Managing energy cost is key to the competitiveness of the petrochemical industry, since 80% of its manufacturing costs are related to energy and to oil and gas as feedstock. The industry monitors closely EU legislative developments in this field to make sure the transition to low-carbon energy happens in a way that preserves the industry’s competitiveness.
The EU intends to increase the share of renewables in final energy consumption in order to decrease greenhouse gas (GHG) emissions and to improve EU’s energy independence.
In December 2018, the EU adopted the revised Renewable Energy Directive, which includes a binding renewable energy target for 2030 of 32%, with a clause for an upwards revision by 2023.
The regulatory framework will pave the way for the EU’s transition towards clean energy sources such as wind, solar, hydro, tidal, geothermal, and biomass energy. It will also allow the EU to remain a frontrunner in the fight against climate change. As part of the European Green Deal, the Commission identified the importance of agreeing a new approach for exploiting Europe’s offshore renewable energy potential in a sustainable and inclusive way. The European offshore renewable energy strategy was published in November 2020, aims to increase Europe’s offshore wind capacity from its current level of 12 GW to at least 60 GW by 2030 and to 300 GW by 2050. The goal is also to reach 40 GW of ocean energy and other emerging technologies such as floating wind and solar by 2050.
Cefic and Petrochemicals Europe support the use of carbon-neutral energy sources including renewable energies.
To reduce its own environmental footprint, the (petro-)chemicals industry will need an abundant access to climate-friendly energy and feedstock at an affordable price. The transformation will require electrification and switching to alternative feedstock sources. Significant investments will have to take place in Europe in order to meet the industry’s need for large quantities of energy. Our member companies have already taken initiatives to reduce their own carbon footprint. These initiatives range from the electrification of steam crackers to Carbon Capture and Storage/ Utilisation (CCS/CCU) and circular economy projects.
To achieve its transition towards climate-neutrality, the industry will need much more low-carbon energy than today. As long as energy efficiency is defined as a limit on energy consumption of industry, Europe will face a trade-off with GHG reduction in Energy Intensive Industries. The Energy Efficiency Directive will have to be amended in order to take into account industry’s growing demand for energy.
In the meantime, the expansion of renewables represents a business opportunity for the (petro)chemical industry since renewable technologies rely on petrochemicals to provide the essential building blocks to manufacture them and make them work efficiently.