Polluting Haifa oil refineries must close by 2025, PM’s economic adviser demands

In landmark move, National Economic Council and Environmental Protection Ministry recommend shutdown of Bazan facilities, to be replaced with green residential and commercial hub

Sue Surkes is The Times of Israel's environment reporter.

View of the oil refineries in Haifa Bay, May 5, 2017.  (Yaniv Nadav/Flash90)
View of the oil refineries in Haifa Bay, May 5, 2017. (Yaniv Nadav/Flash90)

In a watershed move for residents of northern Israel, the head of the National Economic Council, which advises the prime minister, announced Monday that the Bazan oil refineries that have long polluted the coastal city of Haifa, and largely defined its skyline, must be shut down within five years and replaced with a modern, green high-tech and residential hub.

Backing NEC head Avi Simhon at a meeting of the Knesset Internal Affairs and Environment Committee was Environmental Protection Minister Gila Gamliel, who attended the meeting to say that she intends to bring for cabinet decision, in the coming months, a date for the closure of Bazan Group Oil Refineries Ltd.

Bazan — one of whose iconic former cooling towers collapsed earlier this month — occupies 526 acres (2,130 dunams) in Haifa Bay, close to the most heavily populated areas of northern Israel. Its refinery imports crude oil to make a range of refined products for industry, transport and agriculture, 40 percent of which are then exported. Subsidiaries make products ranging from bitumen for road surfaces to waxes, oils, lubricants and polymers.

Faced with significant air pollution and above-average incidences of cancer and respiratory disease, Haifa residents and environmental activists have been campaigning for years to to shut the complex down.

View of the former cooling towers at the Bazan Group oil refinery complex on June 12, 2020, hours after one of them collapsed. (Meir Vaknin/Flash90)

Israel Chemicals Limited, the Ofer family holding company that owns Bazan, said after the committee meeting that it had no immediate comment.

The country’s second, smaller oil refinery is located in the southern coastal city of Ashdod.

Gamliel told the committee that her first meeting as minister with Prime Minister Benjamin Netanyahu was on the subject of pollution and Haifa Bay and that the project dovetailed well with her ministry’s main agenda — weaning Israel off fossil fuels.

It would take time to address multiple issues, such as alternative employment for the roughly 4,900 Bazan workers and storage for the refined products that would be imported after Bazan closed, she said.

What is currently needed is to end the uncertainty, she said, adding: “The longer we wait, the more environmental damage there will be and the harder it will be to rehabilitate the [polluted] land.”

In the meantime, she vowed, enforcement of environmental rules at the factories would be stepped up.

Avi Simhon, chairman of the National Economic Council, attends a conference of the Israeli newspaper “Makor Rishon” in Jerusalem, December 8, 2019. (Yonatan Sindel/Flash90)

Simhon, the national economic adviser, set up an interministerial committee three years ago to review the future of the Bazan factories, and employed the international management consultancy McKinsey, whose report on various options was finally released to the public earlier this month, but with large chunks redacted.

On Monday, Simhon revealed that committee members had disagreed about the report, but said, “I concluded that we can and must close the Bazan factories by the end of 2025.” He said that it was clear both that producing refined products in Israel was not worth the costs to the environment and the development of the Haifa area, and that moving the plants to unpopulated areas of southern Israel was economically unviable.

Quoting figures from the McKinsey report, he stressed that the removal of Bazan, the cleanup of the land (estimated to cost NIS 1 to 1.5 billion) and the construction of a modern residential and commercial hub — dubbed Bay of Innovation — could be financed without government help via Israel Land Authority sales of the land, valued at some NIS 13.5 billion, “and there would still be a few billions left over.”

Rafi Elmaliach, the head of planning at the ILA, which, according to Simhon, owns some 20,000 dunams (nearly 5,000 acres) of land in the area, said he was thrilled to present plans for the post-Bazan-era Haifa Bay to the Knesset for the first time.

Plans for a new Bay of Innovation in the northern city of Haifa, after the removal of the polluting oil refinery industry, include many water features and green areas, June 29 2020. (Screenshot, Knesset Internal Affairs and Environment Committee)

Citing examples in London such as the Queen Elizabeth Olympic Park and St Katharine Docks, both transformed from rundown industrial areas, Elmaliach’s team members presented plans that include making a feature out of the mostly concealed Kishon River, which flows into the Mediterranean Sea in Haifa Bay, and providing ponds and lakes for the enjoyment of residents, while also guarding against increased threats of flooding as the climate warms.

Plans call for leveraging the presence of the city’s Technion – Israel Institute of Technology to attract clean tech and biotech, and for boosting tourism. Just 92 kilometers (57 miles) north of Tel Aviv, Haifa — served by a port, airport, train connections and highways — is the gateway to the popular Galilee region. It is Israel’s third largest city.

Some 40 percent of the area vacated by Bazan and earmarked for building will eventually comprise 100,000 residential units with the remaining 60% housing industry and commerce.

According to an ILA timetable, planning, which started in 2018, will finish in 2025; the ten-year cleanup of land and groundwater will start in 2023; and marketing of 1,500 to 2,500 residential units annually will start in 2026.

Opposing calls to close it down, Bazan is asking the National Planning Council to approve its own plans to expand its complex and build a gas-fired power station on the property.

Eli Dukorsky, mayor of Kiryat Bialik, one of the so-called Krayot suburbs to the north of Haifa, told the committee that the council should “stop all new requests from Bazan, then they’ll understand that the train has left the station.”

View of Haifa Bay’s industrial area, May 5, 2017. (Yaniv Nadav/Flash90)

The only dissenting voice at the meeting came from Eli Abramov, chair of the Chemical, Pharmaceutical, and Environmental Protection Division at the Manufacturers Association of Israel.

Calling the whole Bay of Innovation project “unrealistic,” he charged that industry, currently representing less than 10% of the Israeli economy, had to be a more central anchor of the country, and that according to Environmental Protection Ministry figures, transport, and marine transport — which would increase with the import of refined materials if Bazan is closed down — produce more pollution than industry.

A year ago, a state comptroller report stated that some 900,000 residents of Haifa and the surrounding metropolitan area were being exposed to carcinogenic pollutants just as much as when a national plan was developed and accepted by the Environmental Protection Ministry in 2015.

The comptroller noted that a 2014 report from his office had found that the cancer rate in Haifa was 15 percent higher than the national average, and that asthma among children was twice the national average. Since then, the rate had been growing, as had the prevalence of heart and respiratory diseases, he said.

In 2016, research suggested a link between Haifa Bay’s heavy industry and symptoms of pollution-related disorders in infants such as smaller-than-average heads and relatively low weight, in addition to the high rates of cancer identified in previous studies.

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