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Shell says EU carbon plan may harm refinery


Sat Nov 29, 2008 8:47am EST

AMSTERDAM, Nov 29 (Reuters) – European Union plans to tighten carbon trading rules after 2012 risk damaging the global competitiveness of Royal Dutch Shell’s (RDSa.L: QuoteProfileResearch,Stock Buzz) Pernis refinery, a Shell executive told a newspaper published on Saturday. Rob Routs, Executive Director of Downstream (oil products and chemicals), said the oil major was concerned about the consequences for Europe’s biggest oil refinery if the EU pursued its plans without the United States and China on board.


“We’re asking Brussels for a level playing field,” Routs said in an interview with Dutch daily Het Financieele Dagblad.

“If our refinery in Pernis will have to pay for every tonne of CO2, while that is not the case for our competitors in the United States or China, then that damages the competitive position of Pernis.”

The EU is working on a deal to fight climate change, which includes proposals to force carbon dioxide (CO2) emitters to buy permits for their greenhouse gas emissions from 2013 at auction.

The European Commission aims to tighten the carbon emissions trading scheme (ETS), the bloc’s central tool to protect the climate, as part of EU efforts to cut greenhouse gas emissions by 20 percent by 2020.

Routs emphasised that Shell’s 412,000 barrels-a-day Rotterdam-based refinery remained one of the company’s flagships. But he said the firm had still not made a final decision on a plan to modernise the plant.

The company has said it plans to shift the focus of Pernis towards wider exports and away from traditional markets, and that it is considering investing 1 billion euros ($1.3 billion) in the refinery over the next five to seven years. (Reporting by Catherine Hornby, editing by Anthony Barker)


© Thomson Reuters 2008 All rights reserved


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