Decarbonisation Technology February 2026 Issue

2G ethanol as an industrial decarbonisation engine In an energy transition constrained by time, capital, and infrastructure, refinery- integrated 2G ethanol is an immediately deployable decarbonisation solution

Tania Guha Engineers India Limited

M ost refinery decarbonisation frameworks evaluate fuels and industrial energy systems in isolation, overlooking a major source of emissions avoidance reduction that lies in plain sight: refinery utilities. This article reveals how second-generation (2G) ethanol, when assessed across dual system boundaries, delivers substantially greater decarbonisation impact than conventional fuel-centric assessments suggest. Produced from lignocellulosic residues, 2G ethanol combines low fuel-cycle carbon intensity with a largely overlooked industrial function: the co-production of renewable steam and electricity from its lignin fraction. Using the Dual-Boundary Carbon Optimisation Model (DBCOM) as an evaluation tool, this study integrates transport fuel decarbonisation with physically measurable refinery utility displacement. When both boundaries are captured, the effective carbon intensity of 2G ethanol falls to approximately 15-18 g CO₂e/MJ, approaching electro-fuel (e-fuel) performance while avoiding the cost, infrastructure, and scalability constraints associated with hydrogen and power-to-liquids pathways. Drawing on operational learning from the Indian bio-refinery and publicly reported performance ranges from comparable global deployments, scenario analysis indicates that even partial refinery-level integration could deliver 40-60 MtCO₂ per year of emissions reduction by 2040 under moderate adoption. More fundamentally, DBCOM reframes 2G ethanol not just as a successor to biofuels, but as a dual-purpose decarbonisation platform capable of reducing transport emissions while

simultaneously displacing fossil-based industrial utilities within existing refinery assets. All numerical values represent order-of- magnitude estimates based on conservative co-location scenarios, intended to inform system-level decision-making rather than project-specific guarantees. Liquid fuel reality check The global energy transition must decarbonise the liquid-fuel system it still depends on, using solutions compatible with existing infrastructure. Despite rapid progress in electrification, liquid fuels are projected to dominate energy use in aviation, heavy transport, shipping, and petrochemicals well into the 2040s. These sectors rely on the unmatched energy density, storage stability, and maturity of liquid hydrocarbons, creating a central paradox: the transition must clean a system the world cannot quickly replace. Many decarbonisation pathways expose this tension. Green hydrogen requires new pipelines and extensive process redesign. Carbon capture and storage is capital-intensive and geographically constrained. E-fuels demand vast quantities of low-cost renewable electricity. First-generation (1G) ethanol, while mature, delivers only modest and structurally limited emissions reductions. 2G ethanol offers a fundamentally different proposition. Produced from lignocellulosic residues, it achieves lower lifecycle emissions while co-producing renewable steam and electricity from its lignin fraction – utilities directly compatible with refinery operations. Yet most assessments treat ethanol solely as