Aug-2024

Resiliency in decarbonisation pathways

It is important to systematically incorporate an array of considerations when it comes to developing a carbon reduction plan.

Marina Barta and Paul Cannizzo
Solomon Associates

Article Summary

The world has entered a new era with a focus on sustainability strategies in almost every industry globally. Ambitious carbon reduction goals have been announced by numerous industries, corporations, countries, and regions. Companies have an obligation to evaluate their carbon emissions footprint responsibly and consider carbon reduction steps towards achieving the worldwide challenge of limiting the temperature rise to 1.5°C by 2100.

Sustainability exponentially increased the need for innovation and amplified the need to surpass business-as-usual technologies. We have seen the genesis of great ideas blossoming into technology layers that multiple industries can utilise to achieve the goal of net zero. Industry commitments through 2030, 2040, and 2050 are vital in making any decarbonisation pathway successful. One needs to ensure a credible basis is used in making strong commitments, as credibility is important when publicly making bold statements.

This article will explore the factors that make a pathway resilient enough to withstand change in this multivariable and complex challenge and how to develop strategic decarbonisation pathways during the world’s energy transition.

Questions to ask when putting together a decarbonisation plan include: How resilient is the pathway to net zero? How feasible is the pathway to net zero? Is the pathway robust enough to withstand policy change, technology shift, and various pressure test scenarios, among other things?

The fundamentals
A strong foundation for any pathway to net zero starts with understanding the company’s carbon footprint, then completing the following elements:
• Define the basis and reference year.
• Calculate Scope 1 and 2 emissions, and as the industry evolves, this can also extend to Scope 3 emissions.
• Establish decarbonisation capability through the company’s marginal CO₂ cost abatement curve.
• Incorporate current energy and margin project opportunities.
• Integrate the impact of asset growth, divestment, and acquisition decisions.
• Incorporate and align with planned turnarounds and downtimes and major investments in refinery configurations that may be required.

Equally important is ensuring that these plans and steps are kept evergreen and that there is a process for keeping the pathway to net zero up to date to hold the organisation accountable and responsible. The organisation should implement a stage gate process where the plan is periodically reviewed to ensure it is on track and that critical assumptions remain valid. Ideally, the timing and review criteria should be part of the original plan, not based on some arbitrary period that fits into a traditional planning horizon.

Establishing decarbonisation capability may extend to but is not limited to:

Energy optimisation and efficiency
• Energy optimisation is about operational optimisation around key energy equipment (furnace efficiencies, tower pressures, boiler efficiencies, steam system management, compressor recycle). It can also involve maintenance investment to repair in-kind facilities to enable operational optimisation (furnace damper repair, steam trap repair, insulation repair, cleaning heat exchangers).

• Energy efficiency focuses on improving the design and capability to enhance performance via capital investment (waste heat recovery, condensate recovery, heat exchanger upgrades, heat integration, steam vs electrical driver selection).

•  As the industry adapts to changing product demand and crude feedstock scenarios because of the drive to decarbonise, significant capital investment will be seen as refinery configurations adapt accordingly. This presents key opportunities to improve both major equipment and process energy efficiencies as part of optimising the required capital investment in conjunction with aligning to decarbonisation goals in the face of changing energy and carbon prices. This same opportunistic approach to energy efficiency improvement can also be applied to major equipment replacement requirements during turnarounds and other planned downtime events.

Hydrogen optimisation
Hydrogen balance diagnostics are essential to ensure there is an optimal production-to-demand balance and to avoid downgrading valuable hydrogen to fuel below cost value. Evaluation of hydrogen to fuel should incorporate carbon incentives that are dependent on the country/region emissions scheme.

Crude feedstock selection
Solomon has conducted further studies around the behaviours of various upstream assets in terms of crude carbon intensity. On a worldwide basis, crude extraction carbon emissions intensity is observed to be four times higher than the carbon emissions intensity through a typical average conversion refinery. A large variance exists across both upstream and refining operations as it depends on the type of crude, sources of crude, ages of wells, flaring, and transportation.

Low-carbon fuel options
High-carbon-to-low-carbon fuel swapping is an important lever in enabling carbon reduction (coal, fuel oil/naphtha firing, heavy ends).

Renewable energy
Renewable energy and credits are becoming increasingly available globally. Renewable energy can be supplied behind and inside the refinery meter. Renewable power supply displaces higher-emissions power generation supply options.

Electrification
It is important to properly evaluate opportunities to electrify condensing steam turbine power generation, thereby capturing steam letdown work while evaluating the full steam and energy balance implications for the facility.

Flare recovery
While it is important to focus on flare reduction during upset conditions and the recovery of incremental flared materials, priority should be given to evaluating the potential for eliminating sources of flaring overall.

Reduction in methane venting and fugitive emissions
Methane is a potent greenhouse gas, with more than 30 times the global warming potential per tonne of CO2. Reduction in methane venting and leakage can lead to a large reduction in the overall emissions from a facility.