Feb-2022

Addressing Scope 1 and 2 emissions reduction targets

Methodologies to improve, evaluate, and implement changes within energy production can achieve these targets while maintaining safe, reliable, and profitable operation.

Robert Ohmes, Grant Jacobson, Roberto Tomotaki, Greg Zoll and Fred Lea
Becht

Article Summary

As the energy industry continues to embrace the energy transition and rationalise the impacts on its operations and viability, the major focus has been on examining and investing in diversification investments, such as renewable processing, sustainable aviation fuel (SAF), blue/green/turquoise/pink hydrogen, wind, and solar. These investments help provide lower carbon intensity energy carriers to a growing population and meet rising energy demand requirements, thereby impacting Scope 3 emissions. However, to achieve corporate and/or governmental greenhouse gases (GHG) reduction mandates, energy producing entities should also examine opportunities to improve energy efficiency and reduce carbon footprint of their existing assets (i.e. the Scope 1 and 2 emissions). The outcomes of the COP26 climate summit in Glasgow in 2021, along with rising natural gas prices, tighter energy supply, shrinking margins, and shifts in available financing sources, are adding layers of complexity to an already challenging situation of reducing energy usage and GHG emissions.

Based on IEA’s Net Zero by 2050, energy efficiency improvements account for 10% of the total CO2 emission reductions in order to achieve net zero targets by 2050 and are an early enabler of achieving these targets (IEA, 2021). In addition, energy consumption accounts for about 5 to 15% of many refining and petrochemical facilities’ margin, such that improving efficiency also drives profitability. To begin the process of reducing Scope 1 and 2 emissions, we must first understand the basis for these emission allocations, outline methodologies to improve, evaluate, and implement changes within energy production facilities, and highlight practical examples of energy reduction opportunities.

What are Scope 1 and 2 emissions?
To understand these definitions, let’s first start with outlining which emissions are included (Greenhouse Gas Protocol, 2020). As expected, CO2 is at the core of carbon emissions, but other GHG like methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons, and (PFCs) are also within the boundary. Therefore, when preparing balances for a given entity or looking for improvement opportunities, each of these areas should be explored.

Scope 1 and 2 are the emissions that most entities have a clearer understanding of and accounting on, as they are often required for tracking and filing by regulatory entities and corporate mandates. These are the emissions that are created by the fuel and power that is consumed or purchased by a given entity to convert its raw materials to a final product for either processing by another entity or use by the final consumer. Therefore, whether it be the purchased electricity from the local power grid, use of natural gas or coal for steam and power generation by the plant directly, or the gasoline and diesel used by the vehicles associated with the entity, all these combine into the Scope 1 and 2 emissions. Scope 3 emissions are more challenging to account for, as they relate to the entire energy required to produce and transport the raw material, as well as the raw material itself, and then the emissions created by the next processing entity through to the final product. Hence, these are left for a future discussion.

How does one start to reduce Scope 1 and 2 emissions?
As with most journeys, one must start with a plan and a pathway to achieve the targeted improvement. Figure 1 outlines an approach used within Becht to engage in energy optimisation activities, and the reader is encouraged to create their own approach that fits the specific needs of their site and improvement goals.

A few key learnings and considerations when preparing and executing this methodology are:
-    An accurate set of energy balances for the existing asset is absolutely critical. Given that the utilities systems are often the ‘forgotten’ part of the overall asset (until a problem arises or an energy optimisation study is completed), getting this information on an individual user and producer basis can be challenging. To close data gaps, consider adding measurement devices on key consumers or producers, using original design information to provide an initial estimate, and leveraging process simulations and chemical engineering basics to generate synthetic data on a given piece of equipment’s performance. As the adage goes, one cannot control what is not measured.
-    Field measurements and evaluations of equipment condition are just as important as completing the engineering analysis. Often, a field walk-through can identify opportunities that an energy balance may not make apparent. For instance, how many of the steam traps are leaking or putting quality condensate to the slab? What do the flame patterns look like within the firebox, both from a visual and a thermal scan basis? Have heater/boiler excess oxygen targets been set at reasonable values and optimised to the same? Are manual spillbacks open on pumps and compressors, thereby wasting energy?
-    Opportunities will exist within both the energy and process side, so make sure to examine the impact of a change of energy usage on the process implications. Fundamentally, the overall asset must still achieve profitable, safe, and reliable operation, so complete a holistic review to evaluate the impact of a shift in energy on these key elements. Benchmarking is important and gives one the measuring stick of current status and future progress, but one has to get down to the technical level to identify specific opportunities, rationalise them, and determine the right disposition for those changes.
-    A high level of on-stream reliability of the utility infrastructure is critical for asset integrity, so when looking at major shifts within the steam, fuel, and power systems, consider the redundancy implications and requirements. As an example, many facilities will progress to a higher degree of electrification of drivers and heating sources, but doing so will require significant electrical infrastructure, generation or supply redundancy, and a clear understanding of operating and abnormal operating scenarios.

Where are the best opportunities to lower Scope 1 and 2 emissions?
With the evaluation and implementation pathway framed out and a clear baseline defined, the next step is to identify potential improvement opportunities. To begin the process, a multi-layer and bi-directional process is recommended. As highlighted earlier, underlying performance starts at the equipment level, such that balances for each individual consumer and producer are needed. Once this element is in place, one can move out several levels to the unit, intra-unit, and site-wide levels. For some organisations, these distinct levels may not exist, but within the modern refinery, petrochemical plant, or factory, multiple units must work together to produce the final product slate. Defining a clear understanding of their integration, both in process and energy, will illuminate improvement areas. Each of these areas should be examined, as focusing on just a few of these areas will result in an incomplete picture of the asset’s potential improvement opportunities.

For each of these layers, the examples are listed in Figure 2 — though not exhaustive, these areas should be the primary focal areas to brainstorm opportunities (Becht, 2021). For each element, a holistic review of the energy, process, reliability, and process safety considerations must be completed to first define if an opportunity is technically feasible. From that point, the capital cost estimates can be generated and project economics reviewed to determine economic feasibility.