This is the main conclusion drawn from the discussion “The Twilight of Oil – a Dream or a Real Scenario”, which took place during the XXXIII Economic Forum in Karpacz. The participants were: Aneta Wilmańska, Director of the Orlen Representative Office in Brussels, Dr. Leszek Wiwała, President of the Management Board and CEO of the Polish Organization of Petroleum Industry and Trade, Dr. Tomasz Zieliński, President of the Management Board of the Polish Chamber of Chemical Industry, and Piotr Szlagowski-Budacz, Strategy Director at Qemetica.
– Already in the 1970s, people were talking about the end of oil, indicating that it would last for 50 years. Half a century has passed and today we can say again that there will be enough oil for another 50 years, although its consumption is several times higher than before – noted Dr. Leszek Wiwała. – It seems that today the twilight of oil is coming, but it is a very slow process. Due to climate issues, it is a civilizational necessity to move to low-emission fuels, therefore we will consume less and less oil, especially in Europe and the United States. However, if we look at the forecasts of economies such as China or India, over the next two decades they will consume much more oil than the reduction that will take place in the EU and the USA – he assessed.
A matter of safety
Dr. Wiwała drew attention to the significance of the Russia-Ukraine war. The armed conflict taking place beyond our eastern border meant that the problem of energy security, which has always been important for Poland, was also noticed in Brussels.
– It is important for the economy to develop, for us to be strong, also militarily, but the key is to be able to move at all. Not to mention such trivial things as the fact that military equipment is currently powered by oil and diesel fuel – he concluded.
Therefore, it is extremely important to maintain adequate fuel reserves and, according to Leszek Wiwała, reform is necessary here.
– Since it is such a dangerous time, who should be responsible for fuel supplies in the event of a crisis? In Slovakia, the Czech Republic, and Germany, the state is entirely responsible for the system of reserves and stocks. In Poland, entrepreneurs are the main ones responsible. This should not be the case – he stated.
According to him, in the short term, even next year, there should be a 50/50 division of this responsibility, i.e. the Government Agency for Strategic Reserves should be responsible for maintaining reserves for 45 days, and state entities for the next 45 days.
– We need to prepare for difficult times here and now. Considering that there is a war going on behind our eastern border, we need to strive for new warehouses and reforms so that if it is necessary to use the stock system, it is as flexible and effective as possible – emphasized the president of the Polish Organization of Oil Industry and Trade.
Necessary balance
And how does Brussels view the problem of energy security? This perspective was described by Aneta Wilmańska. As she said, the war in Ukraine contributed to the discussion on security by EU decision-makers.
– At the beginning of the previous term, the European Commission focused on climate policy as a way to escape forward. Today, I have the impression that we are at a moment when it is clear that we must weigh not only the issues of climate protection, which are indisputable, but at the same time accept that security and a competitive economy are also priorities. This is a complex and enormous challenge. Unfortunately, without fuels and energy that are affordable and from stable sources, it will not be possible to achieve the assumed goals. I hope that the industry will participate in the discussion on how to achieve these priorities on an ongoing basis – she assessed.
However, as she recalled, the President of the European Commission, Ursula von der Leyen, when seeking re-election as President, announced that she would maintain the ambitious goal of a 90% reduction in greenhouse gas emissions by 2040 (compared to 1990), and the Commission’s analytical documents show that this ambition will be accompanied by a strong decline in the consumption of fossil fuels in the EU, at the level of 74% compared to 2021.
– The pace of moving away from oil will be determined to a very large extent by how quickly and on what scale alternative fuel and energy sources to fossil fuels will develop. It is relatively easy to adopt ambitious goals, e.g. in the directive on the promotion of renewable energy sources in relation to individual sectors of the use of RES, reducing emission intensity or regarding the use of green hydrogen. However, it is very difficult to create conditions in the Member States to achieve them, the necessary investment facilities are huge, and some technologies are not yet available – she concluded.
In her opinion, greater flexibility in the implementation of the European Green Deal is necessary.
– We have adopted the Fit for 55 package and other EZŁ regulations at the EU level, now the Member States must introduce the directives into their national legal systems – said the Orlen representative. As she added, now individual industrial sectors, citizens, SMEs are beginning to understand more fully what ambitious goals, often very precisely defined in the law during the previous term of the European Parliament and the Commission, entail. They entail very high costs. Therefore, as Aneta Wilmańska said, it is so important that entities – whether states or entrepreneurs implementing investments – can choose the most cost-effective paths for them to meet the adopted climate ambitions.
Dr. Tomasz Zieliński also does not imagine the final twilight of oil. – Oil has a share in many products that we use today. Fuels constitute a certain percentage, while the entire mass of oil processing is a huge stream of raw materials, semi-finished products for petrochemistry and many other applications – he reminded. – It is also hard to imagine that all product chains would suddenly be cut off – he added.
Are green substitutes possible? Yes, but as Dr. Zieliński emphasized, there are 25 years left until 2050, which is not much time to convert the huge industrial sector to supply green products.
– We have little time, and many market and geopolitical adversities. Climate change is a fact and no one denies it. Considering that this market has to reshape itself, perhaps the limitations of oil applications will be different or it should go towards its more efficient use – said the president of the Polish Chamber of Chemical Industry, mentioning more effective technological solutions. – If we add carbon dioxide capture technologies to this, there is a chance that we will somehow meet the goals. The key is for the European Commission to understand in the new five-year plan that this is a serious challenge, that we cannot tell millions of people working in the chemical industry in Europe to switch to cucumber farming now – he said.
In June, the Polish Chamber of Chemical Industry published the Polish Chemistry Manifesto addressed to both the Polish and EU administrations, in which it identified key challenges, including mechanisms supporting competitiveness.
Uncertain companies
The image of the processes currently taking place in enterprises is presented by the Decarbonization Index of the Polish Economy, developed by Qemetica, Employers of Poland and the Instead foundation. It turns out that companies take decarbonization into account very strongly in their plans and strategies, but significantly less in investment outlays and on the development of human capital.
– The plans are still on paper, because the question is where the path to decarbonization should lead. In most cases, we compete at least regionally and this cost efficiency is key for each of our clients – indicated Piotr Szlagowski-Budacz.
The second trend revealed in the study is the disproportion between large companies that make capital expenditure related to the energy transformation and medium-sized and small enterprises.
– It may be difficult to maintain value chains with current smaller-scale partners as subcontractors or substrate suppliers if this planning and investment adjustment does not take place there as well – he stressed.
The strategy director at Qemetica pointed out that until there is an official change in the EU’s climate goals, we must strive to meet them.
– It would be great to hear a new assessment from the European Commission as to whether we, as Europe, are able to achieve the goals within the set timetable, but companies must take action as long as these regulations are in force. We can postulate corrections, as in the Antwerp Declaration or the Polish Chemistry Manifesto, but these regulations are in force and we cannot be left behind until the EU course is corrected – he noted.
Time to change your mindset
Dr. Tomasz Zieliński emphasized that the prescriptive system used so far by the European Commission has not worked.
– It doesn’t work because the competitiveness of heavy industry and many other sectors is being lost. The United States quickly rebuilt its position in the world to become a net exporter of many chemicals. The model in which the European Commission operates today means that Europe may become a sales market – he warned.
Aneta Wilmańska spoke similarly.
– I hope that the new Commission, EU officials, but also the European Parliament, which participates in the decision-making process alongside the Member States, are aware that effective decarbonization requires not only ambitious goals, but also instruments that support and encourage investments in zero- and low-emission solutions – she noted. – Individual industries are ready for dialogue at the EU forum with demands and arguments about what industry needs to go through the transformation process in a cost-effective manner and build competitive advantages. The stakes are very high: we cannot afford to fail – she emphasized.
Piotr Szlagowski-Budacz reminded that the European Central Bank is preparing a report that is to be the basis for discussion on the new agenda for the European Commission. This will determine whether there will be a flow of money that will remove risk from entrepreneurs.
Organizer
Press materials
Relationship Partner
Press materials
