May-2022

Transition to net zero: steps to decarbonise the oil refining industry

A review of the solutions being employed by oil refineries to reduce their Scope 1, 2, and 3 greenhouse gas emissions.

Marie Goret-Rana and Carl Keeley
Johnson Matthey

Article Summary

Despite improvements in vehicle fuel economy, increasing adoption of hybrids, and EVs, petroleum-based fuel demand continues to grow, at least in the short to mid-term. In general, demand is generated from population growth and increased car ownership, and both are increasing. However, during the pandemic, people concerned about health moved around less. Consequently, there was a sharp decline in fuel demand, which had an adverse impact on the global oil and oil refining system. However, chemicals demand was sustained, as chemicals are used in many everyday products. For a small number of refineries, which were able to convert fuel molecules to chemicals, the sustained chemicals demand allowed them to stabilise profitability during the pandemic. This provided a glimpse of the future.

In the future, we imagine demand for fossil-sourced hydrocarbon fuels will decline due to increasing global efforts to fight climate change, including the introduction of a carbon tax in many countries. Therefore, refineries need solutions to decarbonise fuels production. Furthermore, as petroleum-based fuel demand decreases, chemical production is a route to stabilise and grow oil refining margins. In fact, highly profitable oil refineries already produce a high percentage of chemicals, and demand for chemicals is expected to increase. Therefore, it seems likely many oil refineries will seek solutions to expand their capability to make chemicals.

In this article, Johnson Matthey introduces solutions being employed by oil refineries to reduce their Scope 1, 2, and 3 greenhouse gas (GHG) emissions:
-    Scope 1 solutions reduce direct GHG emissions from the company’s processes
-    Scope 2 solutions reduce indirect GHG emissions from imported electricity and steam
-    Scope 3 solutions reduce other indirect GHG emissions, including decarbonising fuels production and increasing chemical manufacturing.

Scope 1: Reduce direct emissions from the process itself
A sensible first step is to reduce the emissions from the existing process units. Plant monitoring and benchmarking can be used to identify opportunities to improve energy efficiency. In addition, sophisticated catalyst performance monitoring allows operators to increase cycle length, and therefore improve the utilisation of natural resources such as base metals, precious metals, and catalyst materials.

In many factories, hydrogen is an important utility, used to make products, and produce electricity and steam. Presently, steam methane reforming (SMR) is used to make the most of the refinery hydrogen. The reformer in this process produces carbon dioxide (CO2). Johnson Matthey offers a range of Katalco services aimed at improving plant reliability, efficiency, throughput, safety, and environmental performance. In addition, we have recently established a Low Carbon Solution business that is addressing the decarbonisation of existing syngas facilities. Johnson Matthey is leveraging its capabilities in existing scalable technologies, especially in steam reforming. One of the early offerings is a SMR revamp that allows operators to capture the process CO2, which can then be used as a feedstock or stored. This solution allows the hydrogen plant CO2 emissions to be reduced by up to 95%. The cost of the revamp is significantly less than building a new hydrogen plant.
Hydrogen produced using SMR is called grey hydrogen, because it uses non-renewable feeds to produce hydrogen and CO2, and the CO2 is typically released to the atmosphere. More environmentally friendly alternatives are blue and green hydrogen. In the blue hydrogen flowsheet, the by-product CO2 is captured and made available for either utilisation or storage. In our Blue Hydrogen Technology (LCH), an advanced reforming system comprising an autothermal reformer (ATR)/gas-heated reformer (GHR) is combined with carbon capture. Green hydrogen uses renewable electricity to produce hydrogen without producing any CO2. Hydrogen produced via blue and green routes can be used to decarbonise existing fuels and chemicals production. For more information, see Table 1.

Scope 2: Reduce emissions associated with imported electricity and steam
An oil refinery can replace imported electricity with low carbon hydrogen that is used to decarbonise its energy requirements, and excess low carbon energy can be exported to nearby industry. When several industries are co-located, there is the potential to create a hydrogen hub.
An example of a hydrogen hub is HyNet North West, based in England (UK). The heart of the project is Johnson Matthey’s LCH. This hydrogen hub will produce blue hydrogen. This blue hydrogen will be used to replace fossil fuels used by industry and transportation, and the hydrogen will also be used to heat nearby homes. The by-product CO2 captured from the LCH process and CO2 captured from nearby factories will be safely stored in an existing offshore well. The consortium includes Progressive Energy, Essar Oil (UK) Limited, ENI, Johnson Matthey, and other valued partners. This project is progressing fast and will be onstream circa 2025.¹ The complexity of this ground-breaking project is illustrated in Figure 1.

Green hydrogen goes a step further. Hydrogen is produced via the electrolysis of water using renewable electricity (such as wind and solar). The water is split into oxygen and hydrogen, without producing any CO2. The development of green hydrogen is moving fast. Although renewable energy output is variable, proton exchange membrane (PEM) electrolysers are engineered to cope with varying energy input. At the heart of every PEM electrolyser is a catalyst coated membrane (CCM), which is responsible for the production of hydrogen. These membranes consist of precisely engineered layers of structured catalysts, typically platinum and iridium oxide. The catalysts are applied to solid membranes in a way that maximises potential hydrogen production. We design and manufacture high-performance CCMs at scale, building on decades of experience in fuel cells which use very similar technologies. Green hydrogen coming out of the electrolyser contains up to 1% oxygen, which is detrimental for most applications. However, oxygen can be economically removed by catalytic oxidation of hydrogen using our Puravoc Green catalysts. As a large secondary refiner of platinum group metals, we are also committed to the creation of an efficient recycling system to help unlock future capacity and support a sustainable energy transition.

Green hydrogen is available and oil refineries are starting to explore its use. One example is Shell’s Rhineland refinery in Germany, where green hydrogen is produced using a PEM electrolyser, powered by renewable electricity from offshore wind. Green hydrogen will be used initially to decarbonise fuels production at the refinery.²

Although green hydrogen is more expensive to produce than grey or blue hydrogen today, the key input — renewable electricity — is both increasing in capacity and reducing in cost. What is beyond doubt is that green hydrogen will play an increasing role in the transition to net zero as the cost of renewable electricity continues to fall, and the cost of electrolysers reduces.