EU Seeks to Boost Oil Refining Capacity Amid Energy Shocks

European Commissioner for Energy and Housing Dan Jørgensen announced Wednesday that the European Commission is working to increase domestic oil refining capacity to mitigate energy shocks and price volatility. Jørgensen described current geopolitical instability in Ukraine and the Middle East as a "wake-up call," noting that a 10% decline in refining capacity over the last two decades has left the bloc vulnerable.

The Commission has launched talks with European refiners to explore boosting production at existing facilities, with technical assessments scheduled for early 2027. The initiative focuses on securing supplies of jet fuel and diesel, which are critical for defense, aviation, and agriculture. Jørgensen stated that ensuring flexible refining capacity is a matter of both security and economic competitiveness.

The strategy faces internal tension as the bloc balances these immediate needs with long-term decarbonization and climate goals. The governments of Poland, Czechia, and Slovakia have urged Brussels to develop a long-term strategy to protect refineries, arguing that crude oil supply alone does not guarantee the availability of refined products. The Commission is currently reviewing industry proposals to increase output while planning a transition toward e-fuels and biofuels.