of the Commission for a Regulation on Energy Market Integrity and Transparency (REMIT). The Energy Ministers were invited to adopt Council Conclusions on the Communication of the Commission on an “Energy Efficiency Plan 2011”, presented on 8 March 2011.

The Ministers were informed on the outcomes of the discussion which took place at the Informal Energy Council on the Energy Roadmap 2050. This was followed by an oral report of the Commission on energy infrastructure investment needs and gaps, in response to the request of the 4th of February European Council and the 28th of February Energy Council.

The Commission debriefed the Energy Ministers on the state of play of the risk and safety assessment of the nuclear power plants which had been requested by the European Council on 25th of March, after the Japanese earthquake. An almost complete tour-de-table took place under the debriefing point of Hungarian Presidency on the Informal Energy Council of 3 May 2011 on the 2050 Energy roadmap, as German Minister used this opportunity to inform about the German government’s decision to move away from nuclear energy.

 

European Commission and Iraq sign Strategic Energy Declaration

Energy Commissioner Günther Oettinger and Deputy Prime Minister of Iraq Hussain al-Shahristani signed on 27 May in Brussels a Joint Declaration on an enhanced strategic energy partnership and gas delivery for Europe. Iraq commits to supplying gas over the long term to the European Union, through the Southern Corridor, while the European Commission provides access to its market for them.

 

This Joint Declaration is an important step in the diversification of Europe's energy supplies. Commissioner Oettinger said on the occasion: "I welcome the commitment taken by the Government of Iraq to supply natural gas to Europe through the Southern Corridor. As gas imports will increase in future, we need new supplier countries and Iraq is naturally amongst them".
 

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More information: Joint Declaration

 

Energy performance of buildings: Belgium called upon to comply with EU legislation

In the context of the fight against global warming and with a view to improving energy security, it has become essential to reduce energy consumption significantly, particularly in the buildings sector, which alone accounts for 40% of the EU's final demand for energy. EU legislation makes several provisions to allow energy savings in buildings to be made and for individual households to reduce their bills. The Commission has therefore issued a reasoned opinion to Belgium, a country which has not yet fully transposed EU legislation in this area.

The Commission may decide to refer Belgium to the Court of Justice if action to ensure compliance is not taken within two months.

 

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More information: Directive on the energy efficiency of buildings

 

Background

Study: Impact of the use of biofuels on oil refining and fuels specifications


The EU has agreed on achieving a 20% reduction in greenhouse gas emissions and an increase to 20% in the share of renewables in its energy mix by 2020. For the transport sector, a 10% target for the use of renewable energy including biofuels was also agreed, tied to a set of sustainability criteria. A substantial increase in biofuels consumption, from the level of 2.6% of EU road transport fuels in 2007, is therefore needed to meet the 10% EU target. This may have an impact on fuel specifications within as well as outside the EU.

Increasing biofuel supply implies reduced oil refinery processing, potentially leading to reduction of existing refining capacity and affecting the entire oil industry supply chain both in the EU and third countries.

The study therefore aims to assess:
 

  • The impact of increased consumption of biofuels on the oil refining process, refining economics and fuel specifications.

  • Scenarios for supply of gasolineE and dieselEreplacers and use of high and low blends with conventional oils.

  • Prospects for biofuels in bunkering and aviation fuel markets.

  • Impact on refinery energy use, refinery greenhouse gas emissions, impact on prices of oil, oil products and their differentials; for example, prospects for simultaneous biofuels expansion outside and within the EU affecting gasoline market balances in the Atlantic Basin with potentially global implications.

  • Implications for security of oil supply in the EU and options for management of the downstream sector in case of disruption of biofuel supply.

  • Experience in leading biofuel markets such as Brazil, the USA and parts of Asia, to be integrated into the above considerations.

 

Conclusions

  • For every barrel of biogasoline entering the gasoline pool European gasoline prices are expected to move downwards and so reduce the net cash margin for European refiners. European refiners can be expected to respond to these price signals by reducing their supply.

  • As refineries reduce their production their carbon emissions will fall in line with the reduction in crude demand. However for biodiesel, only once the biodiesel volumes close the large European diesel deficit sufficiently to narrow the European diesel import parity pricing environment will refining economics, carbon emissions and crude demand alter.

  • Whilst electric vehicles are expected to reduce gasoline demand the time it takes for them to do so initially reduces the impact on European refineries.
     

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More information: DG ENER Oil webpage


The studies are subject to a disclaimer and copyright. The studies have been carried out for the European Commission and express the opinions of the organisations having undertaken them. The views have not been adopted or in any way approved by the European Commission and should not be relied upon as a statement of the European Commission's views. The European Commission does not guarantee the accuracy of the information given in the studies, nor does it accept responsibility for any use made thereof.

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