-
The Refining Sector in Greece
Ministry for Reconstruction of
Production, Environment, and Energy-Greece
5th EU Refining Forum 15 June 2015, Brussels
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The Refining Industry in Greece
2
Company Refinery
Refining capacity
Nelson complexity
factor Type Million tones
per year
Thousand
barrels per
day
Hellenic Petroleum
Aspropyrgos 7.5 145 11.0 Cracking (FCC)
Elefsina 5.0 100 8.1 Hydrocracking
Thessaloniki 3.5 70 7.3 Hydroskimming
Motor Oil Korinthos 9 180 10.4 Cracking (FCC)
Total 25 495 9.6 (EU: 7.6)
Source: Ministry/IOBE
The refining sector in Greece: Contribution to the Economy and Prospects (IOBE Danchev, Maniatis, 2014)
-
The demand for oil products has fallen sharply in Greece and in the wider
region since the start of the economic crisis
3
0
5
10
15
20
25
30
35
Greece Italy Spain Portugal Turkey S. Europe
mill
ion
to
nn
es
Gasoline
2007 2012
0
10
20
30
40
50
60
70
80
90
100
Greece Italy Spain Portugal Turkey S. Europe
mill
ion
to
nn
es
Diesel
2007 2012
-15,7%
Source: Eurostat/Petder *South Europe here includes Greece, Italy, Spain, Portugal, Turkey, Cyprus, Malta, Bulgaria, Romania, Slovenia and Croatia.
Key drivers of the demand contraction Economic recession Tax hikes on oil products Weather conditions
Source: Ministry
2008 2012 2013 2013/12 2013/08
Domestic
market (%) Change
Other products 3214 1748 1717 -2% -47%
Heating oil 2457 1863 908 -51% -63% Diesel oil 2976 1925 2009 4% -32% Gasoline 4059 2943 2670 -9% -34% Subtotal 12706 8479 7304 -14% -43% International
market Marine heavy
fuel oil 2815 2064 1912 -7% -32% Marine Diesel 339 264 281 6% -17% Jet fuel oil 965 641 656 2% -32% Subtotal 4119 2969 2849 -4% -31% Total 16825 11448 10153 -11% -40%
-26,9%
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The domestic production has rocketed due to stronger exports
4
0
5
10
15
20
25
30
mil
lion
to
ne
s
Production
Demand (including international marine bunkers)
Exports
Imports
0%
10%
20%
30%
40%
50%
60%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Share of exports in production
Source: Eurostat
-
Trade surplus of petroleum products since 2009, with 86% of the exports going to non-EU markets
5
-4
-2
0
2
4
6
8
mil
lion
to
ne
s
Trade balance of petroleum products
2.8
0.1
0.2
0.2
0.2
0.3
0.3
0.4
0.4
0.5
0.5
0.5
0.5
0.6
0.7
2.1
0 1 2 3
Other
Montenegro
UAE
Egypt
Italy
Saudi Arabia
Cyprus
USA
Bulgaria
Israel
Singapore
Gibraltar
FYROM
Libya
Lebanon
Turkey
Billion €
Main export destinations for petroleum products
ΕU 28: 14%
Third countries:
86%
Source: Εurostat
-
The cost of capital has increased, with a negative impact on the profitability of the sector
6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
01
/01
/20
03
01
/07
/20
03
01
/01
/20
04
01
/07
/20
04
01
/01
/20
05
01
/07
/20
05
01
/01
/20
06
01
/07
/20
06
01
/01
/20
07
01
/07
/20
07
01
/01
/20
08
01
/07
/20
08
01
/01
/20
09
01
/07
/20
09
01
/01
/20
10
01
/07
/20
10
01
/01
/20
11
01
/07
/20
11
01
/01
/20
12
01
/07
/20
12
01
/01
/20
13
01
/07
/20
13
(%
) Interest rate differentials of business loans in Greece vs Eurozone
Up to 1 year
Over 1 and up to 5 years
Over 5 years
Total
Source: ECB
-
The Gross value added approached 1 bn € with significant impact on employment
7
0.0%
2.0%
4.0%
6.0%
8.0%
0.00.20.40.60.81.01.2
Shar
e in
Man
ufa
ctu
rin
g
Bill
ion
€
Gross value added
GVA Share in manufacturing 0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Bill
ion
€
GVA of industry sectors
60
70
80
90
100
110
120
130
Industrial Production Index (2005=100)
Manufacturing
Manufacture of refined petroleum products
0.0
1.0
2.0
3.0
4.0
5.0
2005 2006 2007 2008 2009 2010 2011 2012*
tho
usa
nd
Total employment
Source: EL.STAT.
Petroleum products
Metal products
Food 1 bn €
-
Investments totaling 2,7 billion € in 2009-2012 when GDP contracted by more than 20%
8 Source: EL.STAT 2011/Data processing IOBE
• Large part of the operating surplus is reinvested • Investment intensity index exceeded 28% on average for the period 2005-2011
Sectors
Refining
-
Refineries’ activity contributed about 3,8 bn € in 2012 (2% GDP)
9 Source: IOBE
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Direct Indirect Induced Total
€ b
illio
n
Impact on GDP
0
5
10
15
20
25
30
35
40
45
Direct Indirect Induced Total
Tho
usa
nd
s
Impact on Employment
1,4
0,6
1,8 3,8
4100
7200
29200 40500
-
The key EU legislation that has a real or potential impact on the competitiveness of the refining sector
10 Source: IOBE/Ministry
Emission Trading System (ETS)
• Estimated cost of direct emissions 2013-2020 and current protection (Refining finally included in carbon leakage list till 2020, but still risk for post 2020) :
• 5€/tCO2 : €108 million
• 30 €/tCO2 : €648 million
• Higher carbon leakage risk from indirect emissions in Greece:
• High cost of indirect emissions (electricity prod. Mix),(own produced products instead of gas)
• High trade intensity i.e. >50% (significantly higher than EU -38%)
Industrial Emissions Directive (IED)
• The recently adopted BREFs for refineries (Oct14)
• Impose compliance with stricter BAT-ELVs
• Provide tools for a cost-effective reduction for air emissions, i.e. bubble concept for SO2 and NOX
• Compliance cost estimated at €70-300 million per refinery (Europia 2013)
Fuel Quality Directive (FQD)
• Reduction of the carbon footprint, increased use of bio fuels and specification changes (e.g. sulphur, aromatics etc)
• Adjustment cost for the refineries:
• Additional processing requirements
• Substitution of fossil-based fuels with bio fuels
• Potentially higher CO2 emissions during the production process
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Measures that could be taken to safeguard the competitiveness of the refining sector
11 Source: IOBE/ Ministry
EU level
• ETS – Carbon leakage:
• Allocation of allowances to the refining sector after 2019 as well
• Balanced approach in the implementation of policy measures on climate, energy and the environment
• Take into account impact on competitiveness
• Take into account the fitness check’ conclusions before deciding on changes in the legislation that affect the refining sector
• Avoid unilateral EU measures
• Push for global agreement in COP Paris 2015 on greenhouse gas reduction
Domestic level
• Measures for Energy cost reductions:
• Excise duty on electricity (2,5 €/Mwh) and natural gas (5,4 €/Mwh)
• Contribution to RES (ETMEAR) ( 2,23 €/Mwh),
• Indirect CO2 emissions cost (electricity) 4,44 €/Mwh
• Public Service Obligations (YKO) (4,14 €/Mwh )
• Fully implement the adopted measures for the elimination of the illicit fuel trade (trade oil product sector)
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Thank you for your attention
www.ypeka.gr
Directorate for Hydrocarbons CHRYSOCHOOU Tasos [email protected]
Ministry for Reconstruction of Production,
Environment and Energy Greece
http://www.ypeka.gr/http://www.ypeka.gr/http://www.ypeka.gr/