PTQ Q3 2023 Issue

Reducing emissions while increasing refinery margin

A chemical heat pump that absorbs energy inside industrial waste heat has the potential to reduce pressure on refinery margin by fluctuating gas, electricity, and CO2 costs

Bernd Van Den Bossche Qpinch

E uropean refiners are facing a significant challenge in balancing the so-called energy trilemma in provid- ing affordable, reliable, and clean energy. Prioritising investments in energy efficiency, such as the true decarbon- isation of steam supply, allows for increased future refinery margins. Against this backdrop, the proprietary Qpinch Heat Transformer (QHT) has demonstrated refinery-scale, CO₂-neutral, and quasi-Opex-free process steam, hedging the pressure on operating margin by fluctuating gas, elec- tricity, and CO₂ costs. Increasing margin per barrel Following the 2015 Paris Agreement, increased societal expectations have moved most oil and gas corporates to pledge ambitions towards a future with net-zero green- house gas (GHG) emissions.1 The challenge of converting the ambitions into a set of executable projects comes on top of the two other main challenges the industry is fac- ing: to supply secure and affordable energy to meet socie- ty’s increasing energy needs. All of this is in a background where global peak demand for oil products is right ahead of us or already behind us, depending on the exact forecast.2 The uncertain macroeconomic outlook makes it difficult to prioritise investments. One option is to develop projects that increase the cash margin per barrel without compro- mising on resilience to future demand fluctuations and reducing CO₂ emissions in parallel. A textbook example of such investment is energy efficiency. Particularly for European refiners, where energy cost is putting an ever-in- creasing pressure on margins, energy efficiency improve- ments can make a difference and prevent rationalisation.³ It is estimated that the Scope 1 and 2 emissions of oil refineries represent about 4% of global CO₂ emissions.4 Most emissions are coming from fuel combustion in fur- naces, heaters, and steam boilers. Boilers contribute 20-50% of a refinery’s total CO₂ emissions.5 The exact value of a particular refinery is heavily influenced by its fuel mix used for steam generation, the level of heat integration, the refinery’s complexity, and the overall efficiency of its steam system. Regarding fuel mix, the higher the C/H ratio in the fuel, the more CO₂ is emitted per unit of combustion heat. So, a refinery power plant running on fuel gas or natural gas

will have lower CO₂ emissions than one running on heavy fuel oil or even vacuum residue. The efficiency of a boiler is mostly linked to the construction year, with more recent burners and boiler arrangements possessing higher con- version efficiencies, thus fewer CO₂ molecules emitted per unit of steam production. Steam header losses can be min- imised by insulation and proper steam trap maintenance. The more complex a refinery and the more integrated with downstream petrochemical process units, the more value is generated per barrel of crude intake, but the higher the absolute CO₂ emissions. The reason is that each con- version step has a certain heat requirement to overcome thermodynamical barriers. On the other hand, integrated and more complex refineries have more opportunities for heat integration to increase overall energy efficiency and decrease GHG intensity per ton of product generated. Furthermore, an intensity of 30 kg CO₂-equivalent emis- sions per barrel refinery output has been estimated for European refiners, with top and worst performers at ±50% of this value.⁶ Taking into account a near future without free allowances and with a European Union Emission Trading Scheme (ETS) price of €100/t CO₂, this means an additional burden on the refinery margin of €3 per barrel on average, coming on top of the already reduced margin due to high energy cost. So, there is a significant invest- ment opportunity in acquiring CO₂-neutral steam through energy efficiency. But what exactly would be the win of a ton of steam? The value of saving a ton of steam would be the marginal cost of steam (the value of the most expensive ton of steam the refinery is consuming at a moment in time). In most cases in Europe, this will be a ton of steam coming from a steam downstream petrochemical process units, the more value is generated per barrel of crude intake, but the higher the absolute CO₂ emissions The more complex a refinery and the more integrated with

PTQ Q3 2023