2014 statistical report fuels europe

7/26/2019 2014 Statistical Report Fuels Europe

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STATISTICAL REPORT


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Editor: Chris Beddoes

Copyright FuelsEurope

Printed in Belgium - Designed by www.morris-chapman.com


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STATISTICAL REPORT


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#FuelsEurope

www.fuelseurope.eu

FuelsEurope


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5Statistical Report 2014 5

On the 1st June 2014, Europia changed its name to

FuelsEurope.

2014 brings a new 5 year cycle of EU institutions withParliamentary elections and new Commissioners being

chosen; it is also the 25th anniversary of the formation of

Europia. Our members decided that this is an appropriate time

to refresh its identity and have chosen the name FuelsEurope

to continue development of advocacy for European refining.

Welcome to the FuelsEuropes Statistical Report 2014

published for the first time as a stand-alone report. Whilethe statistics were originally included in EUROPIAs Annual

Reports, the 2014 Statistical Report follows the same

structure thus ensuring a consistent historical overview for

our readers.

The Report aims at providing high-quality data on energy

markets in general but also on refining industry specific issues.

Selected charts give our readers a broad overview of energy

and environment related data and trends over recent years.

FuelsEurope Statistical Report 2014 uses the following colourcoding to help you navigate easily through the document.

Each colour corresponds to a specific oil-related theme

making browsing between subsections user-friendly.

Oil & Energy

Oil Products

Prices and Margins

Refining

Marketing infrastructures

Foreword

Chris Beddoes

Director General


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Statistical Report 20146

FIG.1WORLDWIDE ENERGY CONSUMPTION

BY FUEL TYPE IN 2012

World

European Union

Oil, natural gas and coal currently meet the worlds energy

needs (together 86.8%). The overall share for renewablesremains very small (8.5%). The EU, unlike other major

economies, has a higher share of nuclear (11.9%) and

renewables (10%) in its energy mix.

Source: BP Statistical Review of World Energy 2013

33%

24%

30%

5%6%

2%

WORLD:

12476

Mtoe

38%

26%

19%

8%

6%

3%

EU:

1673 Mtoe

Units:Mtoe

5000

4500

4000

3500

3000

2500

2000

1500

1000

500

0

Oil

4130

611400 294 200

74 95

2987

3730

560831

237

Natural

gas

Coal Nuclear

energy

Hydro

electricity

Renewables

Note:Oil consumption is measured in

million tonnes; other fuels in million

tonnes of oil equivalent.


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Whilst the global energy consumption grew by

1.8% in 2012, the EU-27 share of oil (15%),

natural gas (13%) consumption decreased

by 1% whilst remaining at the same level for

coal (8%). Oil (36.5%) and natural gas (23.8%)

remain the main energy consumed in the EU(60.3%).

Coal represents the main energy consumed

in China and India and together these two

countries use almost 60% of the overall coal

consumption.

Note:Oil consumption is measured in million

tonnes; other fuels in million tonnes of oilequivalent.

20%

15%

5%

3%

12%

4%

41%

OIL

12%

8%

3%3%

50%

8%

16%

COAL

USA

RUSSIA

EU-28

CHINA

OTHERS

JAPAN

INDIA


FIG.2WORLDWIDE ENERGY CONSUMPTION

BY REGION IN 2012

Total energy:

4130

Total energy:

3730

22%

13%

4%13%4%

2%

43%

NATURAL GAS

Total energy:

2987

Units:Mtoe


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Crude oil is an internationally traded commodity with flows moving all

over the world.

There are two open and transparent markets crude oil and refined

products- within which the European refining industry operates.

The products are freely traded.

Unit:Milliontonn

esperyear


FIG.3WORLDWIDE CRUDE OIL MOVEMENT

IN 2012

218.0

59.7

286.528.826.7

146.5

51.4

23.7

44.8

98.3

16.842.9

26.4

65.5 112.2176.1

144.4

55.4

21.1

20.9

27.3

18.4

34.5

49.5

26.8

28.4

51.6

22.7

31.5

78.3 22.8

108.0

USA

SOUTH AND CENTRAL AMERICA

CANADA

EUROPE & EURASIA

AFRICA

ASIA PACIFIC

TRADE FLOWS IN 2012

MEXICO

MIDDLE EAST


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FIG.4WORLDWIDE REFINED PRODUCT DEMAND

AVERAGED 89.77 MILLION BARRELS PER DAY

IN 2012, WITH EUROPE ACCOUNTING FOR 17%Source: BP Statistical Review of World Energy 2013

26% NORTH AMERICA

7% SOUTH AND

CENTRAL AMERICA4% RUSSIA

16.5% EUROPEMIDDLE EAST 9%

AFRICA 4%

CHINA 11%

INDIA 4%

JAPAN 5%

EURASIA 1%

OTHER ASIA PACIFIC 12%

of whichEU: 14.4% andNon EU: 2.1%

Global demand for oil refined products continues to grow from

86.9 million barrels per day in 2011 to 89.77 in 2012. Although

the European market is declining it still remains the second

largest in the world (17%) behind North-America (27%), but with

China, Middle East and Asia catching rapidly.

Total:

89 774


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The refining supply/market demand balance shows that most of

the regions are dependent on imports to meet market demand.

Russia and at a lesser extent China has a positive trade balance

which provides Russia in particular a key role in supplying

demand from other regions.

Apparently balanced product demand and refinery throughput

in the EU hide a large surplus of EU gasoline production and a

shortage of diesel and jet production.

Source: Wood Mackenzie

Unit:Milliontonnesperyear

FIG.5WORLDWIDE REFINING SUPPLY/MARKET DEMAND

BALANCES IN 2012

1029966

298250

747722

157111

131

265

367339

458473

933818

REFINERY THROUGHPUT

REFINED PETROLEUM PRODUCTS DEMAND

NORTH AMERICA

AFRICA

RUSSIA

ASIA & OCEANIA

CHINA

EUROPE

LATIN

AMERICA

MIDDLEEAST


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CHAT

SIHR

IT

CY

FR

UK

BE DECZ

SK

PL

NO SE

FI

EE

LV

LT

HU

BG

TREL

RO

LU

NL

IE

ESPT

DK

FIG.6EU TOTAL OIL DEMAND AMOUNTED TO

631 MILLION TONNES IN 2013Source: Wood Mackenzie

COUNTRY Mt/y

AT Austria 12.301

BE Belgium 29.794

BG Bulgaria 4.225

HR Croatia 3.531

CY Cyprus 2.809

CZ Czech Republic 9.443

DK Denmark 7.596

EE Estonia 1.388

FI Finland 9.427

FR France 82.075

DE Germany 116.978

EL Greece 15.237

HU Hungary 6.391

IE Ireland 6.483

IT Italy 64.913

LV Latvia 1.835

LT Lithuania 2.633

LU Luxembourg 2.895

MT Malta 2.435

NL Netherlands 48.619

PL Poland 25.881

PT Portugal 11.191

RO Romania 9.149

SK Slovakia 4.136

SI Slovenia 2.532

ES Spain 63.275

SE Sweden 14.166

UK United Kingdom 70.369

EU total 631.706

NO Norway 10.770

CH Switzerland 12.312TR Turkey 34.500

Total NO+CH+TR 57.583

TOTAL 689.289

MT


NON EU

EU

TOTAL OIL DEMAND

EU-27 total oil amounted to 631 MT for 2013, representing a

decrease of 3.4% compared to 2012.

While the bigger Member States such as Germany (-3.3%),

France (-3.7%), UK (-4%) witnessed a decrease close to theEuropean average, the Member States hit by the Eurozone crisis

recorded a more significant decrease Greece (-6,7%); Portugal

(-9.6%); Italy (-7.1%); Spain (-4.9%).


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FIG.7DEMAND HISTORY OF OIL PRODUCTS

IN THE EUSource: Wood Mackenzie

LPG

GASOLINE

OTHER PRODUCTS

REFINERY FUEL & LOSS

JET/KEROSENE

NAPHTHA

DIESEL/GASOIL

FUEL OIL

Un

it:Milliontonnesperyear

800

700

600

500

400

300

200

100

0

20132012201120102009200820072006200520042003200220012000

Since 2008, we can observe a downward

trend for oil products demand. Over the past 5

years, the overall demand has declined by 13%.

The downward trend is mainly driven by the decrease

in gasoline (-20%) whilst middle distillates, gasoil and

kerosene, only decreased by 7%.


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FIG.8TYPICAL REFINERY OUTPUT BY PRODUCT TYPE

IN 2013Source: OECD

A wide range of products are produced from crude oil, ranging

from transportation and industrial fuels to chemical feedstock.

EU refineries produce also many specialty products such

as bitumen for road construction and roofing, lubricants for

transport and industry, petroleum coke for the metal industry and

waxes, solvents and other specialised products.

Fuels for transport represent the biggest share of the production.

1.3% LUBRICANTS

0.2% WHITE SPIRIT

3.4% REFINERY GAS

2.5% LPG

5.7% NAPHTHA

19.2% GASOLINE

DIESEL/GASOIL 39.0%

FUEL OIL 13.0%

BITUMEN 3.4%

PETROLEUM COKE 1.4%

OTHER PRODUCTS 4%

PARAFFIN WAXES 0.1%

6.8% KEROSENE

Total

657198 Mt


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GASOLINE DIESEL RATIO

FIG.9ROAD FUEL DEMAND IN THE EU

IN 2013Source: Wood Mackenzie


Diesel/Gasolineratio

The tax incentivized dieselisation trend has significantly

contributed to a fundamental change in the EU road fuel demand

structure. The shift from gasoline to diesel began some 25 years

ago and led to major gasoline demand decline as well as a

shortage of diesel production in the EU.

Gasoline demand continue to decline while diesel demand is on

the rise, currently reaching a 2.4 demand ratio in 2013.

250

200

150

100

50

0

3

2.5

2

1.5

1

0.5

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


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France

Germany

United Kingdom

Spain

ItalyPoland

Belgium

Netherlands

Austria

Sweden

Czech Republic

Portugal

Romania

Denmark

Finland

Hungary

Ireland

Greece

Luxembourg

Bulgaria

Slovakia

Slovenia

Croatia

Lithuania

Latvia

Estonia

Cyprus

Malta

05 10 15 20 25 30 350

Source: Wood Mackenzie

FIG.10ROAD FUEL DEMAND BY COUNTRY

IN 2013

GASOLINE

DIESEL

Unit: Million tonnes per year

Spurred on by favourable excise taxes on

diesel, the shift from gasoline to diesel over

past two decades led to a higher demand for

diesel than gasoline as a road fuel in the vast

majority of EU Member States.

In some countries, such as France and Spain

the imbalance is far more pronounced as a

result of very favourable tax policies for diesel.

The continued growth in truck transport in

the EU, driven by internal market and external

trade, has further contributed to spurring

diesel demand.


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Source: Eurostat

FIG.11NET TRADE FLOWS FOR REFINED PRODUCTS

DEMONSTRATES THE TREND OF GROWING GASOLINE

SURPLUS AND GASOIL/DIESEL/JET DEFICITS

GASOLINE

DIESEL/GASOIL

JET FUEL

Unit:percentageimpo

rts/percentageexports

The EU has significant excess gasoline production capacity, but

is however unable to meet regional demand for diesel and jet

fuel.

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

60

50

40

30

20

10

0

-10

-20

-30

-40

Net gasoline exports:46 322 ktonnes

Net gasoil imports:14 344 ktonnes

Net jet fuel imports:14 042 ktonnes


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Source: Eurostat

FIG.12MAJOR GASOLINE AND DIESEL TRADE FLOWS

TO AND FROM THE EU IN 2012

As a result of the gasoline/diesel imbalance demand Europe has significant

excess gasoline production capacity that need to be exported, while to meet

regional demand for diesel and jet fuel, Europe became heavily reliant on other

countries for import, especially from Russia, Middle East & USA.

North America was the traditional market for exporting gasoline surplus but therecent shale oil revolution, cheap energy and reducing demand have enabled US

refiners to increase their supplies for the internal market and to compete on other

export markets with EU refiners.

20.2

10.5

11.9

3.9

5.712.6

79.2 249.9NORTH AMERICA

EU

AFRICA

RUSSIA

ASIA

ASIA

Unit:Milliontonne

speryear

GASOLINE DEMAND IN 2012

DIESEL/GASOIL DEMAND IN 2012

GASOLINE TRADE FLOWS IN 2012

DIESEL/GASOIL TRADE FLOWS IN 2012


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Source: Eurostat

FIG.13EU GASOLINE TRADING BALANCE:

USA IS A KEY EXPORT MARKET FOR THE EU

EUROPE NON EU

REST OF THE WORLD

USA

The US was the traditional export market for the structural EU gasoline surplus.

The recent shale oil boom has decreased export opportunities to the US and

forced EU refiners to find other markets.

The EU gasoline surplus in 2011 grew by 15% compared to 2011, and by 7.2%

compared to 2008, the second highest number. Comparatively the share of the

US has decreased since 2008 from 46% to 34% in 2012 of the total exports.


2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

50 000

23%

27%

19%

16%

12%

10%

9%

9%

13%

10%

10%

7%

11% 54% 35%

58% 35%

56% 34%

53% 37%

41%

41% 46%

50%

38% 53%

38% 52%

34% 54%

27% 57%

18% 63%

13% 60%

26% 51%

0 10 000 15 0005 000 20 000 25 000 30 000 35 000 40 000 45 000

EXPORT

19St ti ti l R t 2014


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Source: Eurostat

FIG.14EU GASOIL TRADING BALANCE:

RUSSIA IS A LEADING EXPORTER OF GASOIL TO THE EU


10 00040 000 30 000 25 00035 000 20 000 15 000 10 000 5 000 0 5 000

EXPORTIMPORT

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

17%

33%

19%

15%

11%

34%

33%

22%

40%

23%

29%

31%

47%

49%

53%

54%

84%

60%

65%

70%

60%

76%

70%

69%

37%

39%44%17%

19%

29%

31%

5%

6%

2%

8%

2%

1%

REST OF THE WORLD

RUSSIA

NORTH AMERICA

EUROPE NON EU

Major growth of US diesel exports to EU. EU increasingly dependent upon

imported diesel, exporting lower quality gasoil.



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Source: Eurostat

FIG.15EU JET FUEL TRADING BALANCE:

EU CONTINUOUSLY INCREASES ITS IMPORT OF JET

FUEL FROM MIDDLE EAST

5 00020 000 15 000 10 000 5 000 0


EXPORTIMPORT

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

51%

31%

53%

64%

62%

33%

49%

50%

42%

57%

60%

46%

51%

49%

69%

47%

36%

38%

67%

51%

50%

58%

43%

40%

54%

49%

REST OF THE WORLD

MIDDLE EAST

EUROPE NON EU

Growing EU dependence on jet fuel imported mainly from Middle East.

21Statistical Report 2014


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Source: PFC Energy

FIG.16bMARINE FUEL CONSUMPTION IN THE EU

Switch to LNG or the use of scrubbers are alternatives to

new IMO emissions limits in 2020 or 2025.

Source: PFC Energy

FIG.16aGLOBAL MARINE FUEL CONSUMPTION

FUEL OIL

GASOIL

FUEL OIL

GASOILUnit:Consumption(1,000tonnes

)

Unit:Consumption

(1,000tonnes)

The global demand for marine fuel is mainly met by fuel

oil (88%) while gasoil only represents 12% of the market.

The new limits for sulphur content of marine fuels could

drastically change the market with a massive demand for

low sulphur distillates, requiring major refinery investments.

60.000

50.000

40.000

30.000

20.000

10.000

0

2000 2002 2004 2006 2008 2010 2012

250.000

200.000

150.000

100.000

50.000

02000 2002 2004 2006 2008 2010 2012



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t t st p t22

The sulphur content

of road fuels has been

reduced from 5500 ppm

in 1975 to sulphur free

in 2010 allowing use of

sophisticated emissions

control by vehicles.

In addition to the

environmental benefits

arising from reduced

sulphur dioxide (SO2

), the

use of 10ppm sulphur

gas oil is also essential

for the effective working

of abatement technology

in engines fitted in newer

non-road mobile machinery,

including tractors, which

are manufactured to meet

stringent new EU emission

standards for oxides of

nitrogen (NOX).

Source: PFC Energy

Source: PFC Energy

FIG.17aEU ROAD DIESEL SULPHUR SPECIFICATIONS

FIG.17bEU OFF-ROAD DIESEL SULPHUR SPECIFICATIONS

max.sulphurcontent(ppm)

max.sulphurcontent(ppm)

6000

5000

4000

3000

2000

1000

01975 1980 1985 1990 1995 2000 2005 20122010

6000

5000

4000

3000

2000

1000

01975 1980 1985 1990 1995 2000 2005 20122010


23


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2323

The following areas impose limits on the sulphur level of fuel in

ships travelling within them.

Changes in shipping fuel specifications require large-scale

industry investment, by shipping and fuels supply industries.

The new of 0.10% will be difficult to produce from fuel oil and

be met by marine diesel, a lighter product or potentially by LNG.

Secondary technology such as scrubbers can also be used to

meet these sulphur levels but this technology is not suitable for

our ships.

FIG.18GLOBAL MARINE FUEL SULPHUR

SPECIFICATIONS

SO2EMISSION CONTROL AREAS (SECAs)Source: European Commission

SECAs cover the Baltic and North Seas and

the English Channel

Limits for the sulphur content of marine

fuels in SECAs:

1% until 31 December 2014

0.10% as from 1 January 2015

Limits for the sulphur content of marine

fuels outside SECAs

in the EU waters by 2020:

0.50% for EU waters by 2020



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24

FIG.19SINCE 1990 FUELS ARE GETTING PROGRESSIVELY

CLEANER RESULTING IN EXHAUST EMISSIONS

REDUCTION BY OVER 80%

140

120

100

80

60

40

20

0

1990 1995 2000 2005 2010

Source: European Commission

VOLATILE ORGANIC COMPOUNDS

BENZENE

CARBON MONOXIDE

NITROGEN OXIDES

PARTICULATE MATTER DIESEL

SULPHUR OXIDES

Unit:Emissio

ns(%

of1995level)

Since 1990 the refining industry has contributed to cleaner

exhausts by containing today over 80% lower pollutants.

These significant improvements are the result of the partnerships

with the automotive industry aiming at improving the fuel-engine

efficiency and leading to multiple environmental benefits.


25


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25

FIG.20MAXIMUM ON-ROAD DIESEL SULPHUR LIMITSSource: Hart Energy Research and Consulting, January 2014

Europe together with USA, Canada, Japan, Australia and Chile

apply the lowest (10-15 ppm) on-road diesel sulphur limits in the

world.

Countries may apply lower limits for different grades, regions/

cities, or based on average content. Detailed information on

limits and regulations can be found at www.ifqc.org

10 - 15 PPM 16 - 50 PPM 51 - 350 PPM

351 - 500 PPM 501 - 2000 PPM >2000 PPM



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FIG.21MAXIMUM GASOLINE SULPHUR LIMITSource: Hart Energy Research and Consulting, January 2014

The EU has set the most stringent environmental specifications

for sulphur in gasoline worldwide with a maximum level of 10

PPM.

Countries may apply lower limits for different grades, regions/

cities, or based on average content. Detailed information on

limits and regulations can be found at www.ifqc.org

10 PPM 11 - 99 PPM 100 - 150 PPM

151 - 600 PPM 601 - 2500 PPM


27


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The EU Refining industry operates between two global, open

and transparent markets: the market of crude oil and the market

of refined products. The main benchmarks are priced in dollars.

The price of crude oil is set on international spot markets and

reported by designated agencies. The price of oil is an important

marker for the global economy and is closely watched by

businesses and policy-makers.

After a decade of relatively low prices, oil started rising last

decade, leading to peaks just before the financial crisis in 2008.

Since 2010, the oil price varies around 110-120 $.

FIG.22CRUDE OIL PRICE EVOLUTION

SINCE 1989

Source: Energy Information Administration

2013 $

NOMINAL PRICE

180

160

140

120

100

80

60

40

20

0

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Unit:USDollarperbarrel

EuropeBrentspotpriceFreeOnBoard



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Simple refineries

(hydroskimming) have

consistently low or even

negative margins.

Refineries are often referred

to as simple if they do

not include conversion

processes and complex

if they do. Unlike complex

refineries, simpler refineries

produce lower value

products and as such

struggle to break even on

their operations after costs.

FIG.23SIMPLER REFINERIES HAVE CONSISTENTLY

LOW OR EVEN NEGATIVE OPERATING MARGINS

Source: Oil market report, International Energy Agency

BRENT CRACKING NORTH WEST EUROPE

BRENT HYDROSKIMMING NORTH WEST EUROPE

Unit:MargininUSdollars

14

12

10

8

6

4

2

0

-2

-4

-6

January97

July97

January98

July98

January99

July99

January00

July00

January01

July01

January02

July02

January03

July03

January04

July04

January05

July05

January06

July06

January07

July07

January08

July08

January09

July09

January10

July10

January11

July11

January12

July12


29


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FIG.24REFINERS OPERATE BETWEEN TWO GLOBAL

COMMODITY MARKETS:

CRUDE MARKET AND REFINED PRODUCTS MARKETSource: Wood Mackenzie

140

120

100

80

60

40

20

01996 1998 2000 2002 2004 2006 2008 2010 2012 2013

Unit:US

Dollarperbarrel

REFINING SPREAD BETWEEN

CRUDE OIL AND GASOLINE

PRICES

GASOLINE PRICE (NW EUROPE

SPOT, 95R)

CRUDE PRICE (EUROPEAN

BRENT FOB)

EU refining operates between two global commodity markets,

the crude market and the refined product market. The crack

spread represents the difference between the cost of crude oil

and the market sales price for refined products.

Generally product prices rise with crude prices but the drivers of

the difference are many.

In historic terms, the profitability has started to decline in a context

of falling demand (2008). Whilst 2012 saw a small improvement

for refiners, the spread is generally tight- margins are low and the

industry is highly vulnerable to the operating costs that must bededucted from the spread before profitability can be considered.



30/56

FIG.25FUEL TAXES MAKE A SIGNIFICANT CONTRIBUTION

TO MEMBER STATE TAX REVENUE

Source: Eurostat and Wood Mackenzie

CH4%

10%8%

4%

7%

3%

5%

3% 3%7%

7%

8%

4%

4%

9%

7%

8%

6%

12%

6%

9%

7%

4%6%

6%6%

3%

COUNTRY SHARE

AT Austria 4%

BE Belg ium 3%

BG Bulgaria 12%

HR Croatia 8%

CY Cyprus 7%

CZ Czech Republic 7%

DK Denmark 3%

EE Estonia 9%

FI Finland 4%

FR France 3%

DE Germany 3%

EL Greece 6%

HU Hungary 6%

IE Ireland 6%

IT Italy 4%

LV Latvia 7%

LT Lithuania 8%

LU Luxembourg 7%

MT Malta 5%

NL Netherlands 4%

PL Poland 8%

PT Portugal 6%

RO Romania 9%

SK Slovakia 7%

SI Slovenia 10%

ES Spain 6%

SE Sweden 4%

UK United Kingdom 5%

5%

6% - 10%

HIGHER THAN 10%

EUROPE NON EU

LESS THAN 6%

Taxes on fuels contribute on average to 7% of Member

State tax revenue.

Many competing products are subsidised. Replacing

economically viable petroleum products with suchalternatives would have large fiscal consequences.


31


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FIG.26TOTAL TAXATION SHARE

IN THE END CONSUMER PRICE


4144

4551

4350

4650

4149

4551

4650

465050594958

5163

5058

4753

4656

4852

4753

4857

4958

5961

5258

5560

5460

4657

4460

4651 4851

PTES

FR

UKNL

BE

DE

DK

SE

FI

EE

LV

LT

PL

CZ SK

HU

RO

BGIT

GR

MT CY

AT

LU

IE

5056SI

Euro-Super 95

COUNTRY %

Nederlands 63

UnitedKingdom 61

Sweden 60Italy 60

Greece 60

Germany 59

Finland 58

Ireland 58

France 58

Belgium 58

Denmark 57

Portugal 57

Slovakia 56

Slovenia 56

Czech Republic 53

Austria 53

Hungary 52

Spain 51

Malta 51

Cyprus 51

Latvia 51

Lithuania 50

Romania 50

Poland 50

Estonia 50

Luxemburg 49Bulgaria 44

EURO-SUPER 95 DIESEL OIL

55%

The price at the pump is driven to a large degree by taxes and over half the cost

of fuel represents taxes. The taxes on gasoline are generally higher than for diesel.

This differential tax treatment has driven a demand shift over the past 10 years.

Fuels Taxes contribute substantially to Member State revenues.

Note: Share at January 2014

DIESEL OIL

COUNTRY %

United Kingdom 59

Italy 55

Sweden 54Ireland 52

Nederlands 51

Germany 50

France 50

Slovenia 50

Finland 49

Belgium 49

Cyprus 48

Hungary 48

Denmark 48

Austria 47

Czech Rep 47

Slovakia 46

Poland 46

Romania 46

Portugal 46

Malta 46

Estonia 46

Spain 45

Latvia 45

Greece 44

Lithuania 43

Bulgaria 41

Luxemburg 41



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FIG.27BREAKDOWN OF AUTOMOTIVE DIESEL PRICES

ACROSS EU (DECEMBER 2013)


Unit: Price in Euro per litrePRODUCT TARIFFS VAT

Diesel prices are generally lower than gasoline prices due to

the lower tax element, with the notable exception of the United

Kingdom.

Only a fraction of the price paid at the pump contributes to the

refiners income, the remainder gain to Member States and to

buy the crude oil.

COUNTRY% oftaxes

United Kingdom 59,01%

Italy 55,69%

Sweden 54,20%

Ireland 52,33%

Netherlands 51,37%

Slovenia 50,73%

Germany 50,00%

France 49,92%

Finland 49,60%

Belgium 48,65%

Hungary 48,09%

Cyprus 47,79%

Denmark 47,59%

Austria 47,52%Czech Republic 47,29%

Slovakia 46,57%

Estonia 46,34%

Malta 46,31%

Croatia 46,28%

Poland 46,11%

Portugal 46,06%

Romania 45,88%

Spain 45,13%

Latvia 44,59%

Greece 43,77%

Lithuania 42,83%

Luxembourg 41,07%

Bulgaria 40,91%


33


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COUNTRY% oftaxes

Netherlands 62,89%

United Kingdom 61,64%

Italy 60,53%

Greece 60,25%

Sweden 59,80%Germany 58,72%

Ireland 58,33%

Finland 58,05%

Belgium 57,69%

France 57,61%

Portugal 56,90%

Slovenia 56,58%

Denmark 56,43%

Slovakia 56,43%Austria 53,58%

Croatia 52,93%

Czech Republic 52,80%

Hungary 51,70%

Cyprus 51,01%

Spain 50,88%

Latvia 50,88%

Malta 50,63%

Poland 50,23%

Lithuania 50,13%

Romania 49,78%

Estonia 49,54%

Luxembourg 48,93%

Bulgaria 44,51%

FIG.28PRICES AND MARGINS

BREAKDOWN OF AUTOMOTIVE GASOLINE PRICES

ACROSS EU (DECEMBER 2013)Source: European Commission

Gasoline prices are generally higher than diesel prices due to the

higher tax element.

Only a fraction of the price paid at the pump contributes to the

refiners income, the remainder gain to Member States and to

buy the crude oil.

Unit: Price in Euro per litrePRODUCT TARIFFS VAT



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FIG.29GLOBAL REFINING CAPACITY

AS OF 2012Source: PFC Energy

Unit:k

t/year

1.045.501

322.889 161.654 379.283

419.245

1.460.895

843.394 kt/yearof which EU + Norway + Swizerland

= 792,961

23%

NorthAmerica

7%Latin

America

4%Africa

8%MiddleEast

32%AsiaPacific

17%

Europe

9%

Russia

Refining is spread around the world and is a truly global business.

The share of EU refining has decreased from 17% in 2011 to

16% in 2012, but it still remains the third biggest refining region.


35


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FIG.30REFINERY / STEAM CRACKER SITES IN THE EUSource: PFC Energy

REFINERY LOCATION

STEAM CRACKER LOCATION

INTEGRATED REFINERY / STEAM CRACKER LOCATION

A large number of refineries are integrated with or located

very close to steam crackers that produce products for the

petrochemicals industry.

Such interconnections show how refining is an intrinsic part

of the industrial value chain and provides the basis for highly

advance, high value products.


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37


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FIG.32EU, NORWEGIAN AND SWISS FUELS

MAINSTREAM REFINERIES HAD 720.9 MILLION

TONNES OF PRIMARY REFINING CAPACITY IN 2013Source: Concawe

6,110,2

4,5

89,6

70,6

80,2

39,2 102,6

8,45,6

24,7

21,6

13,217,3

10,0

8,1

5,0

24

15,1

66,1

3,6

70,516,0

8,8

EFTA

EU

Threshold >50 kbbl/d or 2.5Mt/a

Unit:Milliontonn

esperyear

The 84 refineries have a primary refinery capacity of 720,9 million

tonnes. Due to additional closure the capacity has decreased by

1% compared to 2012.

COUNTRY CAPACITY

DE Germany 102,6

IT Italy 89,6

UK United Kingdom 80,2

FR France 70,6

ES Spain 70,5

NL Nederlands 66,1

BE Belgium 39,2

PL Poland 24,7

EL Greece 24

SE Sweden 21,6

PT Portugal 16,0

RO Romania 15,1

FI Finland 13,2

AT Austria 10,2

LT Lithuania 10,0

DK Denmark 8,8

CZ Czech Republic 8,4

HU Hungary 8,1

SK Slovakia 5,6

BG Bulgaria 5,0

HR Croatia 4,5

IE Ireland 3,6

EU-28 697,5

NO Norway 17,3

CH Switzerland 6,1

NO + CH 23,5

TOTAL 720,9



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FIG.33CAPACITY AND UTILISATION

OF EUROPEAN REFINERIESSource: BP Statistical Review of World Energy 2013

REFINERY THROUGHPUT

UTILISATION RATE

IDLE CAPACITY

Capacity

(milliontonnes)

Utilisationrate800

700

600

500

100%

87.5%

75%

62.5%

20122011201020092008200720062005200420032002200120001999

The utilisation rate of EU refineries dropped from the 2012 levels

to about 80%. The continued decrease of demand and evolution

of market demand (increasing diesel/gasoline imbalance) forces

European refiners to adapt these market forces.

A utilisation rate of above 85% is normally required for efficient,

economic operations.


39


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FIG.34 GHG EMISSIONS BY SECTOR IN THE EU

IN 2011Source: European Environmental Agency, 2013

31% ENERGY INDUSTRIES

RESIDENTIAL 14%

TRANSPORT 20%

FUGITIVE EMISSIONS 2%

FROM FUELS

INDUSTRIAL PROCESSES 7%

WASTE 3%

AGRICULTURE 10%

13% MANUFACTURING,

INDUSTRIES & CONSTRUCTION

Industry (energy and manufacturing) accounts for 44% of GHG emissions the EU. Transport, supplied around 90% by oil refined

products, generates 20% of EU GHG emissions.



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FIG.35CO2EMISSIONS TREND BY SECTOR


ENERGY INDUSTRIES MANUFACTURING, INDUSTRIES &

CONSTRUCTIONTRANSPORT

RESIDENTIALFUGITIVE EMISSIONS

FROM FUELS

AGRICULTURE

TOTAL (EXCLUDING LULUCF)

INDUSTRIAL PROCESSES

WASTE

140

130

120

110

100

90

80

70

60

50

40

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Em

issions(%

of1990level)

CO2 emissions per sector are generally all

declining since 2007. Industry (processes and

manufacturing) CO2 emissions reduced sharply

over the period 2007-2011 and are now between

28 and 34% lower than the 1990 level.

CO2 emissions from transport are also steadily

decreasing since 2007.


41


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FIG.36DECLINING EU SHARE

IN GLOBAL CO2EMISSIONS

Source: IEA, WEO 2013

CO2emissions[%

ofworldtotal]

In 2011 the EU accounted for 11% of global CO2emissions and is expected to account for only 7% by 2035.

USA

MIDDLE EAST

INDIA

AFRICA

LATIN AMERICA

2035

2011

REST OF THE

WORLD 7% EU

RUSSIA

CHINA

11%

5%

26%

5%

3%

3%

6%

24%

17%


FIG 37 EU REFINERIES ENERGY COST


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FIG.37EU REFINERIES ENERGY COST

AS PERCENTEAGE OF TOTAL CASH OPERATING

COSTSSource: Solomon Associates

Energycostas%

oftotaloperatingcost

70%

60%

50%

40%

30%

20%

10%

02010200820062004200220001998199619941992

The share of energy costs has continuously increased over the

past 20 years to reach around 55% of cash operating costs.

Despite strong records in energy efficiency gains and a leading

position in this field, European refiners suffer a strong competitive

disadvantage from these high energy costs.


43

FIG 38 REFINERY SULPHUR EMISSIONS


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Source: Concawe

FIG.38REFINERY SULPHUR EMISSIONS

HAVE BEEN DECLINING OVER THE YEARS

1979 1982 1985 1989 1992 1995 1998 2002 2006 2010

1.8

1.6

1.4

1.2

1

0.8

0.6

0.4

0.2

0

SULPHUR EMISSIONS IN

RELATION TO REFINERIES

OUTPUT

Unit:Kilo-tonneSulphurpermilliontonneof

refinerythroughput

The sulphur emissions from refinery operations decreased by 75% over the past 30 years.


FIG 39 QUALITY OF REFINERY WATER EFFLUENT:


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Over the years the EU Refineries have significantly improved the

quality of refinery water effluent.

The amount of oil discharged in effluents from reporting

installations continued to decrease to extremely low levels - both

in terms of the absolute amount discharged and the amount

expressed relative to the volume of feedstock processed

(throughput) and the refining capacity of the installations.

FIG.39QUALITY OF REFINERY WATER EFFLUENT:

OIL DISCHARGED IN WATERSource: Concawe

50

45

40

35

30

25

20

15

10

5

0

140

120

100

80

60

40

20

0

1969 1974 1978 1981 1984 1987 1990 1993 1997 2000 2005 2008 2010 2012

OIL DISCHARGED WITH AQUEOUS EFFLUENTS (KTONNES/YR)

OIL DISCHARGED PER REPORTED THROUGHPUT (G/TONNE)

Unit:O

ilinwaterdischarge(ktonnes/yr)

Unit:Oildischargedpereportedthroug

hput(g/tonne)


45

FIG 40 EU REFINERIES ENERGY CONSUMPTION


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FIG.40EU REFINERIES ENERGY CONSUMPTION

AND EFFICIENCY TRENDS RELATIVE TO 1992Source: Solomon Associates

110

105

100

95

90

852010200820062004200220001998199619941992

Total Energy Consumption

per tonne (indexed)

Ell (indexed)

Note: the lower the Ell,the higher the energyefficiency of a refinery.

EnergyConsumption

pertonneinputandEllrelativeto1992

The index shows that EU refineries have improved their energy

efficiency by about 10% over the past 18 years. This improvement

was achieved despite more energy intensive refinery operations

to produce cleaner fuels and meet shifts in market demand.

The corresponding annual energy saving is roughly equivalent

to the total annual average energy consumption of four large EU

refineries.


FIG 41 ELECTRICITY GENERATION EFFICIENCY


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FIG.41ELECTRICITY GENERATION EFFICIENCYSource: Concawe

60%

55%

50%

45%

40%

35%

30%

2010200820062004200220001998199619941992

Cogeneration

Overall

EU28 conventional thermal

plants

Electricitygenerationefficiencypercent

Refineries have long recognised the considerable efficiency gains

offered by cogeneration, which now accounts for more than 90%

of the electricity produced in EU refineries.

As a result the average efficiency of electricity generation in EU

refineries is substantially higher than the EU average efficiency of

electricity production from the average of conventional thermal

plants of the electricity sector.


47

FIG 42 ELECTRICITY PRICES FOR INDUSTRY


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FIG.42ELECTRICITY PRICES FOR INDUSTRY

US INDUSTRY IN COMPETITIVE ADVANTAGE

OVER EU INDUSTRYSource: IEA

OECD EUROPE USA JAPAN

Evolution of end-user electricity prices for industry, taxes excluded (2005 = index 100)

150

140

130

120

110

100

90

802012Q32011201020092008200720062005

Over the past few years the US industry gained a significant

competitive advantage as a result of low electricity prices.

While in the EU industry faced a 40% energy price increase

between 2005 and 2012, the price of electricity for US industry

decreased by a few percent over the same period.


FIG 43 CHEMICAL INDUSTRY RAW MATERIAL USE


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FIG.43CHEMICAL INDUSTRY RAW MATERIAL USE

IN 2011Source: CEFIC

Refining products

61.210

19.200

1.340

8.500

Natural Gas Coal Renewables

The EU Refining sector is closely integrated with the Petrochemical Sector. 68% of the petrochemical feedstock relies on oil refined

products in 2011.

Note:Volume in 1.000 t material (feedstock) use only


49

FIG.44 CUMULATED NUMBER OF EU REGULATIONS


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FIG.44CUMULATED NUMBER OF EU REGULATIONS

ON HEALTH, SAFETY AND ENVIRONMENTSource: EU, Directory of EU legislation in force

2012

1724

784

2011

1590

2010

1386

2009

1223

2007

997

2008

1105

2006

1084

2005

998

2004

940

The number EU health, safety and environmental regulations has

almost doubled between 2004-2012. Whilst benefiting Europes

citizens multiple regulations add considerable complexity to

industry.

In October 2013, the European Commission announced REFIT

- Fit for growth, a step in ensuring that EU legislation is fit for

purpose. It aims at simplifying or withdrawing EU laws, easing

the burden on businesses and facilitating implementation.


FIG.45EU REFINING INDUSTRY # 1 PROCESS INNOVATION


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G 5 U G US OC SS O O

AND AMONG MOST INNOVATIVE INDUSTRIES FOR

PRODUCTS

Pharmaceuticals

Computers

Chem

icals

Cokeandpetroleump

rod

ucts

Electrica

leq.

Machineryandeq.n

.e.c.

Bever

ages

Informationandcommunication

Tobacco

Othertransporteq.

Rubberandpla

stics

Motorveh

icles

Othermanufacturing

Basicm

etals

Manufacturing

Non-metallicmineralprod

ucts

Textiles

P

aper

Furn

iture

P

rofessionalandscientificactivities

Foodanddrink

Financialactivities

Electricityand

gas

Leather

Fabricatedmetalprod

ucts

Repairandinstallationofmach

inery

Marketservices

Printingandpublishing

W

ood

Wholesaleandretailtrade

Realestateactivities

Clothing

Watersuply

Mining&quar

rying

Construction

Ad

ministrativeandsupportactivities

Transportandsto

rage

Accomodationand

food

40%

35%

30%

25%

20%

15%

10%

5%

0%

PRODUCT INNOVATION

COKE AND PETROLEUM PRODUCTS

PROCESS INNOVATION

PROCESS INNOVATION

Source: European Competitiveness Report 2013

According to data presented by the European Commission in its

annual Competitiveness Report, the EU Refining industry was the

leading industrial sector in process innovation and among the top 4

for product innovation.


51

FIG.46SKILL AND KNOWLEDGE INTENSITIES


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Leather&foo

twear

Agriculture&fo

restry

Clothing

Wood&woodpro

ducts

Textiles

Fur

niture

Accomodation&foodservices

Food

Fabricatedmetalpro

ducts

Construction

Transportation&storage

Non-metallicmineralpro

ducts

Rubber&plastics

Basicm

etals

Paper

Wholesale&retailtrade

Water

Mining&qua

rrying

Printing

Administrative&supportservices

Repairofmachinery

Othermanufac

turing

Electricalequip

ment

Motorve

hicles

Beve

rages

Otherservices

Machinery&equipment

n.e.c.

Tob

acco

Chem

icals

Othertransportequip

ment

Realestateactivities

Electricity&gas

Computer,electronicando

ptical

Cokeandrefinedpetro

leum

Arts&entertaiin

ment

Administ

ration

Humanhealthandsocialwork

Financial&insuranceactivities

Pharmaceu

ticals

Inform

ation

Person

al,scientificandtechnicalactivities

Education

80%

60%

40%

20%

0%

(% OF TOTAL EMPLOYMENT)Source: European Competitiveness Report 2013

HIGH SKILL

MEDIUM SKILL

LOW SKILL

According to the European Commissions

Competitiveness Report for 2013, the

European refining industry employs one of the

largest percentages of highly skilled workers

of all manufacturing industries, just after the

pharmaceutical industry.


FIG.47 NUMBER OF PETROL STATIONS IN EUROPE


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Source: National Oil Industry Associations (NOIA)

IN 2013

Italy

Germany

Turkey

France

Spain

United Kingdom

Poland

Greece

Netherlands

Czech Republic

Switzerland

Belgium *

Bulgaria

Sweden

Portugal

AustriaSlovakia**

Romania

Denmark

Finland

Ireland

Norway

Hungary

Latvia

SloveniaEstonia

Cyprus ***

Luxembourg

25 00020 00015 00010 0005 0000

Unit: Number of petrol stations

* Source: FAPETRO (department of the Federal Public Services Belgium)

** Source: Statistical Office of the Slovak Republic*** Source: Petrol Owners Association

Note:Data for Bulgaria and Slovakia refer to 2012

There were over 118,000 petrol stations

operating in the EU, Norway, Switzerland

and Turkey in 2013, fuelling some 230 million

vehicles and 34 million trucks on Europes

roads.

The number of service stations continued to

decline from 131,000 in 2012.


53

About FuelsEurope


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FuelsEurope was known until June 2014 as Europia, which

was formed in 1989 to represent the interests of Companies

conducting refinery operations in the EU with the EU Institutions.

FuelsEurope is a division of the European Petroleum RefinersAssociation, an AISBL operating in Belgium.

This association, whose members are all 43 companies

that operate petroleum refineries in the European Economic

Area in 2013, is comprised of FuelsEurope and Concawe

divisions, each having separate and distinct roles and

expertise but administratively consolidated for efficiency and

cost-effectiveness.

Members account for almost 100% of EU petroleum refining

capacity and more than 75% of EU motor fuel retail sales.

FuelsEurope aims to promote economically and environmentally

sustainable refining, supply and use of petroleum productsin the EU, by providing input and expert advice to the EU

Institutions, Member State Governments and the wider

community, thus contributing in a constructive and pro-active

way to the development and implementation of EU policies and

regulations.

AboutFuelsEurope

FuelsEurope Members


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FuelsEuropeMembers


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FuelsEurope

Boulevard du Souverain, 165 I B-1160 Brussels I BelgiumPhone: +32 (0)2 566 9100 I Fax: +32 (0)2 566 9111

www.fuelseurope.eu

2014 statistical report fuels europe

Documents