COVID 19 presents some unusual issues that need both national and EU level solutions. The Federation of European Tank Storage Associations (FETSA) has been working in Brussels and with its national associations in national capitals to ensure legislation is amended to take these into account.
Coronavirus impact on the winter/summer gasoline transition
FETSA has had major concerns with the planned changeover from winter to summer grade gasoline in light of significantly falling fuel demand due to COVID 19 movement/transport restrictions.
This has had the impact that there are substantial excess levels of winter grade fuels that need to be sold by, or in, May (precise date can vary per Member State). Under normal circumstances, vapour pressures would now start to be changed in order to ensure that fuel can be blended into a summer grade fuel.
Under the current circumstances of full capacity of winter grade fuel and a crash in demand, storage terminals have experienced a lack of physical or technical means (due to a lack of ullage) to import new fuel products in order to blend the winter fuel grade into a summer grade.
This had the potential consequence that storage terminals across the EU currently will struggle to be able to supply the fuel supply chain, notably petrol stations with summer grade fuel unless EU legislation on fuel quality changes temporarily.
Because of the crash in winter fuel usage, even if ‘lockdowns’ were to end soon, there would still be insufficient capacity to stock or blend summer fuels in the coming months. Without legislative action, this would shut down fuel distribution across the EU until winter fuel can be used again.
To ensure fuel supply chains continue to function, FETSA requested that the European Commission grants a temporary derogation from the need to supply summer grade fuel, lasting for at least two months. This may be required to be extended further depending upon the future situation.
This means creating a two month, renewable derogation from the obligation to supply summer fuel grades contained in the Fuel Quality Directive. This issue is a result of an over 70% reduction of fuel consumption due to a completely unforeseeable ‘pandemic’ event leading to unprecedented government enforced ‘lockdowns’.
The European Commission agreed with FETSA’a proposal and has said that temporarily, the winter/summer fuel changeover can be delayed by Member States. This has given the supply chains the flexibility they need to adapt to reduce winter fuel stocks in a commercially sensible way.
This lobby success shows the value that can be achieved when companies, national and European trade associations in our sector work closely together to achieve concrete and commercially relevant objectives.
For more information: This article is written by Ravi Bhatiani, Executive Director of FETSA, the Federation of Tank Storage Associations. FETSA represents the bulk liquid storage sector in Europe. Bulk liquid and liquified gas terminals are present in ports, airports, logistic platforms and along rivers, canals and pipelines. In total FETSA represents over 140 companies operating 692 terminals across Europe.
Find out more at: www.fetsa.eu