Is Europe sailing back into the Ice age?

In den letzten Jahren wurde die Mehrheit der europäischen Länder von linken oder Mitte-links-Parteien regiert, was zur Umsetzung des Green Deal führte. Dieser ehrgeizige Pakt zielt darauf ab, Europa bis 2050 zum ersten klimaneutralen Kontinent der Welt zu machen – eine Initiative, die lobenswert erscheint. In der Folge wird Europa jedoch zunehmend von anderen Weltmächten abhängig sein, insbesondere von China und den Vereinigten Staaten.

Ist es klug, sich beim Import wichtiger Produkte wie Kunststoffen, die wichtige Bestandteile medizinischer und technischer Geräte sind, auf andere Länder zu verlassen? Ist es darüber hinaus klug, ein ungünstiges wirtschaftliches Umfeld für Raffinerien in Europa zu schaffen, das zu ihrer Schließung führt? Unter anderem der Krieg in der Ukraine hat bereits gezeigt, wie stark die Länder von Energie abhängig sind. Die COVID-19-Pandemie hat die Bedeutung von Produktionsstandorten und internem Wissen für die Aufrechterhaltung der Wirtschaft noch weiter verdeutlicht.

Es scheint, dass die europäische Wirtschaft nicht so geschützt und gefördert wird wie die chinesische oder amerikanische. Angesichts der jüngsten Wahlen, bei denen viele europäische Länder für rechte Parteien gestimmt haben, muss man sich fragen: Kann man noch etwas tun, um diese Sorgen auszuräumen?

Sir Jim Ratcliffe, der Gründer von INEOS, erklärte im Januar 2024: „Dies ist die letzte Chance, Europa davon abzuhalten, schlafwandelnd seine Industrie, seine Beschäftigungsinvestitionen und seine Emissionen ins Ausland zu verlagern.“

Der Petrochemie-Milliardär sagt, er hätte auf die 4-Milliarden-Dollar-Investition Belgiens in INEOS ONE verzichtet, wenn er von den regulatorischen Hürden gewusst hätte.

Er schrieb einen Brief an die EU-Präsidentin von der Leyen, in dem Sir Jim sagte:

• Der europäische Chemiesektor hat Mühe , mit anderen Märkten wie den USA, China und dem Nahen Osten zu konkurrieren .
• Mit der CO2-Besteuerung ist es gelungen, Investitionen aus Europa zu vertreiben.
• Diese Steuern haben Importe aus Ländern ohne CO2-Steuern gefördert, was den CO2-Fußabdruck Europas vergrößert hat.
• Im Gegensatz dazu haben die USA Zuckerbrot und nicht Peitsche verwendet und bieten staatliche Anreize in Höhe von einer halben Billion Dollar für Technologien, die den CO2-Fußabdruck der USA verbessern. Dies fördert Investitionen in sauberere Technologien.
• In Europa, einst der größte Chemiesektor der Welt, gab es seit zwanzig Jahren keine Großbauprojekte mehr.
• Es sei „unmöglich“, Europas 30 bis 50 Jahre alte Chemiebasis mit sauberer Technologie zu erneuern, wie dies in den USA geschehe.
• Es werde „nicht viel übrig“ bleiben, wenn sich die europäische Regierung nicht mit den hohen Energiekosten, den CO2-Steuern und dem Mangel an Erneuerung befasst, die sich auf die europäische Chemiebranche auswirken.

Andere Signale

ExxonMobil has cautioned that it may withhold billions of dollars in climate-related investments in Europe unless Brussels reduces environmental regulations, which the company claims are responsible for the "deindustrialization of the European economy," according to a report by the Financial Times.

Exxon had earmarked $20 billion for decarbonisation projects between 2022 and 2027, the newspaper reported, citing an interview with Karen McKee, president of the company's product solutions division.

McKee told the Financial Times that Exxon was likely to prioritise "other parts of the world" due to increasing frustration at the regulatory burden linked to getting projects off the ground in Europe.

European governments are fearful that they cannot compete with the financial muscle of US President Joe Biden’s Inflation Reduction Act, which provides $369 billion in green subsidies aimed at boosting the rollout of clean energy technologies, or the low-cost, high-demand Chinese market. (Reuters)

Europe and China lead way with high-risk sites

Europe and China house the greatest number of high-risk sites, putting about 3.9 million barrels per day (bpd) of refining capacity in jeopardy, Wood Mackenzie found, based on its estimate of net cash margins, cost of carbon emissions, ownership, environmental investment and strategic value of refineries.

There are 11 European sites that account for 45 per cent of all high-risk plants, the report found. About 30 European refineries have already shut down since 2009, data from industry body Concawe shows, with nearly 90 still in operation.

Majors moving out

The stringent regulations, fluctuating political landscapes, and slim profit margins are prompting industry leaders to divest their shares in numerous jointly-owned refineries, and to either shut down or repurpose facilities.

The MIRO refinery located in Karlsruhe, and is the largest refinery in Germany, with a processing capacity of 14.9 million tonnes annually.

Esso Deutschland GmbH, a subsidiary of ExxonMobil, has sold its stake (2024) in Germany’s MIRO refinery to a subsidiary of the Liwathon Group, an international energy logistics company known for its global presence in oil storage.

Shell tried to sell their 32% stake in Miro Karlsruhe to Alcmene in 2021 and according to Reuters Shell tried it again in June 2024 to a Czech pipeline operator Mero but talks have ended without an agreement. (Reuters)

In 2023 Shell sold its 37.5pc stake in Germany's Schwedt to UK-based Prax. Shell also has announced the closure of its 147,000 b/d oil refinery in Wesseling, Germany, by 2025, with plans to convert the site into a facility for producing lubricant feedstock.

The Wesseling site’s hydrocracker unit will be repurposed to produce Group III base oils, which are primarily used in engines.

BP has announced plans in 2024 to permanently close a third of the crude distillation capacity at its 257,000 b/d Gelsenkirchen refinery in western Germany from 2025 and start co-processing biofuels at the plant's hydrocracker.

The Grangemouth refinery, as one of the biggest and one of the oldest in the UK, seems to be one more refinery closure, continuing the trend of shrinking refinery capacities in European and other OECD countries. The Grangemouth refinery would be the 5th refinery expected to be closed in the UK, after 4 refineries have already been closed with a combined capacity of around 432 kb/d

Italian energy company Eni announced its plans to convert its refinery in Livorno into a biofuels production facility (Jan 2024). As part of this transition, Eni has already halted crude oil imports and initiated the shutdown of lubricants production lines and the Topping plant at the Livorno refinery. This move is in line with Eni's broader strategy to shift towards more sustainable energy sources and reduce its carbon footprint. Eni has assured that fuel distribution in the area will not be affected by the conversion, as it plans to import finished and semi-finished products to meet local demand.

Photo credit: Flying Focus aerial photography

Chemicals

Europe's chemical industry enters 2024 in one of the deepest crises it has ever faced. Competition from Asia combined with weak demand caused chemical prices to drop while production costs have never been this high.

SABIC naphtha cracker will not restart

In May 2024 SABIC has undertaken a 3-month turnaround at the Chemelot site, the olefins 3 naphtha cracker will not restart thereafter which produces chemicals such as ethylene and propylene. According to industry estimates, the ethylene capacities of the Olefins 3 and 4 crackers are 550,000 tpy and 675,000 tpy, respectively.

BASF’s external investment

Germany’s BASF slashed another 1 billion euros ($1.1 billion) in annual costs at its Ludwigshafen headquarters, citing weak demand and high energy costs in its home market, highlighting the country's economic troubles (2023).

The annual cost savings will be reached by the end of 2026, affecting both production and administrative activities at its largest chemical complex.

Chemical giant BASF has been a pillar of German business for more than 150 years, For over 150 years, chemical giant BASF has been a cornerstone of German industry, driving innovation and contributing to the country's rise as a global industrial powerhouse. The company's products and technologies have helped make "Made in Germany" a symbol of quality and excellence around the world. However, BASF's latest major investment, a $10 billion state-of-the-art complex touted as the gold standard for sustainable production, is not being built in Germany. Instead, the company has chosen to construct the facility in China.

This decision has raised concerns about the competitiveness of Germany's industrial sector and the country's ability to attract major investments in cutting-edge technologies. It also highlights the growing importance of China as a global hub for innovation and sustainable manufacturing.

Biodiesel - Competition with Asia

Biodiesel oversupply has been exacerbated by a surge in Chinese biodiesel exports to the European Union. The alleged dumping of biodiesel mixed with cheaper feedstocks and mislabeling has created an environment where European producers struggle to compete.

Chevron idles biodiesel plant

Chevron has announced the furlough of workers at its German biodiesel plant in Oeding due to an oversupply in the market. The decision, influenced by challenging margins and alleged fraud from Chinese biodiesel flooding the market, highlights the complex dynamics within the European biodiesel industry.

Bp scales back bioplant

BP has scaled back plans for biofuels production at its refinery in Lingen plant in Germany, as result a 2 Billion hit on Q2 profits.

However,bp will invest $48.54 million to acquire a 15% stake in Lianyungang Jiaao New Energy - a renewable diesel and sustainable aviation fuel producer. (S&P Global 10, july 2024)

Shell pauses bioplant in Rotterdam

Shell Nederland Raffinaderij BV has suspended construction activities on a proposed 820,000-tonnes/year (tpy) biofuels plant already under way at the Shell Energy and Chemicals Park Rotterdam, the Netherlands, formerly known as the Pernis refinery

How does this effect inland barging?

Depot supplies for gasoil, gasoline and diesel in The Netherlands, Belgium, Germany, France and Switzerland will continue by barge as the demand will be there for the time being.

The closure of Shell Wesseling and reducing capacity of BP Gelschenkirchen will mean more product will be exported from the ARA region, meaning higher freight cost and longer sailing times. But feedstocks which once needed for these refineries or movements blend components will not longer be required.

The client base for barge brokers is expanding beyond just the major players in the market. In the past, only large companies were active in the market, but now trading houses, retailers, and even small trading firms with as few as 10 employees are utilising barges for transportation. For example, at the Miro Karlsruhe terminal, a new trading house has recently joined, and there is potential for another one to come on board in the near future.

The halt of several bio plants does mean a significant decrease in volume, as it could have led to an increased trading activity. Same goes for a decrease in refineries, leading to potential less blend activities and trades in the ARA region.

Zeitcharterschiffe könnten weniger interessant werden, da die Charterer ihre Flotte aufgrund geringerer Lade- und Entlademöglichkeiten nicht mehr optimieren können. Stattdessen könnten sie sich für COA und Spot für bestimmte Routen entscheiden, da die Makler die Flotte besser optimieren können.

Es bleibt abzuwarten, ob die neugewählten Regierungen in der Lage sein werden, die bestehenden Pläne zu überarbeiten und positive Veränderungen in der Branchenlandschaft herbeizuführen.