T&E: ‘European oil majors invest 8 times more in biofuels than in (green) hydrogen’

According to the NGO Transport & Environment, the ‘big bet’  of Europe’s major oil companies on hydrogen as the transport fuel for the future is not so big in reality. A new study on behalf of T&E shows that investments in biofuel refining are eight times bigger. T&E accuses oil producers of not being serious about investing in genuinely clean fuels but choosing the easy, unsustainable biofuels option.

While Europe’s oil giants like Shell, BP, Total, ENI, and Repsol are investing in hydrogen, this is only partly truly ‘green’. The study shows that most of their investments are going toward decreasing the carbon intensity of their refinery operations, not developing green transport fuels.

Geert Decock, electricity and energy manager at T&E, comments: “Oil producers are promoting hydrogen as their big bet for the future, but in reality, their investments in green hydrogen are pitiful. Instead, they are focusing their new refining capacity on biofuels, which cannot sustainably supply the world’s transport needs. This is not an industry pushing the boundaries of clean technology.”

Converting refining capacity

The study shows that oil demand for road transport in the EU will fall by almost a third in 2035 as more cars switch to electric. Moreover, from 2035, gasoline demand will continue to drop by 5% yearly. As a result, much current refining capacity will need to close or, to avoid becoming stranded assets, be converted into processing alternative fuels, T&E points out.

“Of the refining sector’s €39 billion in planned investments for alternative fuels up until 2030, almost 75% will go toward increasing biofuels production,” T&E  claims. In addition, €2 to €3 billion will be invested in new advanced biofuels (HVO) plants alone, doubling production capacity to 10 megatons by 2030.

This is four times higher than what can be sustainably sourced in the EU, according to T&E’s analysis. So it will most likely lead to limited ‘waste’ products like animal fats being taken from other industries and mass imports of dubious used cooking oil from abroad.

From grey to blue, but not so much green

Oil refining is one of the main hydrogen users today, with most using carbon-intensive grey hydrogen made from fossil fuels. However, according to the study, oil companies invest around €6,5 billion in so-called ‘low-carbon’ blue hydrogen to clean up their production processes. This is double what they spend on producing green hydrogen and e-fuels, which could be used to clean up aviation and shipping.

Hydrotreating and hydrocracking are processes used to reduce the sulfur content in finished oil products, and they consume vast amounts of hydrogen. According to the IEA’s 2019 report ‘The Future of Hydrogen’, 33% of all hydrogen produced today is used in refineries (38 MtH2/year).

“Where oil producers are investing in hydrogen, most is going toward replacing dirty grey hydrogen operations with blue hydrogen, which still uses polluting fossil gas. Instead of wasting their time on easy, short-term solutions, oil refiners should switch to producing green hydrogen and e-fuels for ships and planes today,” concludes Geert Decock.



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