Major firms, including ADNOC, Lundin Energy, Occidental, Sinopec, and SOCAR, have committed to reduce crude’s carbon footprint by lowering crude carbon intensity. Finally, the oil and gas industry is prioritising lower-emis- sion energy sources amidst sustained global oil demand and emission targets. Rising carbon credit prices or taxes will incentivise CI reduction, making lower-CI crude pro- duction crucial for profitability and capital allocation. The sale of carbon-neutral crudes has already begun. Future widespread carbon pricing could shift investment away from energy-intensive offshore or onshore projects (like oil sands) toward near-shore, grid-accessible locations, unless carbon capture is employed. Refiners will increasingly pri- oritise low-CI crudes to reduce their own carbon footprints, a necessity amplified by global disruptions and the push for refinery decarbonisation. Thus, global crude procurement is at a critical juncture, where decisions on crude grades will have a profound impact on both short-term profitability and long-term sustainability. Electrification and cogeneration/combined heat and power/IGCC Achieving decarbonisation mandates companies to revise business models and adopt new technologies while remain- ing competitive. Energy efficiency is a primary, cost-effec- tive decarbonisation pathway, further incentivised by global carbon pricing mechanisms like taxes or emissions trading schemes. There are key technologies and fuel sources for reducing industrial carbon emissions, including electrifica- tion, cogeneration/CHP/IGCC, and the combustion of zero- or low-carbon fuels. Electrification trends and opportunities encompass inno- vations such as electric heaters, hydrogen electrolysis, and steam cracker electrification. While politically turbulent, as seen in some recent shifts in EV policy in the US, indus- try leaders remain confident that electrification is a funda- mental trajectory, with plug-in and fuel cell vehicles on the road in the US continuing to grow. Petrobras, for exam- ple, recently announced a contract with Hitachi Energy to assess the electrification of its offshore oil operations, recognising that power generation accounts for 65% of its production-related emissions. CHP and IGCC technologies boost power and heat effi- ciency, reducing costs, carbon footprints, and grid depend- ence. These systems involve differentiating between cogeneration and CHP (covering gas/steam expansion turbines and turbine pre-coupling) and outlining IGCC principles and applications. The CHP market is projected for strong growth, with a compound annual growth rate (CAGR) of 7.6% to reach $41.61 billion by 2029, driven by energy efficiency goals, the transition to low-carbon systems, and the increasing adoption of biomass power for CHP projects. Refiners like Flint Hills Resources have successfully added CHP systems, significantly bolstering efficiency and reducing emissions at their facilities. The US EPA also highlights a growing interest in using renewable natural gas (RNG) and green hydrogen as new low-car- bon CHP fuel options, with some engine models already hydrogen-capable.
Refiners are also exploring combustion using zero-car- bon or low-carbon fuels, such as biofuels, biomass, e-fuels, and green hydrogen, as alternative fuel sources. Despite technical and implementation challenges and complex regulatory factors, these fuels offer a pathway to carbon footprint reduction while maintaining product quality. US biofuel support continues to clear the way for new crush capacity, with policymakers pushing refiners to increase output and rely more on domestic feedstocks. This support includes proposed record-high biofuel blend mandates for the coming years and retooling of crucial US tax credits to increase subsidies for crop-based fuels, further incentivis- ing the shift toward lower-carbon fuel production within refineries. Overall, refiners can leverage electrification, cogenera- tion/CHP/IGCC, and zero-or low-carbon combustion fuels to reduce environmental impact, improve efficiency, and remain competitive in a rapidly evolving market. While the widespread adoption of electrification remains constrained by the cost and availability of renewable energy, continuous technological advancements and strong policy signals are pushing the industry toward a more sustainable and effi- cient future. Carbon capture utilisation and storage Facing decarbonisation pressure, the refining industry is increasingly exploring CCUS to abate significant Scope 1 CO2 emissions and achieve net-zero targets. CCUS is vital for cleaner hydrogen production (blue hydrogen as a bridge to green) and can reduce transport Scope 3 emissions via low-carbon hydrogen fuels. The International Energy Agency (IEA) highlights the potential of CCUS for cost- effective CO2 abatement across the oil and gas value chain, supported by rising carbon pricing. While current deploy- ment is limited, primarily for enhanced oil recovery (EOR), broader opportunities exist. Integrating CCS (achieving more than 90% capture) with other measures, such as fuel switching, is crucial for comprehensive refinery decarbon- isation, complementing energy efficiency gains that alone are often insufficient for emission targets. CCS involves capturing and compressing CO2 for geolog- ical storage, while CCUS includes both sequestration and industrial utilisation. Refineries can apply pre-combustion, oxy-combustion, and post-combustion capture technolo- gies. Commercial and emerging technologies are applicable to various refinery sources, including combustion emis- sions (for example, Baker Hughes, Fluor, Mitsubishi Heavy Industries), fluid catalytic cracking (FCC) units (for example, IFP Energies Nouvelles/Prosernat), hydrogen production (for example, Air Liquide, Aker Carbon Capture, Axens, BASF, Shell Catalysts & Technologies), and ethylene plants. Refineries are adopting various plant practices for carbon capture, including a stepwise approach, use of amino-acid salts, integration with flue gas heat recovery, optimising CO2 capture from syngas, and lowering emissions from hydrogen plants with CO2 capture. Numerous global CCS/ CCUS projects and demonstrations at refineries are under- way around the world. Meanwhile, oil and gas companies are increasingly
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PTQ Q1 2026
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