Revamps 2025 Issue

Revamp for co-processing: hydroprocessing challenges

Co-processing via hydroprocessing represents a low-barrier entry into the production of renewable fuels. Risks and challenges have been segregated into five areas

Woody Shiflett Blue Ridge Consulting LLC

T he opportunity to participate in renewable liquid fuels markets by co-processing renewable feeds in refinery hydroprocessing units has been discussed to some extent in prior articles. 1 , 2 , 3 , 4 A deeper and broader look at the challenges involved is discussed. They can be categorised at a high level as follows: • Regulatory constraints and incentives. • Feedstock type and supply chain. • Chemistry implications, hydrogen consumption, heat With the exception of sustainable aviation fuel (SAF), regulations related to co-processing are largely geo- graphically fragmented. With respect to SAF, ASTM speci- fications covered under ASTM D1655 specify the following requirements: • 5 vol% co-processing of mono-, di-, and triglycerides, free fatty acids, and fatty acid esters. (Annex A1.2.2.1) • 5 vol% co-processing of hydrocarbons derived from synthesis gas via the Fischer-Tropsch process using iron or cobalt catalyst. (Annex A1.2.2.2) • Co-processing (including co-fractionation) of hydrocar- bons derived from hydroprocessed mono-, di-, and triglyc- erides, free fatty acids, and fatty acid esters (up to 24 vol% of the feed and 10 vol% of the product). (Annex A1.2.2.3) Hence, any refiner expecting to produce some level of SAF by co-processing renewable feeds must abide by these constraints. The International Civil Aviation Organization (ICAO) considers SAF produced via co-processing as com- pliant with Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) guidelines. The requirements for co-processing in the European Union (EU) are spelt out in the Renewable Energy Directive II (RED II) and further expanded in RED III. ReFuelEU Aviation is specific in its requirements for SAF feedstocks. EU SAF must be produced from feedstocks that are listed in Annex IX Part A and B of RED III or from “other feed - stock”. Due to sustainability and food safety concerns, the EU restricts the use of food and feed crops for biofuels and completely prohibits their use for SAF production. Specific release, and catalyst systems. • Corrosion considerations. • Analytical requirements. Regulatory constraints and incentives

restricted examples are rapeseed oil and sunflower oil. In particular, used cooking oil (UCO) and animal fats unfit for human consumption (categories 1 and 2 in Annex IX Part B of RED) and animal fats not explicitly listed in RED III (cat - egory 3 – unfit for human consumption but not otherwise used) are allowed. Certification schemes for the EU typi -

cally focus on these activities: • Raw material requirements. • Chain of custody requirements. • GHG emissions and calculation methodology. • Sustainability declarations. • Audit and certification requirements.

The European Commission recognises 18 voluntary cer - tification systems to receive recognition, and three prom - inent ones are operated by REDcert, ISCC, and CertifHY. In the US, the federal Renewable Fuel Standard (RFS) is applicable nationwide, and the Environmental Protection Agency (EPA) administers the programme and serves to certify fuels and provide Renewable Identification Numbers (RINs) for renewable fuels produced. These RINs are actively traded and enable refiners and fuel importers to meet their Renewable Volume Obligations (RVOs). The volatility of RINs is noteworthy, as shown in Figure 1 , and presents risk. 5 Co-processed fuels are designated as a D5 code by the EPA for an advanced renewable. As for national tax credits potentially available under the Inflation Reduction Act (IRA) under Section 45Z, co-process - ing (other than Fischer-Tropsch products) is specifically excluded. The IRA is currently ‘paused’, and predicting future credit trends is not possible. The US regulatory landscape is much more favourable towards bio-based renewable diesel and SAFs, particularly those using crop feedstocks, compared to other geographies, such as the UK and EU. Nonetheless, strong agricultural lobbies tend to oppose co-processing, which is seen as reducing demand for food crop feedstocks (vegetable oils). While the Trump administration has prom- ised to cut support for renewables in favour of fossil fuels, red state-favouring biofuel incentives are likely to remain in place or possibly be expanded. Several states (California, Oregon, Washington) have renewable fuels programmes such as California’s Low Carbon Fuel Standard (LCFS). The CA LCFS caps the carbon

Revamps 2025