Decarbonisation and sustainability value chains
Deciding which decarbonisation pathway to adopt can be difficult, as there are multiple technologies to consider, each with its own risks and rewards.
Shell Catalysts & Technologies
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Reducing carbon dioxide (CO2) emissions is an important goal for the operators of refineries, petrochemical plants, and those in hard-to-abate industries such as steel and cement manufacturing. There are numerous decarbonisation pathways and technologies to consider, including renewable fuels, hydrogen, and carbon capture and storage (CCS). As each carries its own risks and rewards, deciding which to adopt can be challenging.
Shell has been actively decarbonising its own refineries by transforming them into energy and chemicals parks, with Shell Catalysts & Technologies playing a central role in this process. We have been supporting companies in other sectors, too. So in this article, we will share our experience to provide insights into some of the options available.
First, let us look at why decarbonisation is necessary. The Paris Agreement poses an ambitious goal of maintaining the average global temperature increase below 2°C compared with the pre-industrial level and, ideally, limiting it to 1.5°C. Achieving these targets is a daunting task that requires almost halving the net CO2 emissions in the next 30 years, from 32 Gt in 2017 to 18.4 Gt per annum by 2050.
This is exacerbated, however, by the increasing global population, which is expected to increase from about 8 billion in 2023 to almost 10 billion by 2050. In the same period, energy demand is expected to rise by a third.
While social and investor pressures are growing, many countries have set net-zero targets and begun implementing energy transition policies.
Shell’s net-zero targets
Shell’s net-zero target is to reduce scope 1, 2, and 3 CO2 emissions from 1.7 Gt per annum to zero by 2050. Interestingly, as most of the company’s CO2 emissions come from energy products that customers have bought and used themselves (Scope 3), it believes that working with customers, sector by sector, is the way to do this. So it intends to work with customers across many sectors, including aviation, shipping, road freight and industry, to decarbonise value chains. It will do this by listening to them and learning with them.
Shell is working to meet its decarbonisation targets. For example, by the end of 2022, it had reduced emissions from its operations by 30% and reduced the net carbon intensity of the energy products it sells by 3.8% (both compared with 2016). It also more than doubled its solar and wind generation capacity, and increased the number of electric vehicle charge points it owns or operates by around 62% (both compared to 2021). It is also developing renewable (green) hydrogen and growing its biofuels portfolio.
To achieve this, Shell is transforming some of its refineries into energy and chemicals parks (see Figure 1) – integrated lower-carbon clusters that can better adapt to future changes in customer demand. Among the sites undergoing this transformation are Europe’s largest refinery, Pernis, which has become Shell Energy and Chemicals Park Rotterdam, and Germany’s largest, Rheinland, which is becoming Shell Energy and Chemicals Park Rheinland.
These energy and chemicals parks are diversifying their energy inputs by replacing crude oil with renewable and circular sources such as solar, wind, plastic waste, and biomass. Shell is also changing its mobility products portfolio to include more hydrogen, biofuels, and renewable energy. The company is adding greater flexibility to produce more performance chemicals, lubricants, and bitumen while capturing and storing its operational emissions to reduce the carbon intensity of the products it sells.
Shell has several decarbonisation projects in operation or development at its energy and chemicals parks, demonstrating that decarbonisation is happening now, not just being discussed. For example, the Refhyne I project produces renewable hydrogen right now, and the Refhyne II and Holland Hydrogen I projects will bring step-change capacity increases. It is also producing biofuels through co-processing, and dedicated units in development at Rotterdam, Rheinland, and other sites will increase capacity substantially.
CCS is another important decarbonisation lever. Shell Catalysts & Technologies is providing key technologies for both long-running projects like Shell’s Quest CCS venture and others in development, including Porthos in the Netherlands, which will receive CO2 from Shell Energy and Chemicals Park Rotterdam.
We are performing an important enabling role for those energy and chemical parks by providing key technologies for a number of those projects. For example, we are providing the Shell Renewable Refining Process that Rotterdam will be using to produce biofuels and sustainable aviation fuels. ADIP Ultra carbon capture technology is already in use at Quest and will also be used at Rotterdam and Rheinland. Gas POx technology will enable Rotterdam to produce decarbonised (blue) hydrogen when Porthos comes online.
However, Shell Catalysts & Technologies is not only working with refineries and petrochemical plants. For example, it plays an important enabling role in the cross-sector Humber Zero and Northern Lights projects, which comprise power, steel, cement, pulp, and paper companies, as well as oil and gas producers.
In addition, the Cansolv CO2 Capture System has recently been selected for numerous projects in other sectors. After operating at Boundary Dam power station in Canada for many years, the technology was recently selected by VPI Immingham and Calpine for their power plants, as well as Hafslund Oslo Celsio (formerly known as Fortum Oslo Varme) for its waste-to-energy plant in Norway, among others.
In this new world, collaboration is more important than ever. We believe technology development and partnering are key to achieving our decarbonisation goals. Our solutions are available to third parties for mutual benefit. Through partnerships, we will evolve and continuously improve our technologies. For example, the Shell Renewable Refining Process is evolving to process an increasingly wide range of advanced feeds.
Integrated decarbonisation value chains
Figure 2 shows that, to decarbonise, there are numerous renewable and circular feedstocks (left-hand side) from which numerous desirable products (right-hand side) can be made. Furthermore, as shown in the centre, there are multiple potential pathways from left to right.
Because it is a complex pathway from left to right, breaking it down into five separate value chains can be very useful, especially because they all have different levels of maturity and drivers and, in some cases, are applicable to different industries. These value chains are renewable fuels, plastic circularity, hydrogen, CCS, and syngas production and utilisation, each of which is discussed below.
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