The effects of existing environmental requirements in Germany and other EU countries on the competitiveness of the german oil industry: Summary version

Open Access

Abstract

Under a contract from the Federal Ministry for Economics and Employment, the DIW Berlin, the Engler-Bunte-Institut and the Fraunhofer-Institut für Systemtechnik und Innovationsforschung, both in Karlsruhe, have investigated influence of the environmental requirements prevailing in Germany and other EU member states on the competitive situation of the German oil industry. The costs of environmental protection measures were analyzed in the refining, storage and retail sectors in Germany and 13 other European countries (Austria, Belgium, Denmark, France, Italy, The Netherlands, Sweden, Spain, The United Kingdom, Poland, Slovakia, The Czech Republic and Hungary). Existing regulations for allowable emissions to the air, water and soil (including TA Luft, the 13. BImSchV and the EU directive for limitation of VOC emissions in storage facilities) as well as requirements for product qualities (e.g. reduction of sulphur in transport fuels and the introduction of biofuels) were considered. Those measures which only have to be implemented by 2009 were also included in the analysis. Starting from the state of plant in the industry (to the extent that this data was available) and the state of national legislation at the end of 2002, the costs to the national oil industries of implementing these requirements in the different countries were determined. In 2002 Germany had stricter requirements in many areas in comparison with other countries investigated and so requires less investment in future to meet these requirements. On the basis of this data the additional cost to the German oil industry (including filling stations) was estimated to be 1,9 Euro per ton of crude processed, of which 0,4 Euro could be attributed to the refining sector and 1,5 Euro to the filling stations. The additional costs in the storage area were relatively small. If the oil industries in all the countries investigated actually reached the same degree of environmental protection by 2009, then the costs would be equal at this time. In fact, however, current legislation shows that Germany intends to maintain its position of "early deployer", so that these cost differences will not be eliminated. The later deployers have the advantage over the early deployers that they invest later and can therefore profit from interest gains. Furthermore they are also able to benefit from the technical progress made over the intervening period.