The entire European community, which includes petroleum refineries and distribution companies on the supply end and the transportation industry at the consumer end, have started feeling the pressure from regulators as well as the society to bring a notable reduction in their contribution to greenhouse gas emissions and have a much greener footprint. In the current scenario, the consumption of fuel oil is witnessing significant pressure, with increasingly strict regulations being put on the use of fuel oil in the field of marine transportation.
Owing to this, companies are increasingly leaning towards the replacement of traditional fuels with greener options such as biofuels. Several fuel types for transportation have recently emerged as the concept of electric vehicles gains force and fuel cells are increasingly penetrating the wider market. These trends could have a significant impact on the future growth prospects of petroleum refineries, bringing in the necessity for a wave of changes that refinery operators need to inculcate to survive profitably in the next few years.
Some of the key options for refiners to adjust in the new scenario of market development include finding out the different potential ways in which biomass or biofuels can be included in the value chain of fuel production or finding where petroleum products or crude oil can be replaced with renewables. While it may seem an easy path towards such a transition there are several risks or barriers for refineries in switching to bio components.
While refiners in the region can benefit from some incentives for the ones who want to move to biofuels, implementation of any commercial and industrial strategy for switching to renewable feedstock will need time for implementation as refining is a well-established business with standard operations and configurations. This shift at institutional level will require time for adjusting the plants for train employees and produce effectively accordingly. Moreover, the switch can also be costly and refiners will be required to make vast investments. However, what can be done easily is regularly monitoring and considering in broad terms the vast options in terms of bio components that are available for commercial and industrial operations in a flexible way.