The Clean Industrial Deal should be the cornerstone initiative to affirm the fuel manufacturing sector’s role in achieving EU’s climate and competitiveness goals

Position Paper Fuels Europe

Achieving the EU’s 2050 climate neutrality goal requires a coordinated industrial strategy that protects competitiveness, fosters investment, promotes industrial transformation, and addresses the energy trilemma of sustainability, affordability, and security of supply. In this context, the European Commission, in the framework of the preparation of the Clean Industrial Deal (CID) should consult all industrial sectors that are, and will be critical to Europe’s competitiveness and sustainability.

Liquid fuels and the refining industry are critical for Europe’s energy security, affordable mobility, and industrial value chains. A low-carbon and renewable transition is essential to achieving the EU’s 2050 climate neutrality goal while maintaining economic competitiveness and social stability. Europe’s refining complexes not only produce fuels for road, non-road, military, marine and air transport: they also provide feedstock to Europe’s petrochemical industry, produce lubricants and other products widely used in industries, and are able to reprocess plastic and other waste.

Today, liquid fuels and feedstock for the petrochemical industry are in majority of fossil origin and, by leveraging innovation, they will be progressively replaced by low-carbon and renewable products. These, in combination with other low-carbon solutions like electricity and hydrogen, will offer the optimal answer in terms of energy security, economic efficiency, resilience, social impact and industrial competitiveness.

The CID must safeguard the competitiveness, domestic jobs, and domestic production capacity of industries essential to Europe’s economy and climate goals. A competitive low-carbon transformation of the fuel manufacturing industry is possible and necessary. Therefore, investors need clear, long-term signals from EU institutions, through measures preventing carbon and investment leakage and de-industrialisation.

FuelsEurope’s key recommendations are as follows:

Uphold the recognition of the fuel manufacturing industry as a strategic sector and support the low-carbon transition of refining through a dedicated action plan developed in collaboration with stakeholders across the value chain. Ensure policies maintain refineries as essential contributors to energy security and industrial competitiveness.
Implement true technology-neutral policies. Implement science-based, cost-effective solutions that prioritize greenhouse gas (GHG) reduction across the lifecycle of products. Renewable and low-carbon fuels must play a central role in achieving emissions targets.
Minimize regulatory overlaps, assess impacts on competitiveness, and defer implementation of conflicting measures until assessed as fit-for-purpose. Ensure inclusive stakeholder consultations to design fit-for-purpose legislation.
Strengthen carbon leakage protection through fair ETS benchmarks, export mechanisms under the Carbon Border Adjustment Mechanism (CBAM), and trade dialogues. Avoid policies that risk de-industrialization or uneven burdens across EU regions.
Simplify permitting processes, reduce administrative burdens, and ensure regulatory stability to accelerate investments. Establish mechanisms such as Contracts for Difference (CfDs) to de-risk projects and attract funding for breakthrough low-carbon technologies.

These recommendations are essential to achieve the following:

Energy security: liquid fuels are critical to transport, defence, and industrial supply chains. Transitioning to renewable options safeguards Europe’s strategic autonomy.
Economic stability: The liquid fuels and fuel manufacturing sector supports jobs, innovation, and regional development. Losing this capacity risks de-industrialization and economic vulnerability.
Supporting the energy transition: Investments of up to €300 billion are needed by 2035 for renewable fuels and related technologies. A clear policy framework is essential to mobilize these resources.