GERMANY HAS THE REPUTATION OF BEING the California of the European Economic Community when it comes to the introduction and enforcement of tough air and water protection regulations for refiners.
A result is that all German refineries have to meet more stringent standards than practically all of their counterparts in the EEC, particularly those in southern Europe.
The EEC has mandated certain environmental regulations covering all refiners in the community, but individual member countries are free to maintain existing or add stiffer national regulations. Germany has done just that and monitors and enforces them more aggressively than most others in the community.
A result of tougher regulations and enforcement is that refining costs are higher for German refiners, and they suffer an economic disadvantage when competing with their EEC neighbors in a somewhat "uncommon" market.
The flip side of this is that their environmental performance is noteworthy. SO2 emissions in Germany from refineries and oil products have been cut from a high of nearly 2 million tons/year in the mid-1970s to about 350,000 tons this year, according to Mineraoelwirtschaftsverband (MWV), the German oil industry's trade association.
Industrial noise, which gets scant attention in most industrial countries as an environmental menace, gets high-priority treatment in Germany. It is not unusual to be able to walk through an operating refinery of petrochemical plant there and carry on a conversation at a normal voice level.
There are no recent studies to show the economic disadvantage German refiners are suffering. However, in the late 1980s Chem Systems International estimated in a major study that by 1993 German refineries would be spending nearly 2 to 5 times more per metric ton of capacity to comply with their environmental regulations than other EEC refiners. A major portion of the German expenditures goes to make environmentally acceptable fuels, but directionally the amounts spent for air quality control at the refinery still exceed greatly that of most other countries, according to the study. The difference between Germany and Spain, which can easily penetrate the German market, is particularly large.
To get new figures the German Ministry of Economics is in the process of selecting a company, either Arthur D. Little or Chem Systems, to make another major comparative study. German refiners have little doubt that the results which may be out in early 1995 will show they are still operating at a major economic disadvantage.
In the meantime, the pressure continues. German management warns that, unless the rest of the EEC gets tougher with its refiners, the economic viability of some German refiners will be in question.
Peter Duncan, chairman of Deutsche Shell AG, said, according to the German newsletter Erdoel Informationsdienst (EID), on the occasion of startup last fall of a new $17 million water treatment unit at Shell's Hamburg-Harburg refinery, that, as far as Shell knows, no other European country is considering limiting ammoniacal nitrogen in refinery water effluent.
He said experts expect it will be the year 2010 before a limit 30 times higher than that required in Shell's effluent (2 mg/kg) to the Elbe River is accepted throughout Europe. The water treatment unit cost some $17 million, with the German Ministry of the Environment providing $3.6 million.
Duncan said if environmental protection demands in Europe aren't harmonized, the Hamburg refinery won't be economically viable in the long term.
In February, EID also reported that Wintershall AG, subsidiary of world chemical giant BASF, told employees at its Lingen refinery, also in North Germany, that major investments would have to be made there to meet stringent environmental regulations. In light of unsatisfactory refining economics, the company said it would have to look at several possibilities to lower costs, including a reduction in personnel.
The investment support by the environmental ministry and the states (Lander) to help construct environmental facilities could dwindle as the cost of German reunification grows and as the environmental cleanup in the impoverished East, which was devastated by years of communist environmental corner cutting and mismanagement, proceeds.
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