Oil Refining Executive Sees European Plants Halting After IMO 2020
- U.K. refiner Essar says weak margins may shutter older plants
- Analysts see more competitive environment in next few years
Stanlow oil refinery stands in Ellesmere, U.K.
Photographer: Paul Thomas/Bloomberg
Multiple oil refineries in Europe will be too unprofitable to continue trading once the industry has dealt with sweeping new rules governing shipping fuel that start next year, according to an executive at a U.K. plant.
Refineries globally are bracing for one of the biggest mandated changes in the the industry’s history -- rules forcing the vast majority of ships to use fuel containing less sulfur. The regulations, widely known as IMO 2020, start in January and have been touted as positive for companies that turn crude into more valuable products. But smaller, simpler plants in Europe often churn out excess gasoline, as well as the type of fuel that will soon become outlawed for most vessels.