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environmental impact assessment is also required for commercial oil production if the extracted amount exceeds 500 tonnes of oil per day.

The standard mining royalties are set at 10% of the average attainable market value. For some Länder, extraction levies are still an important source of revenue; in 2017, E&P companies paid a total of EUR 250 million as royalties.

The companies involved in the production of oil and natural gas are organised in the economic association Erdölund Erdgasgewinnung e.V. (BMWi, 2019). Currently, only a few companies are active in Germany’s oil E&P sector. There has been little change to the major players over the last five years with Wintershall Holding GmbH, DEA Deutsche Erdoel AG, Engie E&P Deutschland GmbH, and BEB Erdgas und Erdöl GmbH & Co. KG still being the most dominant ones.

Downstream

Compared with the upstream sector, Germany’s refining sector is more dynamic, with various global oil companies holding German refining capacity. The public sector does not own any shares in refineries, and there is no specific government regulation for the refining sector, other than applicable environmental regulations.

At the end of 2017, Germany had 13 refineries with a total annual processing capacity of 103 million tonnes (Mt) (see refinery section below for details). Shell Deutschland Oil is the largest refining operator with a 25% share of total refining capacity, followed by BP Europa SE (18%), Rosneft Deutschland GmbH (12%), Total SA (11.7%) and Holborn Investment Company (5%); the remaining eight companies hold shares lower than 5%.

There have been some ownership changes in recent years. In 2014, the Elbe Mineralolwerke Refinery Center in Hamburg-Harburg (2.85 Mt) closed down. In addition, Rosneft and BP ended their joint venture in the Ruhr Oel refinery on 1 January 2017, leaving BP as its sole owner. In early 2016, the Swedish company Nynas AB took over Shell’s refinery in Hamburg-Harburg, and has since controlled 2.1% of Germany’s total refining capacity. The administration does not expect the consolidation within the refining sector to affect Germany’s security of supply.

Retail

In the retail fuel sector, there were around 14 093 roadside filling stations and 360 filling stations on the autobahns as of July 2019. The number of filling stations has decreased slightly from 14 209 stations in 2014. The major players in Germany’s oil retail sector are Shell, with a market share of 21%, and Aral, with 20%, followed by JET (Phillips66) (10.5%), Total (9.5%) and Esso (7.0%).

In 2011, the Federal Antitrust Authority (Bundeskartellamt) reviewed and confirmed an oligopolistic market structure consisting of the five largest retailers in Germany’s fuel retail sector, resulting in a uniform process at service stations. To prevent further concentration of the market, the federal government created a special unit to monitor and publicise fuel price information to consumers in 2013 (see oil market and policies section below).

Prices and taxation

There is no fuel price regulation in Germany aside from the competition oversight of the Bundeskartellamt. Fuel prices in Germany are close to the median among IEA member countries for diesel and gasoline, but among the lowest for fuel oil, mainly due to low tax rates (Figure 10.8).

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The federal government in 2013 created a Market Transparency Unit for Fuels (MTU Fuels) under the Bundeskartellamt. By collecting and providing fuel price information to consumers, the MTU enhanced the transparency of fuel prices as well as market competition.

Taxation

Along with other fossil fuels, oil is subject to energy taxation in Germany. The Energy Tax Act 2006 and the Energy Tax Implementation Ordinance 2006 in their current forms are the legal basis for domestic taxes; at the European Union (EU) level, energy taxation is guided by Council Directive 2003/96/EC. The energy tax is limited to energy products used as vehicle or heating fuels; non-energy related uses such as chemical feedstocks are exempt. To account for broad environmental and economic considerations, the Energy Tax Act allows for tax concessions, which are applied to fuels used in agriculture and forestry, local public transport, aviation, shipping, and manufacturing. For 2018, the government estimates that the total amount of fuel tax concessions was around EUR 4.4 billion.

Transport fuels

As in other European countries, oil products for transport are heavily taxed. In 2018, unleaded gasoline had a tax rate of EUR 65.45 cents per litre (c/L), and diesel EUR 47.04 c/L. Such a tax differential between gasoline and diesel is relatively high in the European context at present; many countries have narrowed the differential rate between the two fuels to account for local diesel-related air pollution (some European countries now even tax diesel at a higher rate than gasoline). LPG and natural gas used as motor fuels benefit from lower tax rates, which are scheduled to be phased out by 2022 for LPG and 2026 for natural gas.

There is tax relief of EUR 5.4/L for local public transport, covering rail and road, applied evenly for both gasoline and diesel. The total amount of subsidies for local public transport is estimated to be EUR 72 million. Fuels used for aviation and shipping (on internal waterways) are exempt from taxation if they are for commercial provisions of services.

The German government also provides subsidies for the purchase of low-emission vehicles as well as the deployment of electric vehicle (EV) charging infrastructure and hydrogen filling stations (see section on oil in the low-carbon transition below).

Heating fuels

A special tax rate is applied for residential heating fuels in Germany. In 2018, the tax rate for heating oil was EUR 6.135 c/L, and for heavy fuel oil only EUR 2.5 c/L, allowing for very low heating fuel prices. As such, current levels of taxation do not support a transition towards low-carbon fuels, especially renewables, in the heating sector.

Oil market and policies

Germany takes a market-driven approach to its oil market and oil pricing, with the regulatory framework mainly centred on preventing anti-competitive behaviour. Currently, there is no intention to introduce additional market regulation beyond the competition oversight of the Bundeskartellamt.

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transport fuels, starting at EUR 10/tonne in 2021 and increasing by EUR 5 annually to EUR 35 in 2025. From 2026, the carbon price would transition to an emissions trading system without a fixed price.

Biofuels

Germany also encourages the consumption of biofuels as a way to displace oil in the transport sector. The government’s objectives are directed by EU policy as defined under the Renewable Energy Directive, which requires all member states to meet a target of 10% in the transport sector by 2020. In addition, the EU Fuel Quality Directive requires member states to cut GHG emissions from fuels by at least 6% by 2020, which also motivates the increased use of biofuels.

On the domestic front, the German government established biofuels quotas as part of the Federal Immission Control Act (BImSchG) in 2009. The act required oil companies in 2015-16 to reduce GHG emissions by 3.5% relative to the total amount of fuel they supplied to the market, mainly through increased used of biofuels or electricity. In 2017-19, they are required to reduce emissions by 4%, and from 2020, by 6% (BMWi, 2019). In order to credit biofuels under this policy, each category of biofuels must be assigned a GHG reduction value as well as a sustainability certificate.

Furthermore, the government implemented a Biofuel Sustainability Regulation (BiokraftNachV) to ensure the environmental soundness of biofuels production. The regulation classifies biofuels as sustainable if they achieve a 50% reduction in GHGs compared with fossil fuels (since October 2015). Production of sustainable biofuels must also avoid areas of high biodiversity or rich carbon sinks. Meanwhile, EU regulations since 2017 require that biofuels production avoid indirect land-use changes, limiting the role of conventional biofuels from crops to 7% of the European Union’s 10% target. The remaining 3% is supposed to be met with cellulosic and other advanced biofuels, as well as electricity.

Public transport

The German government is also keen to promote the uptake of intermodal transport systems through additional funding, including in collaboration with private-sector infrastructure. Germany’s historical competitive edge in automobiles has not motivated sizeable investments and consumer uptake of public transportation. Even long-distance rail is often more expensive and less convenient compared with driving for the average person. To help address this gap, in 2018, the government published a new funding guideline for EUR 500 million until 2023 to promote energy efficiency measures in the rail transport sector. The climate cabinet’s 2030 action plan also calls for greater incentives to promote public transportation and the use of trains over airplanes.

Heating

The use of heating oil in buildings has decreased significantly over the past decade thanks to various initiatives, ranging from stricter building codes to the promotion of renewable energies via the Market Incentive Programme (see Chapter 3 on climate change). In newly built buildings, the share of oil heating systems has decreased from over 10% in 2004 to only 0.7% in 2016. Germany expects to further reduce the use of heating oil in the entire buildings sector through existing measures. Moreover, the climate cabinet recommended that the government impose a ban on oil-based heating in buildings from 2026.

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well as for transporting petrochemical components or refinery feedstocks. This became especially salient in the autumn of 2015 and once again in October 2018, when an unusually dry season led to very low water levels on the river over an extended period, which caused significant supply problems closely monitored by the administration. River transportation could not easily be replaced by other means in such situations due to capacity limitations on road and rail, given alternative uses; in addition, administrative obstacles, such as different permit conditions for train drivers in different federal Länder, posed impediments. The public German stockholding corporation, Erdölbevorratungsverband (EBV) also stores some of its emergency stocks along the Rhine, which in a low-water level situation would need to be transported by other means of transport than barges.

Refineries

Germany has one of the largest refining capacities in Europe. German companies determine how to source their oil supply in line with global oil market trends, with refineries optimised for certain crudes or blends of crudes. The two refineries located in Eastern Germany are mainly oriented towards processing Russian crude.

Germany has 13 refineries located throughout the country with total capacity of 103.02 Mt per year (2 mb per day) at the end of 2017.

Table 10.1 German oil refineries, 2018

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In 2018, Germany’s refinery gross outputs averaged 2.06 mb per day. Gas/diesel oil accounted for 40% – the largest share of total outputs – followed by gasoline with 23% (Figure 10.10). However, as the demands for both gas/diesel oil and gasoline are greater than the domestic outputs, Germany relies on imports.

Figure 10.10 Germany’s oil refinery outputs composition, 2018

Note: Includes refinery fuels and excludes refinery losses.

Source: IEA (2019b), Oil Information 2019, www.iea.org/statistics/.

Storage

The EBV is responsible for holding compulsory stocks according to the Oil Stockholding Act. As of the end of 2015, Germany had a total oil storage capacity of 62 million cubic metres (mcm), of which over 40% were in caverns (BMWi, 2019). Oil products are mainly stored in above-ground tanks, while most crude oil is stored in underground caverns (EBV, 2019a). Around one-third of above-ground facilities are operated by companies that are independent from refineries (BMWi, 2019). The above-ground storage facilities are fairly distributed across the country, whereas the caverns are primarily located in northern Germany (see oil emergency preparedness and organisation in the section below for more details on emergency oil reserves).

Storage capacity development is reviewed by the administration regularly in co-operation with the EBV and the Länder; the EBV holds annual tenders for new capacity and compensates for deficiencies in regional stocks such as in Bavaria. The total capacity of Germany’s oil storage has decreased since the last in-depth review (IDR) in 2013, and is expected to continue to gradually decline. In 2016, three new caverns in Wilhelmshaven with a total capacity of 3 mcm were being constructed by EBV; they are planned to be completed by 2021.

Oil emergency policies and organisation

National Emergency Strategy Organisation

The German National Emergency Strategy Organisation (NESO) has a voluntary joint structure that forms a close co-operation among the federal government, the public stockholding corporation EBV and industry to facilitate a systematic crisis management. The key players include the Federal Ministry for Economic Affairs and Energy (BMWi), the

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