Oct-2011

FCC catalyst optimisation in response to rare earth prices

Lower levels of rare-earth catalyst formulations offset higher raw material costs, but refiners must consider the effects on catalyst performance and profitability

Solly Ismail, BASF Refining Catalysts

Article Summary

The use of rare earths in FCC catalyst was driven by the need for more active and hydrothermally stable products with better yield performance. Rare earths achieved these goals by enhancing catalytic activity and preventing loss of acid sites during normal unit operation. To address the specific needs of each FCC unit, catalyst manufacturers formulate catalysts with various rare earth levels that allow for optimal unit performance. The level of rare earths in a specific catalyst formulation is determined by operational severity and product objectives. As the need for increased amounts of gasoline grew over time, refiners tended to increase the level of rare earths in their catalyst formulations to meet their profitability targets. Rare earth gradually increased over the years and, at the end of 2010, the average was 3%, with several refineries running in excess of the average.

Figure 1 shows 2010 historical data for E-Cat samples analysed by BASF for rare earth. These reflect all the samples that were received in Q4 2010 before a price spike in rare earth oxides occurred. Sample count refers to the number of E-Cat samples analysed. The blue trend line shows the cumulative percentage of samples at or below a specific rare earth content. Although operational demands have not changed in the industry; current rare earth market conditions have put pressure on catalyst manufacturers as well as refiners to reassess the role of rare earths in the FCC industry. When looking at the catalytic options, it is critical to look at the overall value and not just the cost of rare earths.

Rare earths supply-demand balance
The supply-demand balance of the global rare earths market became disconnected when China, which produces 95% of the world’s supply of rare earths, severely cut its export quotas in July 2010. China is not expected to change its position, despite the World Trade Organisation’s warning that reluctance to share its rare earth supplies constitutes a violation of the global trade rules. Recently released export quotas for the second half of 2011 indicate a significant increase over the 2010 numbers. However, on close examination, the new quotas reveal that nothing has changed, as the new figures merely include ferrous alloys, which were not part of the quota in 2010. Market expectations are that price volatility will continue until new suppliers enter the market and re-establish the supply-demand balance. In a recent research note issued by Goldman Sachs,1 prices are likely to rise in the short term, over the next 18 months, and then soften in the 2013–2015 period. This softening of rare earth prices will most likely be due to additional capacity coming on-line from non-Chinese sources that are expected to significantly shift the supply picture in the coming years.

During the interim period, until rare earth prices once again normalise, the refining industry is looking for ways to address the increase in catalyst costs within their current budgetary constraints. Instinctively, the drive is to opt for lower rare earth catalyst formulations to offset the costs of the raw material. While this action can have an immediate and successful impact on the operating budget, it may not be the best decision for the refinery. An overall solution should encompass both the profitability of yield slate against the operating expense, which includes total catalyst costs. Understanding the constraints of a specific FCC unit is critical to making the optimal economic decision. BASF has proactively worked with its customers to examine low rare earth catalytic options that fit the needs of the specific users.

Technical options
BASF provides an option of increasing activity, and thereby maintaining conversion at constant catalyst addition, due to an increase in zeolite content, as represented by active and selective total surface area (TSA). The company’s in-situ technology is well suited to this application. The in-situ process begins with a catalyst-sized microsphere, and the ensuing step consists of growing the zeolite crystal within the microsphere. The zeolite in the process serves two functions; it provides the active and selective area, as well as the strength imparted to the microsphere.

This technology is distinct from incorporated technology, in which a single particle is formed consisting of an admixture of clay, zeolite and binder. As this technology is already optimised, the addition of substantial amounts of zeolite will require reducing either the clay or binder. The incorporated catalyst technique is inherently limited to an upper level of zeolite content and cannot increase surface area without compromising the strength to withstand breakage in the FCC unit.

The decision to change catalyst or reformulate catalyst is not a trivial one. Simply reducing the rare earth levels of the catalyst without a comprehensive study can result in severe yield penalties and possibly force the refinery to cut feed rates to the unit. All such consequences are economically prohibitive. Helping refiners to evaluate the effect of the rare earth level on key catalytic variables reduces the uncertainty of the change and facilitates the decision to move to a reformulation of their FCC catalyst when appropriate. The specifics of this change in formulation and the impact of rare earth level on conversion, as well as the effect of fresh catalyst surface area and addition rate, will be examined in this article.

How rare earths affect FCC catalyst performance
When considering a move to reduce the rare earth component in the catalyst, it is critical to grasp the performance shifts and economic impact of such a change. The economic impact comprises two aspects: it is a function of the total catalyst cost and the value created from a given catalyst formulation. Reducing the rare earth level has an immediate cost saving, but this calculation alone does not give the true profit generation picture if the margin benefits from the yield slate are not included. To illustrate the impact of such a change on key catalytic performance indicators, a proprietary FCC simulation model was used to study the effects of rare earth level, catalyst addition rate and fresh surface area for FCC units operating with the following feedstocks:
• Hydrotreated VGO: Refinery A
• Standard VGO: Refinery B   
• Moderate resid: Refinery C
• Heavy resid: Refinery D.