Managing energy cost is key to economic 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 in a way that preserves the industry’s competitiveness.
The European Commission published the “Clean Energy Package” – a legislative package on energy policies – in November 2016. Since then, the European institutions have engaged in intense discussions on the different legislative proposals (new electricity market design, Renewable Energy Directive, Energy Efficiency Directive etc.) in order to reach an agreement.
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.
Although the petrochemicals industry supports this goal, it should be reached at the lowest possible cost to maintain the industry’s competitiveness on global markets.
In November 2016, the EC published a proposal for a revised Renewable Energy Directive (RED) to ensure that the target of at least 27% renewables in the final energy consumption in the EU by 2030 is met.
The 2009 RED also includes a 20% binding renewables target by 2020, which should be achieved via individual national targets. All EU countries must also ensure that at least 10% of their transport fuels come from renewable sources by 2020.
Cefic and Petrochemicals Europe support the use of carbon-neutral energy sources including renewable energies.
For instance, the Directive should provide for national exemptions for energy-intensive industries to reduce the cost burden on these industries and maintain their global competitiveness.
In the meantime, the RED 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.