Almost 1% of global CO2 comes from distillation to separate crude oil fractions at refineries. An alternative is to separate these fractions using precisely engineered polymer membranes, eliminating 50-80% of the costs and 97% of the CO2. We reviewed 1,000 patents, including a major breakthrough in 2020, which takes the technology to TRL5. Refinery membranes also comprise the bottom of the hydrogen cost curve. This 14-page note presents the opportunity and leading companies.
The CO2 intensity of refining and the need for economic decarbonization of the sector are quantified on pages 2-4. The discussion focuses upon the CO2 intensity of distillation, including the thermodynamics and costs.
The opportunity to use membranes in lieu of conventional distillation is presented on pages 5-6. We draw on economic models to present respective costs and CO2 intensities of membrane processes.
Hence we screened 1,000 patents to identify leading companies exploring refinery membranes. The findings are presented on pages 7-8. There are three key reasons why the technology has been slow to gain traction.
The most active patent filer in refinery membranes is profiled on page 9, a publicly listed conglomerate with headquarters in the US.
ExxonMobil has made a breakthrough in 2020, deriving permeate streams from a synthetic polymer membrane that resemble the output from a distillation column. We have reviewed the technical disclosures on pages 10-13, highlighting the commercial opportunity and remaining challenges.
Membranes can also unlock the lowest cost hydrogen in the world, recovering hydrogen that is currently wasted or purged in the effluent streams from refinery units. An industry leading example of this technology is explored on page 14.
Refining has the highest carbon footprint in global energy. Next-generation catalysts are the best opportunity for improvement: uniquely, they could cut refineries’ CO2 by 15-30%, while also uplifting margins, which get obliterated by other decarbonisation approaches. Catalyst science is undergoing a digitally driven transformation. Hence this 25-page note outlines a new ESG opportunity around refining catalyst technologies. Industry leaders are also identified.
Pages 2-3 outline the need to decarbonise the refining industry, in order to clean up the world’s future oil production and preserve access to capital.
Pages 4-6 decompose the sources of CO2 emissions across a typical refinery, process-by-process; as a function of heat, utilities and hydrogen.
Page 7-8 outline small opportunities to improve refinery CO2 intensities, via continued process enhancements, changing crude slates and renewable energy.
Page 9 finds green hydrogen can reduce CO2 emissions by c7-15%, but economics are unfavorable, obliterating refining margins.
Pages 10-12 models the costs of post-combustion carbon capture, which could cut CO2 intensities by 25-90%, but also risks cutting margins by $2-4/bbl.
Pages 13-14 present the opportunity for better catalysts, identifying which Energy Majors have the leading refining technologies, based on patent filings.
Pages 15-17 outline the most promising, emerging catalyst technologies from 50 patents we studied. They can reduce refinery CO2 intensities by 5kg/bbl.
Pages 18-21 highlight breakthrough, digital technologies to improve the development of new catalysts, including super-computing and machine learning techniques.
Pages 23-24 screen 35 leading catalyst companies, including Super-Majors, chemicals companies and earlier-stage pure-plays.
What will happen to oil refineries during the energy transition? On our numbers, liquid oil products will be needed past 2100, long after demand plateaus in the 2020s. Cleaner, more efficient technologies are therefore required in the downstream sector. This note considers whether refineries could increasingly be converted to bio-refineries.
Our evidence comes from the patent literature, as we have reviewed 3,000 patents from the leading 25 Energy Majors. 8% are focused on new energies (chart below, full details in our deep-dive note). Eni screens as the leader for converting refineries to bio-refineries, hence this note summarises its relevant patents on the topic.
Historical Context. Use of vegetable oils in diesel engines goes back to Rudolf Diesel, who, in 1900, ran an engine on peanut oil. Palm oil and peanut oil were both used as military diesel in Africa in WWII. However, vegetable fuels were abandoned due to high costs and inconsistent quality, compared with petroleum fuels.
Today’s vegetable oil fuel-blending components primarily contain Fatty Acid Methyl Esters (FAME). However, they cannot be blended beyond c7% without causing problems in auto engines. For example, FAME has a low energy content (38kJ/kg vs diesel at 45kJ/kg), a -5 – 15C cloud point, causes pollution in tanks, polymerises to form rubbers, causes fouling, dirties filters and contaminates lubricants.
Regulation is nevertheless stoking demand for more dio-diesel, going beyond the 7% threshold. Europe Directive 2009/28/C mandates 10% renewable material in diesel by 2020, up from 5% in 2014.
Eni is therefore converting refineries to bio-refineries, to upgrade renewable materials into “green diesel”. A 0.36MTpa facility started up at Porto Marghera, Venice in 2014. A larger, 0.7MTpa facility started at Gela in 2019. Both convert vegetable oils into diesel.
Patents indicate how they work. The starting point is a conventional oil refinery, with two sequential hydro-desulfurization units. For the conversion into a bio-refinery. these units are re-vamped into a hydrodeoxygenation reactor (HDO) and a subsequent hydro-isomerization reactor (ISO), shown in the schematic below.
HDO occurs in the presence of hydrogen, a sulfided hydrogenation catalyst from Group VIII or VIB metals, at 25-70 bar and 240-450C.
ISO occurs at 250-450C, 25-70bar and a Metal (Pt, Pd, Ni) Acid catalyst on an alumino-silica zeolite framework.
Upstream modifications. Pre-treatment processes, surge drums and heat-exchangers are installed upstream of each reactor.
Downstream modifications. The output products from the reactors will contain 1-5% H2S, which is removed in an acid gas treatment unit, and then a Claus unit for sulphur recovery; both reached via new connection lines.
The main advantage of this process is cost, which is said to be 80% lower than constructing a new facility. For example, the Porto Marghera project was budgeted at €200M. In its patents, Eni states: “This method is of particular interest within the current economic context which envisages a reduction in the demand for oil products and refinery margins”.
Further advantages are that the produced diesel has excellent properties, including a high octane index, optimum cold properties, high calorific value and a further by-product stream of commercial LPGs. Moreover, the efficiency of the converted facility is seen to be similar to one constructed anew.
The disadvantage is that blending of free fatty acids is limited to c20%. This is why the bio-refineries so far intake 80% palm oil (which contain <0.1% free fatty acids). Eni states: “The reactor used for effecting the HDO step, deriving, through the method of the present invention, from a pre-existing hydrodesulfurization unit, may not have a metallurgy suitable for guaranteeing its use in the presence of high concentrations of free fatty acids in the feedstock consisting of a mixture of vegetable oils. The reactors of the HDO/ISO units specifically constructed for this purpose, are in fact made of stainless steel (316 SS, 317 SS), to allow them to treat contents of free fatty acids of up to 20% by weight of the feedstock”. Processing a broader range of vegetable oils and other waste oils would require a more costly refinery re-vamp.
Further challenges are that the production of hydrogen and other industrial above will be energy intensive. Moreover, Eni’s 1MTpa of green diesel production capacity is only equivalent to c20kbpd of fuel. It will be challenging to source sufficient feedstocks to scale bio-refineries up to meet larger portions of the world’s overall fuel needs.
Our conclusion is therefore that bio-refineries have potential when re-purposing existing downstream facilities, preserving value in the very long-term future of the industry. However, further technological improvements are required before these facilities can scale up or deliver material, and truly decarbonised hydrocarbons. Out of Eni’s other refining patents, we are most positive on Eni Slurry Technology, which is a leading technology for IMO2020 (chart below). For details of other technology leaders in energy, please see our note, Patent Leaders.
Source: Rispoli, G., F. & Prati, C. (2018). Method for Re-Vamping a Conventional Mineral Oils Refinery to a Bio-Refinery. US Patent US2018079967.