PTQ Q2 2025 Issue

Hydrogen-rich gasoline offers an alternative to high octane costs

A new route to meeting octane releases the current reliance on catalytic reforming while striving to minimise aromatics and olefins in gasoline

John Burger and Don Byrne HRC Fuels George Hoekstra Hoekstra Trading

F or 15 years, there has been a bull market in octane in the US. Figure 1 shows how the US average pump price differential between premium and regular gas- oline soared from $0.20 a gallon (where it had been for decades) to $0.88 per gallon today. The octane bull market is more than coincidental with the US Environmental Protection Agency’s (EPA) gasoline sul- phur reduction efforts: • Tier 2: From a 260 ppm average to a 30 ppm limit phas- ing in 2004-2006. • Tier 3: From a 30 ppm limit to a 10 ppm limit phasing 2014-2020. Full implementation of Tier 3 regulations resulted in a 10-fold increase in the price of Tier 3 gasoline sulphur cred- its between 2022 and 2023. The Tier 3 sulphur limit makes it more costly to retain high-octane olefins, forcing refiners to push naphtha reformers to make more octane. Other factors also drive the bull market in octane because it occurs during a time of bearish sentiment about gaso- line and octane, predicating the need for a new route to meet octane demand using a technical innovation called hydrogen-rich content (HRC) gasoline. Four US refineries have taken steps toward commercialising HRC gasoline technology, with one partially implementing it in its cur- rent operation. Four other refineries are actively engaged in pre-commercial evaluations. Octane’s journey The octane of gasoline can be increased by rearranging molecules in the gasoline boiling range, adding high-octane blendstocks like ethanol, and/or adding octane-enhancing additives. Octane’s phase 1 was the leaded era, which lasted until the mid-1970s, when the US refinery-produced gasoline pool averaged 78 octane, and the octane additive tetra-ethyl lead contributed 11 octane units to make an 89 octane finished gasoline pool. With lead phase-out, the unleaded era began. By 1988, tetra-ethyl lead was gone, and refineries used a higher cost molecular rearrangement strategy, which delivered all the 88 octane units required by the finished gasoline pool directly from the refinery. That was accomplished by changing two major refining processes: catalytic reforming and fluid catalytic cracking (FCC).

Catalytic reformers were pushed harder to make more aromatics – by raising the rate and severity. This had the desired effect of making more aromatics but at the cost of lower yield and shorter run lengths. FCC unit catalyst ven- dors tweaked catalyst formulations to achieve higher gaso- line yields and more olefins (higher octane). These changes increased octane availability by increasing the aromaticity and olefinicity of gasoline, with some increase in refining cost. In the early 1990s, the need to reduce urban air pollution (particularly smog and ozone) ushered in the clean fuels era. For gasoline, this meant the production of low-sulphur, low-volatility refined gasoline accompanied by the use of several oxygen-containing octane additives, including eth- anol. The octane boost from these oxygenates allowed the production of a lower-octane refined gasoline called ‘BOB’ (blendstock for oxygenate blending), which reduced the demand for refinery-produced octane gallons. Low volatility specifications have been effective controls and adopted nationwide. Tier 3 sulphur average limits of 10 ppm sulphur in gasoline are designed to improve catalytic converter performance and further reduce NOx, CO, and particulate tailpipe emissions. To comply, refiners had to choose between significant investments in new processes (FCC feed pretreatment to reduce catalytic gasoline sulphur or direct hydrotreating of catalytic gasoline) or to rely on buying sulphur credits to make the average limits of 10 ppm sulphur in gasoline. As previously stated, the cost of

$1.00

2024, $0.88

$0.80

$0.60

$0.40

$0.20

$0.00

Figure 1 US premium-regular retail gasoline price difference

PTQ Q2 2025