A Cleaner and Profitable Alternative to the Downstream Industry – The Biomass as Raw Material to Achieve Low Carbon Energy

Introduction and Context

        The increasing necessity to reduce the environmental impact produced by fossil fuels has been created a trend of decarbonization of the energetic matrix at a global level, creating then a new challenge to the crude oil production and processing chain.

           In this scenario, one of the available alternatives is the raising of renewable fuels participation in the energetic matrix as well as the higher use of renewable raw materials in the feed stream of crude oil refineries and this fact has been lead some refining technology licensors to dedicate efforts to develop processes to this purpose.  Despite the economic crisis due to the pandemic of COVID-19, the investments in renewable energy are among the less impacted, as presented in Figure 1 based on data from the International Energy Agency (IEA).

Figure 1 – Impact of COVID-19 Pandemic Crisis over Energy Investments (IEA, 2020).

This fact shows the compromise and concern of the players and governments to build a cleaner energy matrix through the energy transition efforts aiming to reduce the participation of the fossil fuels in the energetic matrix at a global level.

           Another deep change in the downstream sector is the trend of reduction in transportation fuels demand accompanied by the growth of the petrochemicals market at a global level. This trend leads some forecasts to indicate that, in the middle term, the petrochemicals production will be responsible for the major part of the crude oil consumption over passing the transportation fuels. Some refining technology developers like UOP Company introduce the concept of zero fuels refineries, where the refining hardware is totally focused to produce petrochemicals, ensuring higher added value to the processed crude as well as higher profitability.

           It seems that the future of the downstream industry tends to be based on increasing participation of renewable fuels while the crude oil will be destined for noblest purposes like petrochemicals and lubricating oils, contributing to a lower environmental footprint of the crude oil processing chain.

Fuels and Petrochemicals from Biomass

           The use of renewable raw material to produce fuels has been discussed in the last decades, Figure 2 presents some possible routes capable to produce fuels from biomass.

Figure 2 – Renewable Raw Material Processing Routs (Article by UOP Company, 2007).

The adoption of synergies between fossil fuels and renewables in the downstream industry depends on the market where the refiner is inserted, mainly related to the availability of renewable raw materials as well as the capacity of the installed refining hardware to processing the renewable streams, among the co-processing strategies we can quote the processing of renewable materials in FCC and hydroprocessing units.

           The use of renewable in hydrotreating units is presented in Figure 3 aiming to produce high-quality fuels like Diesel and Jet Fuel. 

Figure 3 – Typical Process Arrangement of Low-Severity Hydrotreating Unit.

Some refiners and technology licensors have been developed process technologies that make possible the higher synergy of renewables with the conventional refining industry. Some examples are the technologies Esterfip-H™ and Vegan™ by Axens Company that allow the production of Diesel and Jet Fuel from renewable raw material, beyond these technologies the process Gasel™ also from Axens Company applies renewable raw material and the Fischer-Tropsch route to produce transportation fuels.  The UOP Company developed the technologies Green Diesel™ and Green Jet Fuel™ as presented in Figure 4. 

Figure 4 –Green Jet Fuel™ Process by UOP Company.

Among the remain technologies dedicated to the processing of renewables feedstreams, we can quote the Hydroflex™ process by Haldor Topsoe Company and the process IH2™ by Shell Company.

           At this point, it’s important to differentiate the biodiesel and the Hydrotreated Vegetable Oil (HVO). The biodiesel it’s produced through the transesterification of fatty acids while the HVO is totally produced through the hydroprocessing of renewable raw material. Another interesting technology capable to produce Jet fuel and Diesel from biomass is the ReadiJet™ and ReadiDiesel™ processes developed by Lummus Company in association with Applied Research Associates (ARA), Figure 5 presents a simplified process flow diagram for these technologies.

Figure 5 – ReadiJet™ and ReadiDiesel™ Technologies by Lummus Company (VOEGELE, E. Biomass Magazine, 2013).

In the petrochemical sector, the production of petrochemical intermediates also has been adopted renewables processing routes as ethanol to produce ethylene. The Braskem Company has been applied the ethylene production through ethanol dehydration since 2010 and the Technip Company commercializes the Hummingbird™ technology also dedicated to producing ethylene from ethanol, this process is shown in Figure 6.

Figure 6 – Hummingbird™ Technology to produce ethylene from ethanol, by Technip Company (Technip Company, 2018).

As a case study, the Brazilian refining market has a demand of 2,3 million barrels per day from derivatives being the seventh crude oil derivatives consumer in the world and the third consumer of transportation fuels, from this volume, close to 550 thousand barrels are supplied by renewable fuels, mainly biodiesel and ethanol. 

           By the Law, the Diesel commercialized in Brazil should contain at least 10 % in volume of biodiesel and the gasoline should contain 27 % of ethanol which ensures the renewables participation in the Brazilian energetic matrix.

In the Brazilian case, the refineries don’t process renewables feed streams currently, the mixture of renewable fuels and fossil fuels is carried out by the distributors. Despite this, in 2020 the Brazilian Oil State Company, Petrobras start some tests in his refineries processing vegetable oil with fossil diesel in hydrotreating units, this route is capable to produce biokerosene that present great interest from the consumers due to the current pressure over the aviation sector to reduce the greenhouse gases emissions from his operations.

           Face the current decarbonization trend of the global energetic matrix, the governments tend to offer tax breaks to refiners that raise the participation of renewables in the crude oil refineries feedstocks or even the blending of renewable fuels with fossil fuels as in the Brazilian market. According to the marketing scenario, the adoption of renewables processing technologies can be economically attractive both to the production of transportation fuels and petrochemical intermediates as quoted earlier. Recent news indicates that some refiners are converting some of their crude oil refineries into renewable processing plants, the most recent example is the conversion of the Phillips 66 San Francisco Refinery in Rodeo, California (USA) into a renewable processing plant with the capacity to produce 680 million gallons per year of renewable fuels, this fact shows that the use of biomass as a raw material in the downstream industry, it’s no more a trend, but a reality.

Noblest Purpose to Crude Oil – Petrochemicals Maximization

Historically, the refining industry growth was sustained and focused on transportation fuels, this can explain the profile of the traditional refining schemes. Nowadays, the downstream industry is facing a trend of reduction in transportation fuels demand, followed by growing demand by petrochemicals, this fact is the main driving force to promote the change of focus in the downstream industry.

The growing market of petrochemicals has been lead some refiners to look for closer integration between refining and petrochemicals assets aiming to reach more adherence with the market demand, improve revenues, and reduce operating costs. To reach this goal, the refiners are implementing the most integrated refining schemes as presented in Figure 7.

Figure 7 – Example of an Integrated Refining Focusing on Petrochemicals Scheme by UOP Company.

As presented in Figure 7, the integrated refining scheme rely on flexible refining technologies as catalytic reforming and fluid catalytic cracking (FCC) that are capable to reach the production of high-quality petrochemicals and transportation fuels, according to the market demand. A more integrated refining configuration allows the maximization of petrochemicals, raising the refining margins and ensures higher value addition to the processed crude oils. Another fundamental competitive advantage is the operational flexibility reached through the integrated refining configurations, allowing the processing of discounted and cheaper crude oils, raising even more the refining margins.

Conclusion

           The energy transition is not a question of choice to the players of downstream industry, it’s a demand from the society and a survival question in middle term. Decarbonization of the energetic matrix requires even more flexibility and agility by refiners aiming to keep and improve his refining margins in the scenario of reduction in the transportation fuels demand and growing demand by petrochemicals, however, as aforementioned there is available processing technologies capable to allow the co-processing of renewables and fossil feed streams in crude oil refineries, reducing the environmental impact of downstream industry, as presented above, some derivatives can totally be produced from biomass and the dedication of the main refining technology licensors to this topic like Axens, UOP, Lummus, Technip, Haldor Topsoe, etc. Revels that the biomass as a raw material in the downstream industry it’s a serious trend and the refiners need to consider this fact in their strategic planning.

           Nowadays, is still difficult to imagine the global energetic matrix free of fossil transportation fuels, especially in developing economies, and raise the participation of renewable raw material in crude oil refineries can be an attractive strategy.

Another significant trend capable to produce disruptive changes in the crude oil refining industry is the increasing integration with petrochemical assets. Recent forecasts and growing demand by petrochemicals as well as the pressure to minimize the environmental impact produced by fossil fuels creates a positive scenario and acts as the main driving force to closer integration between refining and petrochemical assets, in the extreme scenario the zero fuels refineries tend to grow in the middle term, especially in developed economies.

           The production of petrochemicals can ensure more added values to the crude oil reserves as well as the noblest destiny to a finite resource, furthermore, minimize the environmental impact produced by the crude oil processing chain. In this sense, the concept of zero fuel refineries can be an attractive alternative in the future of the downstream industry.

           In summary, the renewable participation and petrochemicals maximization in the refining hardware seems to lead the changes in the downstream industry and the refiners can be benefited from better refining margins while the society receives high-quality derivatives with less environmental footprint.

References:

GARY, J. H.; HANDWERK, G. E. Petroleum Refining – Technology and Economics.4th ed. Marcel Dekker., 2001.

HOLMGREN, J.; GOSLING, C.; COUCH, K.; KALNES, T.; MARKER, T.; McCALL, M.; MARINANGELI, R. - Refining Biofeedstock Innovations, 2007.

  VU, T.; RITCHIE, J. Naphtha Complex Optimization for Petrochemical Production, UOP Company, 2019.

Dr. Marcio Wagner da Silva is Process Engineer and Project Manager focusing on Crude Oil Refining Industry based in São José dos Campos, Brazil. Bachelor in Chemical Engineering from the University of Maringa (UEM), Brazil, and PhD. in Chemical Engineering from the University of Campinas (UNICAMP), Brazil. Has extensive experience in research, design, and construction to oil and gas industry including developing and coordinating projects for operational improvements and debottlenecking to bottom barrel units, moreover Dr. Marcio Wagner have MBA in Project Management from the Federal University of Rio de Janeiro (UFRJ) and is certified in Business from Getulio Vargas Foundation (FGV).