reduced, the cost of emissions in excess of the cap has risen. Since 2013, total European refinery emissions have fallen 15% ( EEA, 2025 ) (see Figure 1 ), with closures of 13 fossil refineries in the region ( Concawe, 2025 ) contributing up to a third of the emissions reduction. Over the same time period, nine bio- refineries were added or converted from fossil refineries. As the incremental cost of emissions has risen, this has incentivised adaptation and begun
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Figure 2 EU ETS forecast scenario
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pruning the refining capacity base. The industry has pursued decarbonisation from: • Pursuing quick wins and energy efficiency projects. • Capital projects to decarbonise existing operations. 50 55
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Figure 3 European refinery count and total annual emissions ( Concawe, 2025 ) ( EEA, 2025 )
Understanding the emissions cost impact of optimisation and project assessments is moving from a secondary screening check to a primary project driver. Ensuring the technical and economic representations of emissions in decision-making tools are correct should be part of cold-eyes review processes. Refinery capacity and configuration shifts Capacity changes and closures have delivered additional throughput reductions in the region, with Europe’s decarbonisation wave reshaping portfolios alongside cutting CO₂ intensity (see Figure 3 ). Operators are paring back throughput on older trains, with many closures of ageing, mid-scale plants with heavier ETS exposure. Since 2013, the average characteristic of an EU refinery facing closure was 65 years old and 115 KBD capacity, while the remaining stock
• Diversification into biofuels and alternative feedstocks or full conversion into bio-refineries. • Capacity reduction and closures for those without the appetite for high-cost and long- timeline capital projects. A typical 150 KBD fossil refinery in Europe currently faces a €30 million annual emissions cost, climbing to more than €100 million in the next decade as the free allocation further reduces and the unit cost of emissions rises. This is illustrated in Figure 2 on a euro-per- barrel basis. For refiners factoring the price of decarbonisation into their future business cases, utilising an independent third party to assess options for capital projects, configuration changes, and new technologies can quickly develop robust board-level decision-ready strategies.
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