Tomislav Mićović, Representative Of The National Petroleum Committee Of Serbia - World Petroleum Council (NNKS-WPC); Secretary General Of The Association Of Oil Companies Of Serbia (UNKS)

If every percentage of economic growth implies at least the same percentage of growth in the use of natural resources, there are no existing sources of energy and mineral resources that won’t have negative consequences for life on Earth. That’s why striving for rational, sustainable growth is the most important factor

Despite the Green Agenda for the Western Balkans undoubtedly being high on the list of priorities for both the European Union and the Western Balkans, the complexity of the issues needing to be resolved – at both the level of the EU and that of each individual country of the region – is such that it doubtless requires deep reconsideration. We discussed these specific topics with Tomislav Mićović, representative of the National Petroleum Committee of Serbia – World Petroleum Council (NNKS-WPC).

You spoke at the recent SET 2023 conference, at which it was concluded that the region still lacks an alternative to gas and coal. From the perspective of the National Petroleum Committee of Serbia, what are the most important issues being launched under the scope of the implementation of the Green Agenda for the Western Balkans?

The Green Agenda is based on the unique goals of the European Green Deal, but that naturally cannot be applied universally for every country or region. The countries of the Western Balkans also have to individually find their own way to achieving these goals, but there are some things that we have in common. I would single out the irrational consumption of energy and the large extent to which coal is represented in the structure of primary energy sources. It could be said that energy efficiency in housing construction, unfortunately, but also fortunately, isn’t at an enviable level. That’s unfortunate because energy is wasted in the vast majority of business properties, public buildings and residences, due to the poor insulation qualities of façades and windows and exterior doors, while it’s fortunate because relatively small investments are required to achieve significant progress in terms of reducing the need for energy to power heating and air conditioning. All the countries of our region, including EU member states, are already working intensively to increase the number of energy interconnections and primarily to modernise electric power systems, in order for the increasing amount of energy produced from renewable sources to be used even more rationally.

Here I will return to the issue of alternative energy, as a universal issue. The world isn’t seeking an alternative to resources that satisfy current consumption, but rather an alternative that will satisfy the permanent appetite for growth of the economy and society as a whole. I personally think the key is in designing rational, sustainable growth. If every percentage of economic growth implies at least the same percentage of growth in the use of natural resources, there are no existing sources of energy and mineral resources that won’t have negative consequences for life on Earth. There has long been debate on the extent to which existing ways of transporting goods and passengers, tourism, but also the fashion industry, are generators of the irrational consumption of energy, while in reality very little has been done to change that. The COVID-19 pandemic allowed the whole world to better observe, for instance, the shortcomings of existing lifestyles and to realise just how fragile today’s civilisation is. Unfortunately, once the immediate threat of infection abated, the world returned to its old habits fully, without having learnt any lessons when it comes to the use of resources.

The COVID-19 pandemic allowed the whole world to better observe, for instance, the shortcomings of existing lifestyles and to realise just how fragile today’s civilisation is. Unfortunately, once the immediate threat of infection abated, the world returned to its old habits fully, without having learnt any lessons when it comes to the use of resources

Energy transition, which intensified following the decision of the EU to become the first climate-neutral continent, is in itself a form of disruption, which became significantly stronger in 2022, in a clash with the energy market disruption resulting from the war in Ukraine. It will be noted as a peculiarity of our time that coal-fired power plants have been reignited, so to speak, as an alternative energy source. This all indicates that the goals and deadlines of the Green Agenda will have to be updated much more often than was initially planned.

You don’t believe it will be possible to develop the economy without petroleum for a long time to come. What is the range of energy transition in the scope of such limitations? To what extent does it make sense to encourage shifting to electric vehicles in this context?

Around 95% of energy used in transport worldwide is derived from petroleum. Conversion has been accepted at the global level and is possible, but that nonetheless isn’t merely a matter of replacing vehicles powered by petroleum derivatives with electric vehicles. Firstly, the very organisation of transport should be made more energy efficient, thereby reduce the need for energy. We should take into consideration the fact that there are not yet sufficiently developed technological solutions for heavy goods vehicles, construction machinery, agricultural and other plant machinery, ships, planes and even military vehicles, none of which will be powered by internal combustion engines. It is then necessary to provide enough green electricity for all electric vehicles, as well as an almost completely new transport and distribution network, because this relates to huge amounts of energy that existing systems wouldn’t be able to ultimately transfer to the consumer.

As such, implementing energy transition also implies – alongside the amending of energy policies – the amending of policies related to transport, taxation, environmental protection and many other areas.

What, in your opinion, are the new technological solutions for the future; and how – in that context – do you see the sustainability of demand for lithium-ion batteries that we would also like to produce?

When it comes to transport, I’m convinced that today, at the end of the first quarter of the 21st century, civilisation has not yet identified a solution for the long-term that’s acceptable in a technological, ecological and energy sense. The last hundred years have been years of development, or rather of the constant technological and ecological advancement of engines and means of transport based on petroleum derivatives.

The process of replacing steam engines and horse-drawn carriages with internal combustion engines lasted for a good part of the 20th century. The upcoming conversion won’t take as long, but the first steps, based on batteries, don’t prompt optimism. Regardless of whether it’s lithium-ion, sodium-ion, or batteries based on some other galvanic cell coupling, the prevailing determination to such a solution only leads down a blind alley. More precisely, batteries, and developing systems to charge them, will have their niche, but they are far from being able to represent a universal solution for all forms of transport and all purposes.

How well adapted was Serbia’s energy policy to handle the challenges that emerged at the global level over the last two years?

That is a combination of challenges that no one had previously faced. There were disruptions before, but this time the situation was further complicated by the mere fact that a second crisis emerged before the previous one had been overcome. Shortcomings that we could no longer brush under the carpet bubbled to the surface. Given the circumstances, we can say that the measures implemented by the state with the aim of mitigating the impact of the energy crisis on the economy and society achieved their objective, because the security of supplies increased and there were no interruptions in supplies of any type of energy. Still, we will now need some time to see the cost of those measures. The petroleum sector, in cooperation with the state, provided a significant contribution to securing the supplying of the Serbian market. Considering that around 80% of the petroleum derivatives consumed in Serbia are obtained from the processing of imported petroleum or are directly imported from refineries in the neighbourhood, Serbia is highly import dependent.

Around 95% of energy used in transport worldwide is derived from petroleum. Conversion has been accepted at the global level and is possible, but that nonetheless isn’t merely a matter of replacing vehicles powered by petroleum derivatives with electric vehicles

The real challenge under the new circumstances was thus to secure enough petroleum and petroleum derivatives, but also to deliver them to Serbia. All these challenges were overcome successfully, so all consumer needs were satisfied fully. However, the effects of the measures didn’t have the same consequences for all segments of the petroleum sector. As a temporary measure, the Regulation on limiting the price of petroleum derivatives achieved the desired effect in the first few months and that measure was utilised by many countries. However, it has been in effect in Serbia for more than a year and, together with the Decision to ban exports that was recently lifted, hindered the operations of part of the market for a good part of 2022 and at the beginning of 2023, and some retail segments won’t recover.

Considering that there are a large number of vehicles in our country that don’t satisfy international environmental standards, how does this impact on the range of fuels offered and the quality of the fuel that’s used in Serbia?

The motor fuels that can be found on the Serbian market today comply fully with the prescribed quality of fuel in the European Union. It was ten years ago that Serbia caught up on the applying of valid European standards, when D2 diesel was withdrawn from sale fully. A few years after that, diesel fuel gasoil 0.1, containing a slightly higher percentage of sulphur, was sold as a purpose made fuel for agricultural machinery, but it also hasn’t been available at our filling stations for years.

The quality of fuel is defined by standards and national regulations and isn’t dependent on the structure of the vehicle stock. Regulations governing vehicle exhaust emissions in Europe began being applied in 1993, and each subsequent narrowing of the criteria demanded huge investments in both the automobile and petroleum industries. The offer of Serbia’s petroleum sector doesn’t lag behind that of the EU market, either in terms of product range or fuel quality.