Slovak Association of Petroleum Industry and Trade (SAPPO) for almost quarter of a century independently and professionally contributes to building a sustainable business framework in this sector in Slovakia. During its existence, it has become – thanks to the expertise of its members – a reliable guarantor of the relevance, professionalism and transparency of the discussion for government authorities and public administration as well as for wider public. This cooperation goes even beyond the borders of Slovakia and the Association has become a reliable partner for professional discussions with various organizations at European level.
Over the past year, the Association actively participated in the commenting on a number of legislative proposals and suggestions and in the preparation of expert opinions. Allow me to mention at least the three most important topics faced currently by our sector that, due to their content, can be considered Europe-wide.
The first topic relates to the issue of renewable energy and related EU directive called RED (Renewable Energy Directive). The European Union requires that by 2020 at least a 10-percent proportion of energy used in land transport to be produced from renewable sources. Individual Member States have gradually transposed this requirement in the form of an obligation to provide biofuels with varying ratios of individual bio-components, while this approach differs from country to country. It should be kept in mind and noted, however, that this difference in approach to transposition of EU directives into local legislation may ultimately lead to a “distortion” of competitiveness between various markets.
The second topic is the issue of fuel quality, coved in the so-called FQD (Fuel Quality Directive). Through the directive, EU obliges suppliers who introduce their products to free tax circulation to reduce carbon emissions from fuels by 6% by 2020 relative to the reference CO2 level values from 2010. Individual Member States have gradually transposed also this target in different measures, and some countries have even adopted preliminary targets to meet.
The third topic is the establishment of a national policy framework for the development of the market with alternative fuels. Electricity, hydrogen, LPG and CNG serve at least partially as a replacement for fossil fuels in the supply of energy for transport and contribute to the elimination of carbon emissions in the sector. During 2016, the Ministry of Economy of the Slovak Republic established a working group dealing with this topic, to which SAPPO has been also invited. In the discussion, we have presented a number of expert opinions and suggestions. The outcome of the working group was a “Comprehensive strategy of introducing alternative fuels in the Slovak Republic and its impact on the national economy in terms of potential opportunities and needs of the Slovak Republic”.
Let me emphasise that the Slovak Association of Petroleum Industry and Trade is fully aware of the importance of these critical topics for environmental protection as well as for the sustainability of business in this sector. Individual SAPPO members are exerting a lot of effort and taking many measures to achieve these objectives. At the same time, based on years of experience we realise also the practical challenges that arise from these measures. We see, for example, some realistic technical limits that are caused, for example, by the unavailability of the second- and third-generation bio-components on the market. Yet, their availability is a necessary prerequisite for achieving the prescribed reduction in greenhouse gas emissions by 6% by 2020. We have also brought to the attention the need for taking into account the entire life cycle of production of some of the proposed alternatives, such as electricity, for their introduction into alternative fuels infrastructure.
To address these challenges, our experts are constantly working at regular meetings of individual working groups within the Slovak Association of Petroleum Industry and Trade. On the one hand, they seek to fulfil the defined objectives, and on the other hand they must face some real-life limiting factors of the market that hinder their fulfilment. While working on meeting these objectives, we must not forget the need to maintain the competitiveness of our members in the European market.
Dear friends, examples that we have just mentioned represent only a small portion of the work done by our colleagues within SAPPO during the last year in commenting on a number of legislative proposals and participating in the preparation of expert opinions. I would like to express my deep and sincerely appreciation for this work and for other active engagement of all members of the Slovak Association of Petroleum Industry and Trade.
And finally, I would also like to thank the representatives of government authorities and public administration and various organizations who give us space for professional and substantive discussion on current topics. We believe that we all work towards a common objective, which is the adoption of such legislative changes and measures that will take into account our common goals of improving the environmental dimension as well as the sustainability of this sector, while not ignoring, and fully respecting, the real current limits of the market.
Dear friends, this year will certainly not be easier. Therefore, I wish all of us a lot of energy and strength in this effort to successfully face the many challenges ahead.