Brussels has launched a High-Level Dialogue with Europe's oil refining sector as the energy crisis adds to the bloc's import bill. The shift puts energy security and defence needs in tension with the EU's climate goals.
The European Commission is reconsidering its approach to oil refining. On Wednesday it launched the first High-Level Dialogue with the European oil refining sector, co-chaired by Energy Commissioner Dan Jørgensen and Defence Commissioner Andrius Kubilius.
Closures left Europe reliant on imported fuel
Over the past 20 years, Europe has shut down about a quarter of its refineries and cut processing capacity by roughly 10%. EU policymakers expected the green transition to shrink domestic demand for gasoline and diesel.
Environmental rules drove much of that attrition, according to Oilprice.com. Under the EU Emissions Trading System, refineries face a declining carbon cap and fewer free allowances, while the Industrial Emissions Directive requires costly retrofits.
As a result, the continent relies more on imported refined products. The energy shock has added more than €100 billion, or about $111 billion, to Europe's import bills, and European natural gas prices passed €100 per megawatt-hour on Friday, the highest since Russia invaded Ukraine in 2022.
Defence needs shape the policy shift
Poland, Czechia and Slovakia have pressed the Commission for a long-term protective strategy for refineries. They want protection from carbon leakage and access to EU funds for upgrades.
Participants in the dialogue noted that EU refineries supply approximately 70% of jet fuel and 85% of diesel consumed in Europe. Kubilius stressed that fuel supplies are crucial for military mobility, and under NATO's force readiness models the alliance must be able to deploy and fully supply 100,000 troops within the first 10 days of a crisis.
Under the AccelerateEU framework, the EU will revise regulations so strategic fuel stocks are easily accessible for military operations in exceptional circumstances. Kubilius also called for expanding the Cold War-era Central Europe Pipeline System.
The Commission also announced a joint roadmap with industry on the sector's transformation, including investment in biofuels and e-fuels. The EU now has to balance these needs against its climate goals.
Source: Oilprice.com
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