2020 Energy Community Oil Forum: Trends and challenges during turbulent times
Oil
The 12th Energy Community Oil Forum focused on the key trends and challenges facing the oil sector. Opening the Forum, the Minister of Mining and Energy of Serbia, H.E. Aleksandar Antic, highlighted the impacts of the COVID-19 pandemic on the oil industry and outlined Serbia’s progress in the implementation of the oil acquis. The Forum, which took place virtually on 15 and 16 of September, underlined that the current pandemic served as a reminder of just how vital access to energy is for citizens and business.
The European Commission explained that the different risks associated with a pandemic are fundamentally new for energy security and are directly dependent on the pandemic’s intensity and duration. The contraction in oil demand risks leading to a decrease in the level of emergency stocks, which are usually calculated on the basis of previous year’s consumption. The Contracting Parties were encouraged to make use of flexibilities under the Oil Stocks Directive to build future stocks which are more representative of their future needs than estimations based on 2020 consumption.
To ensure that the Contracting Parties apply up-to-date methods for calculating their stockholding obligations, the Forum proposed the adoption of a Ministerial Council decision in 2020 concerning the implementation of the Commission Implementing Directive (EU) 2018/1581 amending the Oil Stocks Directive 2009/119/EC.
Director of the Energy Community Secretariat, Janez Kopač, recalled the importance of implementation of the Oil Stocks Directive. With the exception of Serbia and North Macedonia, all Contracting Parties have not made any genuine progress in implementation, while some have not even transposed the Directive into national law. Director Kopač also underlined the importance of the Energy Community not staying behind when it comes to the European Green Deal on tackling climate and other environmental challenges.
As oil will remain an important part of the energy mix, it is important that the sector adapts to the chancing policy environment. The Sulphur in Fuels Directive, applicable to marine fuels since 1 January 2020, and the Fuel Quality Directive, adopted only by way of a recommendation in the Energy Community, constitute some examples of how the oil industry is reducing its environmental footprint. The Forum supported the Secretariat’s proposal to recommend to the Ministerial Council to consider incorporating the latest version of the Fuel Quality Directive into the Energy Community acquis in a binding manner.
Other challenges at play addressed by the 2020 Oil Forum include increased cybersecurity risks and the development of new technologies such as hydrogen production and carbon capture.