Published by Global Banking & Finance Review®
Posted on October 1, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleEuropean refineries are investing in green projects to remain viable amid regulatory pressures and competition. Essar and PKN Orlen lead with investments in sustainable fuels.
By Robert Harvey and Enes Tunagur
LONDON (Reuters) -European oil refineries are having to invest in energy transition projects as modern and more complex competitors in Asia, the Middle East and Africa have prompted plant closures in Europe, refining industry executives said on Wednesday.
"I suppose we're all in a last man standing game to make sure we don't close," Essar managing partner Tony Fountain said, speaking at the Argus Global Markets conference in London.
Pressured by environmental regulations and competition from modern plants, European refineries have been trying to ramp up production of cleaner products such as sustainable aviation fuel and biofuels to meet regulatory demand for such fuels.
"The regulatory environment is not anymore just telling us what you can do. It is more telling us what we need to become to survive in this market. It's not a constraint anymore. It's like a business model for us," said Lukasz Strupczewski, executive director of crude supply at PKN Orlen.
Essar plans to make a final investment decision on its major blue hydrogen plant in the UK at the turn of the year, Fountain said. Essar also won government backing for a sustainable aviation fuel (SAF) plant at Stanlow this year.
"Decarbonisation strategy and the advanced fuel strategy are sort of things that we think we need to do to make sure that we shift ourselves from being probably middle of the pack on a European ranking scale to being in the first quartile," Fountain said.
PKN Orlen, meanwhile, aims to increase co-processing to increase SAF output and invest in advanced biofuel production capacity to help meet demand for such fuels in the European Union on the back of regulatory regimes like RefuelEU Aviation and FuelEU Maritime, Strupczewski said.
Fountain said government support was important if it wants to stop the UK from becoming over-dependent on imports in the event of further closures.
"If I were the government, I would be worried if there were less than four refineries in the UK, because then you really are getting to a very high level of imports," he said, adding that the UK is now importing around 30% of its fuel demand.
(Reporting by Robert Harvey and Enes Tunagur, editing by Ed Osmond)
Sustainable aviation fuel (SAF) is a type of biofuel used to power aircraft, produced from renewable resources to reduce greenhouse gas emissions compared to traditional jet fuel.
Biofuel is a type of fuel derived from organic materials, such as plants and animal waste, used as an alternative to fossil fuels to reduce carbon emissions.
Decarbonization refers to the process of reducing carbon dioxide emissions associated with energy production and consumption, often through the adoption of cleaner energy sources.
Energy transition is the shift from fossil fuel-based energy systems to renewable energy sources, aimed at reducing environmental impact and promoting sustainability.
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