Decarbonising Europe’s Refining and Liquid Fuel Production — Insights from the Concawe-S&P Global Study

Concawe Review 34.1 - Article 4: This article provides a technical synthesis of an S&P Global Commodity Insights study commissioned by Concawe to assess the potential evolution of Europe’s refining and liquid fuel production sectors to 2050 under a net-zero greenhouse gas emissions objective. Two illustrative scenarios are examined. The ‘Max Electron’ scenario assumes rapid electrification across transport modes, including a phase-out of internal combustion engine vehicles after 2035. The ‘More Molecule’ scenario achieves the same net-zero outcome through a greater reliance on low-carbon fuels, including biofuels and renewable fuels of non-biological origin (RFNBOs).

Both scenarios project a marked reduction in fossil fuel demand, resulting in a significant contraction of conventional refining capacity— from approximately 13 million barrels per day in 2024 to below 2.1 million barrels per day by 2050. Many refineries are expected to cease operations or be repurposed into integrated energy hubs producing low-carbon fuels. Declining refinery margins reinforce the need for structural transformation of the sector.

The demand for advanced biofuels and RFNBOs increases substantially, necessitating large-scale deployment of renewable electricity, hydrogen production and carbon management infrastructure. While sustainable biomass availability appears sufficient in principle, higher demand in the ‘More Molecule’ scenario may require enhancing its mobilisation and optimising its supply chain.

The analysis also highlights implications for security of supply. Although reduced reliance on crude oil improves diversification, the EU-27 + 3 region is expected to remain dependent on imports of e-fuels, hydrogen carriers and certain refined products. Although both scenarios show heavy dependance on imports for jet fuel, the ‘More Molecule’ scenario shows a better equilibrium between supply and demand for other products. Impacts on petrochemical feedstocks and speciality products may further increase import requirements.

Overall, both scenarios demonstrate that net-zero emissions by 2050 are technically achievable but present distinct challenges. A balanced approach combining electrification and sustainable fuels is identified as the most robust pathway to support energy system resilience, industrial competitiveness and a secure transition to climate neutrality.