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Transition to net zero: steps to decarbonize 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. 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, who 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 hydrocarbon based 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 stabilize 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; and
• Scope 3 solutions reduce other indirect GHG emissions, including decarbonising fuels production and increasing chemical manufacturing.

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