We produce and sell products - including petrol, diesel, heating oil and jet fuel - from our refineries at Mongstad and Kalundborg. We also sell quite large volumes of LPG (propane and butane) from our refineries and gas processing plant at Kårstø. We follow increasingly strict environmentally inspired specifications for these products, while pursuing energy-efficiency gains on the production side.

The challenges

For petrol and diesel, the EU is in the process of introducing a revised Fuel Quality Directive. This includes a mandated biofuels programme that will triple the biofuels content of these fuels to 10% by 2020. Biofuels generally release only 50-70% of the carbon dioxide emissions of fossil fuels. For Statoil, the challenge will be to build a logistics system that ensures the correct biofuels content in the petrol and diesel we sell. We must also be able to verify that the biofuels we use meet the sustainability criteria set out in the Fuel Quality Directive and the Renewables Directive.

There is presently global oversupply of LPG. This largely stems from a large-scale environmental initiative. In recent years, Middle Eastern countries have built plants to capture and sell the LPG associated with their gas production, instead of just flaring it. The practical challenge for Statoil lies in finding sufficient households to consume our North Sea volumes of LPG. The environmental incentive is that LPG emits 17% less carbon dioxide than heating oil per unit of heat.

What are we doing?

Statoil supports the introduction of a biofuels programme through the EU's Fuel Quality Directive. We will build the necessary tanks and shipment facilities at our refineries for the supply and blending of biofuels. We will consequently develop expertise in the area of work required for verifying sustainability criteria for the biofuels we purchase. We own a plant at Mestilla, Lithuania that produces FAME, a first-generation biofuel. We are conducting research on the next generation of biofuels - including algae.

We see LPG as an advantageous fuel for developing countries. It is sold in affordable, practically sized steel bottles and requires no costly connection to a grid. It is also energy efficient with no toxic emissions, and it helps to cut down on the use of wood for fuel, thereby slowing deforestation. Statoil supplies retail companies in the Mediterranean, North Asia, South America, and Europe. Some countries, such as the Netherlands and Poland, encourage the use of LPG in motor vehicles through promotional programmes.

What we have achieved

Statoil already sells products with a biofuel content of up to 7%, and we have gained important experience of the performance of biofuels under arctic conditions. Statoil is already the largest trader of LPG in Europe, selling some four million tonnes in 2010. At Mongstad, a new combined heat and power plant cuts down flaring and improves energy efficiency, while serving as a test bed for carbon capture and storage technology.