Facing wave of closures, oil refiners turn to biofuels

European and U.S. oil refineries face a wave of closures due to plateauing fuel demand, tightening environmental rules and overseas competition, prompting some owners to opt for an easier alternative – converting plants to produce biofuels.

The shock of the coronavirus epidemic crushed global oil demand and as some producers, including BP, say it might never recover to pre-crisis levels, the need to close refineries has accelerated.

The International Energy Agency (IEA) said in a recent report that by 2030 around 14% of current refining capacity in advanced economies “faces the risk of lower utilisation or closure.”

That share could grow to 50% in 2040 under a more aggressive transition away from fossil fuels to electric vehicles, the IEA said.