European refineries’ costs are set to rise from around €0.06 a barrel to €0.23 under proposed post-2020 reforms to the EU ETS, according to lobby group FuelsEurope.
“A carbon market is fundamentally the right approach, but we see the pathway to global pricing of carbon as key to restoring a global level playing field. We need to be realistic. That will take time,” FuelsEurope’s head John Cooper told an industry event in Brussels, Reuters reported on Tuesday.
FuelsEurope said refiners buy around 23% of their EUA requirement under the current Phase 3 (2013-2020), giving a €0.06 cost assuming an EUA price of €10. Secondary market prices are currently half of that.
The body said refiners will need to buy as much as 30% of their requirement over Phase 4 (2021-2030).
A European Commission study of ETS costs for several industries found that the refinery sector have been able to pass through more than 80% of its ETS costs to their customers.
By Ben Garside – firstname.lastname@example.org