50
40
30
20
10
0
-10
North America
Europe
Africa/Latin America/Middle East
Asia Paci c
-20
2024 integrated NCM
2023 integrated NCM
-30
Figure 5 Integrated refinery petrochemical site net cash margin, 2024 ($/bbl).
Source: Wood Mackenzie Refinery Evaluation Model
Liquid renewables are also a source of value addition for the refining sector, despite credit prices having fallen during 2024. Figure 4 shows the disproportionate contribution to the Gross Product Worth (GPW) compared to the yield of hydrotreated vegetable oil (HVO) for Atlantic Basin refineries undertaking co-processing of bio-feedstocks. The chart also shows that North America enjoys higher gross margins than Europe for converting used cooking oil (UCO) into renewable diesel (HVO), sustainable aviation fuel (SAF), and bio-naphtha. Competitiveness is key Figure 5 shows the 2024 net cash margin profile for all refineries above 50,000 b/d capacity, incorporating contributions from liquid renewables and petrochemicals. The
most competitive assets are typically in North America, with European assets typically positioned in the second or third quartile. We have more than 15 years of history of such a chart, and the key points to note are: • First quartile and fourth quartile assets stay in their respective quartile. • Fourth quartile assets often continue to operate despite negative margins as they are national oil company (NOC) owned and perform a broader role within the local economy, often supplying subsidised fuels to the local population. • Second and third quartile assets often oscillate between quartiles depending upon the relative strength of product crack spreads (gasoline vs middle distillates) and light/heavy feedstock differentials.
60
Emissions from IGCC
Rising EU ETS pricing will erode complex, high emission site’s margins. CBAM is only expected to provide minor relief.
140 180 160 100 120 200
10
CLOSE/ DIVEST
REDUCE EMISSIONS
7 9 8 6 5 4 3
50
40
30
European gross cracking margins are forecasted to remain US$/bbl below the global average
40 80 60
20
2
NCM average does not include Russian crude purchasing sites
10
INVEST
TARGET
20
0 1
0
-10
-5
0
5
10
15
20
25
2024 Integrated Net Cash Margin (US$/bbl)
NWE Gross Brent FCC Margin, US$/bbl Global Composite Margin, US$/bbl
European sites
Russian crude purchaser
Recent/up coming transaction
EU ETS, US$/tCO e
Transaction candidates
Upcoming/recent closure
Figure 6 Gross margin and EU ETS forecast alongside 2024 European NCM vs emissions intensity quadrant. Source: Wood Mackenzie Refinery Evaluation Model and Product Markets Service
www.decarbonisationtechnology.com
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