Identification of optimal pathways for deep decarbonization of high temperature industry - The Dutch oil refinery industry as case study

Abstract

Within this study, three deployment pathways for greenhouse gas emission reduction in the Dutch petroleum refinery sector were identified and assessed based on a quantitative techno-economic and qualitative strategic analysis of decarbonization measures. The approach of this study distinguishes itself from previous studies by incorporating petroleum output scenarios and the assessment of synergies between decarbonization options at the level of core processes of oil refineries. High temperature industrial decarbonization measures such as energy efficiency measures, carbon capture and storage, fuel switching, and electrification were studied. It was found that promising combinations of decarbonization measures and the optimal capacities for oil refineries depend heavily on key processing technologies, (future) plant configuration, fuel and feedstock, energy prices and policy.

External market changes that lead to a refinery activity reduction can cause a write-off of decarbonization assets and hereby influence the risks associated with a decarbonization measure. For this reason, a refinery model was created which facilitated detailed emission estimation at different output levels. Three scenarios developed by the International Energy Agency (IEA) were used to assess future petroleum output levels, enabling to distinguish between regret and no-regret investment decisions.

Besides continuous energy efficiency improvement it was found that carbon capture and storage must be implemented to reach short term emissions reduction targets. Electrification (boilers, electric naphtha crackers, electrolysis) show potential in the medium to long-term. It was found that sustainably produced hydrogen will be required to retain a stable output product if demands and chemical feedstocks increase.

The best economic performing pathway is one in which all fuel steams are transformed into blue hydrogen through pre-combustion carbon capture and storage: the blue hydrogen pathway, 11.1 MtCO2/y can be avoided, at a cost of 61.5 €/tCO2. When focusing on minimizing refinery adaptations and impact on the refining processes, the minimal impact pathway was identified, which performs second best, 10.3 MtCO2/y can be avoided at a cost of 68 €/tCO2. Due to an increased natural gas consumption within the blue hydrogen, a third pathway was identified with the premise to use zero natural gas: the natural gas independency pathway. Despite an increased strategic performance, this pathway has relatively high cost of avoided CO2, 217.6 €/tCO2.