Dear colleagues, professional public,
The year 2022 was characterized by great uncertainties that fundamentally changed the environment in which we carry on business. After the end of the pandemic and the initial optimism occurred the conflict, which fundamentally affected the supply and logistics chains. Despite these circumstances, thanks to the extraordinary efforts of our members, we managed to pass the whole year successfully. We continue to play a key role in the Slovak market, we are constantly developing our business and preparing for the changing market environment in accordance with emerging trends and the challenges ahead.
In these extraordinary times, our joint task is to ensure business continuity and continuously supply the region with energy, where the priority burden of responsibility is borne by the companies operating the refineries. Despite the regulatory environment, which includes sanctions and various extraordinary taxes and fees that we did not know before, the key task for us remains the safe supply of the entire region, under the condition of strict compliance with all the rules set either by the European Union or the Slovak Republic.
In Slovakia, the company SLOVNAFT, a.s. and its refinery reaches an exceptional position, which has sufficient pipeline capacity crucial for the diversification of oil sources through deliveries via the Adria pipeline, which opens at the port of Omišalj in the Adriatic Sea. It must be said that despite this unprecedented situation, it is in the interest of all member companies of our Association to fulfill their obligations in such a way that customers feel the consequences of this difficult situation as little as possible.
SAPPO, as an association bringing together the most important companies operating in the field of fuels and lubricants, undergoes changes and responds flexibly to a dynamic environment. Maybe you didn’t even notice, but the change also affected the very name of the Association. The Slovak Association of Petroleum Industry and Trade became the Slovak Association of Fuel Industry and Trade. It’s a change in just one word, but this change outlines where we’re aiming in the future, even though the traditional refining and petrochemical industries still play and will continue to play a key role in our business for some time to come. We continue to maintain and confirm our position as a reliable and professional partner for cooperation and intensive discussion with state and public administration bodies, international organizations, as well as for the wider professional public.
If I can briefly compare 2022 with 2021, the fact is that while in 2021 we faced reduced demand, on the contrary, in 2022 we faced shocks of a significant increase in demand for our products, especially in the first half of the year, when uncertainties related with the conflict in Ukraine led to panic buying, hand in hand with a sharp increase in fuel prices. This situation placed high demands on the optimization and flexibility of the supply-customer chains of member companies.
When solving operational problems, we do not forget the strategic goals, which are still relevant, even if you may have felt that they have receded a bit into the background. Since the EU presented its ambitious goal of becoming a world leader in solving the global challenge of climate change, we stand on the threshold of revolutionary changes, and not only in the fuel industry.
In 2022, consultations and discussions continued on the revisions of some European directives and regulations presented by the European Commission, like Fit for 55. SAPPO was part of the discussions and consultations on the Regular Preliminary Opinion of the Slovak Republic on the draft regulation of the European Parliament and the Council on the introduction of infrastructure for alternative fuels and on the repeal of the European Parliament and the Council Directive 2014/94/EU; the revised draft regulation on ensuring equal conditions for sustainable air transport; the draft revision of Council Directive 2003/96/EC on the taxation of energy products and electricity. Regarding the proposal of the EP and Council regulation concerning the tightening of CO2 emission standards for new passenger cars and new light commercial vehicles, SAPPO joined the FuelsEurope initiative with the aim of recognizing the contribution of vehicles powered by low-carbon fuels even after 2035. Although at the end of the year, there was a preliminary inter-institutional agreement at the EU level, the discussion about the proposal and the role of carbon-neutral fuels continued even at the beginning of 2023. The near future of cars and trucks will also be fundamentally shaped by the form of EURO 7, which should apply in the event of an agreement at the EU level already in 2025 for the passenger vehicle category. SAPPO is of the opinion that on the way to emission-free transport, it should be a priority to support all available solutions that aim to reduce emissions in this segment. Evidence of this fact is the strategies in the field of transformation of the fuel industry of our member companies with the aim of gradually expanding the portfolio of offered fuels, including alternatives such as CNG, hydrogen, electricity, including synthetic fuels. Since the density and accessibility of the existing petrol station infrastructure is a great advantage.
At the same time, we paid increased attention to the preparation for the implementation of the obligation to monitor the movement of taxed petrol and diesel on the territory of the Slovak Republic, as well as between member states in the Excise Movement Control System (EMCS), which is effective from February 13, 2023. In this regard, consultations were held with the Ministry of Finance of the Slovak Republic and the Financial Directorate of the Slovak Republic.
Simultaneously with the preparation for the so-called extended EMCS, SAPPO members also dealt with the amendment to Act No. 309/2009 Coll. on the support of renewable energy sources, especially in connection with the provision of the obligation to monitor the movement of biofuels through the SK BIO database. During the preparatory phase, SAPPO member companies participated in database testing, and subsequently, several meetings took place with representatives of the SHMÚ with the aim of solving and eliminating problems from application practice during the full operation of IS SK-BIO. The main purpose of the newly created database is the monitoring of biofuel flows, electronification, and elimination of fraud in the production of so-called Proof of Sustainability (PoS).
Today, it is extremely important for us that the support mechanisms determining the process of transformation towards climate neutrality are set fairly for all sectors and technologies.
I am convinced that the development of a diversity of energies and energy carriers will provide the economy with flexibility, resilience, and the possibility to choose the optimal solution for each sector in order to contribute to the protection of the environment that belongs to us all.
In conclusion, I would like to thank all the members, sympathizers, co-workers, and especially the colleagues of the expert working groups, including the two-member team of the Association, for another professionally managed year and wish them a lot of optimism and strength for the next work in 2023.
Ľuboš Dinka
Chairman of the Executive Board
SAPPO