With the EU committed to cutting emissions and ensuring energy security, the role of the liquid fuels sector – a long-established cornerstone of European mobility and industry – is in sharp focus.
At a recent policy dinner at the European Parliament in Strasbourg, MEPs, industry leaders, and stakeholders explored how to unlock investment in the liquid fuels sector, achieve Green Deal goals, and secure Europe’s long-term economic competitiveness.
The discussion took place at a critical time. The European Union has set ambitious targets for decarbonisation, yet the path to achieving them remains contested. While electrification is often presented as the dominant solution, many experts argue that a technology-neutral approach is essential. Liquid fuels, particularly renewable and synthetic alternatives, have the potential to play a pivotal role.
Italian MEP Elena Donazzan, co-host of the dinner, told guests that while electrification is essential, a comprehensive approach to decarbonization should consider diverse technologies, particularly in addressing the complex challenges of hard-to-electrify sectors.
Achieving climate neutrality by 2050 cannot realistically be reached with a framework that forces electricity as the only solution for decarbonisation
“Achieving climate neutrality by 2050 cannot realistically be reached with the tools we have today, and with a framework that forces electricity as the only solution for decarbonisation,” MEP Donazzan said.
Liana Gouta, Director General of FuelsEurope, echoed Donazzan’s sentiments, arguing that Europe must adopt a genuinely strategic approach to the transition that reflects the differing needs of industries that are critical to European competitiveness. She told those at the event that because liquid fuels are essential for many core industries the sector is integral to the continent’s economic system.
“We need a transition strategy for our sector that will serve as a blueprint for the right policy framework,” she argued. “If our sector fails to remain competitive and transition to renewable fuels and products, what happens to all those sectors that rely on us for their uninterrupted supply?”
Guests heard that without a clear transition strategy, there is a real risk that Europe will lose industrial capacity and jobs to external competitors. Key to achieving that transition will be a regulatory framework that provides European liquid fuel producers with the certainty they need to unlock investment in developing lower-carbon alternatives to traditional liquid fuels.
This theme was expanded by MEP Donazzan’s fellow co-host, Spanish MEP Raul de la Hoz Quintano who stressed the importance of creating a stable operating environment that encourages long-term investment by business.
“The Clean Industrial Deal must be mainly ambitious, but also pragmatic,” Quintano argued, cautioning that the consequences of an overly rigid approach would be felt across the continent. “A poorly designed policy would weaken Europe’s economy while increasing our reliance on external suppliers,” he added.
Quintano’s contribution reflected industry concerns that excessive regulatory complexity and uncertainty could deter the very investments needed to achieve Europe’s climate goals. Instead, he called for a balanced approach that recognises the role of the refining sector in maintaining a stable supply of liquid fuels while advancing decarbonisation efforts.
The challenges of that broader energy trilemma - how to balance sustainability, affordability, and security of supply, were also raised by other speakers. Tsjerk Terpstra, Policy Officer for Renewable Energy and Bioeconomy at the European Commission’s DG AGRI B2 emphasised the role that biofuels can play in reinforcing energy security whilst providing economic opportunities in rural areas.
It was a point echoed by Monika Dulian from the Permanent Representation of Poland to the EU who pointed to the need for policies that strengthen Europe’s industrial base rather than weakening it through overregulation. “We need to ensure that our regulations help businesses to be more competitive on the global market,” she told guests.
The need for an inclusive and strategic approach to the energy transition emerged as the key theme throughout the evening. Andrea di Stefano, Head of Market Design and Regulatory Affairs at Eni stressed the importance of establishing mechanisms that can help companies that are ready to invest in conversion projects.
If our sector fails to remain competitive and transition to renewable fuels and products, what happens to all those sectors that rely on us for their uninterrupted supply?
“We need to protect European players from unfair competition and ensure long-term investment certainty to support the energy transition,” di Stefano said. “Refining is a strategic industrial capability, and we must support those who want to invest in converting existing plants into new production sites for fully renewable products.”
That shift, however, requires a clear strategy, regulatory certainty, and financial incentives that make large-scale investments viable. Liana Gouta expressed concern from the liquid fuels industry that these fundamental building blocks for a transition are currently not in place.
“There is no doubt that Europe is at a crossroads,” Gouta explained. “The need for a competitive, innovative, and robust European industry with a clear decision plan is more than urgent. If this is not in place, Europe risks its Green Deal goals triggering deindustrialisation. Ignoring the fuels industry is not an option for Europe.”
Fundamentally, on all sides of the discussion, there was a shared view that the industry is simply too important to be ignored. The transition to net zero is complex and challenging and can only be delivered through close collaboration between policymakers and industry. That partnership approach can potentially provide a foundation that supports innovation to deliver solutions beyond electrification.
As MEP Donazzan explained, “I believe that when someone asks to contribute to a debate, to be heard and included, especially if they represent a supply chain that invests billions in Europe and creates jobs in Europe, they should be listened to.”
The important European industries that rely upon liquid fuels to operate will be hoping that Donazzan’s colleagues and regulators are prepared to listen to Europe’s liquid fuel industry too. The very survival of businesses in those sectors may depend upon it - as, ultimately, could Europe’s ability to deliver a low-carbon future.
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