Preem Drops Out Of Controversial Expansion Plan

Vivian Haas
International Business Writer

In 2016, a large oil company, Preem, applied for a permit in order to expand their Lysekil refinery on the west coast of Sweden. The expansion would have allowed Preem to build a facility to refine heavy fuel oil into gasoline and diesel, which would expand their production of renewable fuel while phasing out raw materials. However, critics are concerned that while the facility is focused on cleaner fuel, the refinery will cause an increase of carbon dioxide emissions. As a result, environmentalists protested the expansion of the company and brought out a lawsuit that lasted up until 2018.

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Despite the protests, Preem was officially granted the permit in June 2020 by the Swedish Land and Environment Court of Appeal, and they planned to continue on with their expansions into the West Coast. Even though Preem assured that adding local emissions would be a minor inconvenience compared to the sourcing of renewable and higher quality fuels, climate activists were still angered by the expected increase of carbon dioxide. Greenpeace, an organization focused on environmental protection, argued that the new refinery could produce about a million tons of carbon dioxide a year, which goes against the Paris Climate Agreement.

To protest the expansion even further, Greenpeace blocked access to the refinery by anchoring its ship in the fjord outside the refinery, starting on September 10th. This essentially blocked tankers from coming in or out of the refinery for three days to protest the expansion. On September 28th, Preem officially decided to withdraw all applications for the $176 million expansion of its refinery. Preem said that due to the Covid-19 crisis, and the economic downfall it caused, the investment would be economically illogical.


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