Forecourt Trader - 30 years at the heart of the fuel retailing community

Chris Hunt: UKPIA director general

In the past few months, all eyes have been on the European Parliament elections and the nomination of a new president of the European Commission.

As the EU embarks on a new legislative term, we are presented with both new opportunities and new challenges.

Above all, one of the most pressing issues for UK refiners is the ongoing, cumulative cost burden of legislation, which global competitors, such as the US and emerging market competitors, simply do not face.

Our industry operates on a global basis and multiple UK and EU legislation places incremental cost demands on our sector, in terms of operational and capital requirements, that are further eroding an international level playing field. In addition, despite world-class energy efficiency compared to refining in other parts of the world, refining in the UK as in the rest of the EU bears among the highest operating costs, one component of which, energy cost, is also among the highest in the world.

As things stand, the seven UK refineries will require circa 11.4bn solely to comply with UK and EU environmental legislation to 2030. An independent report by IHS Purvin & Gertz, published last year to assess the role and future of the oil refining industry in the UK, concluded that no industry would bear such a mandatory investment burden for no return. It added that a consequence could be the closure of more UK refineries and greater reliance upon imports for key products such as diesel and jet fuel.

Just a few months ago, the 'energy outcome' of the European Council Conclusions on the 2030 framework called for long-term planning security for industrial investment to ensure the competitiveness of Europe's energy intensive industries.

Also, currently under way is a process led by the EU Commission the Refining Fitness Check to review the cumulative impact of EU legislation on the sector. Looking ahead, our industry calls for opportunities to be seized. This can be done by promoting a timely, accurate and all-encompassing Fitness Check along with a firm commitment for tangible actions, fundamental reform of the existing refining policy environment and the creation of a stable, long-term framework for our industry.

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