Sync: Bloomberg LP
French energy group Total SE will stop refining oil in the Paris region and will invest more than 500 million euros by 2024, replacing its facility with renewable fuels and bioplastics, Bloomberg reports.
The oil giant’s decision reflects growing demand for greener energy, as well as Total’s commitment to reduce its exposure to hydrocarbons and limit carbon dioxide emissions from its operations. The company, like its European competitors in the form of Royal Dutch Shell Plc and BP Plc, is under increasing pressure from shareholders, governments and the public to step up measures to tackle climate change.
Crude oil refining at the Grandpuits facility will stop in March and hydrocarbon storage will end at the end of 2023, a statement from Total said on Thursday. By 2024, the refinery will focus on the production of renewable diesel, mainly for aviation, on the recycling of plastics and the production of bioplastics, as well as on the operation of two solar power plants. Instead of Grandpuits, the company’s customers in the Paris region will be supplied with oil from Total’s refineries in Normandy and Donges.
“Total has demonstrated its commitment to the energy transition and reaffirmed its ambition to achieve carbon neutrality in Europe by 2050,” said Bernard Pinatel, President of Total Refining & Chemicals. According to him, Grandpuits represents 8% of the total refining capacity in France.
Refinery margins are under pressure due to the coronavirus pandemic, which limits demand for petroleum products as jet fuel. Conversely, Total’s biofuel plant in La Mede, in southern France, remained profitable during the crisis, CEO Patrick Puyane said in July.
The Grandpuits refinery has been facing pipeline problems in recent years. Replacing the refinery with a new one would cost almost 600m euros, which is unlikely to be worth it, as the government is already adopting policies in favor of renewable fuels and cleaner vehicles.
The new complex, which will be commissioned in 2024, will be able to produce 400,000 tonnes of biofuels per year, including 170,000 tonnes of sustainable aviation fuel, in line with France’s target of 5% renewable fuels of all available by 2030. The rest of the production will be renewable naphtha, used for the production of bioplastics and diesel.
This reflects a change in French consumption habits, with demand for traditional diesel in the Greater Paris area declining by 4% to 5% per year as engines become more efficient and people gradually switch to electric cars.
The new facility will process mainly animal fats from Europe and used cooking oil along with other vegetable oils such as rapeseed. The plant will not use palm oil, which environmental groups have spoken out against.
Total’s joint venture with Dutch chemical manufacturer Corbion NV will also build a new plant in the Grandpuits complex, which will use sugar instead of oil to produce plastics from 2024, following a similar venture in Thailand two years ago. The market for so-called PLA bioplastics, which can be used to make plastic films and rigid packaging, is growing by 15% a year, according to Total.
On the territory of the complex, the French company will cooperate with Plastic Energy to recycle plastic waste into a polymer raw material that can be used for food packaging. Two solar parks with a total capacity of 52 megawatts will be built on the sites in Grandpuits and Gargenville.