Research News

The Opportunities and Barriers in Decarbonizing the Oil Refining Industry

March 24, 2022

While the oil refining industry has brought manifold benefits, it is also a major contributor to greenhouse gas emissions, and must now decarbonize its operations if the world is to ever achieve net-zero carbon emissions. 


As the world moves away from fossil fuels, all industries and sectors will need to decarbonize if targets for a future with net-zero greenhouse gas emissions are to be reached. This includes the petroleum refining industry, an industry that accounts for up to eight percent of global industrial energy consumption.


Even though populations are turning to more sustainable energy sources, demand for products derived from fossil fuels will not end overnight, particularly demand for plastic products. Hence, improving emissions from oil refineries is necessary to reduce their environmental impact as we transition to a lower-carbon future. The US petroleum refining industry, for instance, produces 198 megatonnes of carbon dioxide each year— the same amount emitted by nearly 36 million homes.


Khalifa University’s Dr. Steve Griffiths, Senior Vice President, Research and Development and Professor of Practice, collaborated with an international team of researchers to provide a systematic and critical literature review to uncover the means by which the oil refining industry can decarbonize and evolve as part of an increasingly carbon constrained future.


Team members were Dr. Benjamin Sovacool, University of Sussex, UK; Dr. Jinsoo Kim, Hanyang University, Republic of Korea; Dr. Morgan Bazilian, Colorado School of Mines, USA; and Joao Uratani, a research engineer also from Khalifa University. Their review, which was recently published in Energy Research and Social Science, is a part of a work program undertaken by the UK’s Industrial Decarbonisation Research & Innovation Centre (IDRIC). The team has already published work on decarbonization of the iron and steel, food and beverage, glass and ceramics industries as well as work on the roles of fluorinated gases (or F-gases) and hydrogen in industrial decarbonization. This work on decarbonization of the oil refining industry is closely tied to the work on hydrogen given that oil refining is currently the second largest consumer of hydrogen globally.


In this paper, the research team used a sociotechnical perspective to understand the oil refining industry and highlight key opportunities for decarbonization. These insights support policy makers, researchers, and practitioners, offering the tools needed to advance a low-carbon transition of the oil refining industry.


What is oil refining?

Crude oil is the term for unprocessed oil; petroleum in its original form after extraction from the ground. It’s the starting point for hydrocarbon products, including the gasoline for your car, kerosene, synthetic fibers, plastics, tires and even crayons. To produce these products, the crude oil must first be processed or refined.


The petroleum that comes straight out of the ground contains hundreds of different types of hydrocarbons all mixed together. These molecules contain hydrogen and carbon atoms, and come in various lengths and structures, from straight chains to branching chains, to rings. Each different chain length and structure has a different property that makes it useful in different ways.


Oil refining separates these hydrocarbons by heating the oil and separating the hydrocarbons according to the temperatures at which they vaporize. Chemical refinery processes also include operations such as cracking, which uses heat, pressure and sometime catalysts to produce a broad range of valuable refinery products from the crude oil feedstock.


“The oil refining industry has become a foundation of modern society,” Dr. Griffiths said. “It was established in the mid-19th century to refine crude oil into transportation fuels, petrochemical feedstocks, and a variety of other products that have brought manifold benefits, but it has also led to the global proliferation of greenhouse gas emissions and local air pollution. The industry faces a growing need to decarbonize its operations and to support decarbonization of the end use sectors that it directly enables.”


Energy-Intensive Refining

Oil refinery plants can vary in design and complexity but together, crude oil refining is estimated to account for about six to eight percent of all global industrial energy consumption, with this energy consumption representing up to 50 percent of the refinery’s total operating costs. All key processes within the oil refining industry are considered energy-intensive due to extensive direct heat and steam use—the boiling point for the different hydrocarbon products ranges from 40 degrees Celsius for petroleum gases used for heating, cooking and plastics, to over 600 degrees Celsius for the oils needed for asphalt and tar.


Known as ‘process heating’, this is a refinery’s main carbon emitting activity. In the US, gasoline, diesel and jet fuel account for 63 percent, 25 percent, and six percent respectively of total oil refining emissions.


Refineries that process heavier crude oils have lower energy efficiencies and higher greenhouse gas emissions compared to refineries that process lighter crudes because of the processing required to crack and treat the heavier crude oils.


“According to the IEA, an estimated 95kg of carbon dioxide is emitted in bringing an average barrel of oil to end-use consumers,” Dr. Griffiths said. “Different oil refining plants that process different oil feedstocks exhibit different emission intensities however. At the lower end, a refinery might have an average emissions intensity of less than 45kg CO2 per barrel, while at the higher end it could be in excess of 200kg per barrel.”


However, the most energy-intensive heating represents a relatively smaller fraction of overall refinery energy demand it is required for the processing of just a portion of crude volumes. Additionally, not every refinery around the world produces all petroleum products; refineries with different feedstocks will produce different hydrocarbon byproducts, and some of these byproducts can be used as energy sources for the refinery itself.


“An oil refining plant is typically capable of generating most of the energy it requires in situ via byproduct refinery gases,” Dr. Griffiths said. ‘For example, 61 percent of the energy used in the Dutch refining industry is provided by refinery fuel gases, with the other major contributor being natural gas. In the US, oil refining byproducts meet 55 percent of the energy refinery energy requirements.”


Reducing Refining’s Carbon Footprint Calls for Technology and Policy Interventions

Lessening the industry’s environmental footprint will be a challenge, especially since refineries have long lifetimes and there are few incentives to deploy new technologies that may disrupt operations or are costly to implement.


The research team organized the major approaches for decarbonization into six categories: improved energy efficiency; waste heat recovery; improved design performance; increased use of renewable energy sources; adoption of carbon capture, utilization and storage technologies; and the adoption of low-carbon hydrogen. They further consider how refineries of the future may need to be structured to cater to a changing product slate of low-carbon fuels and chemical feedstocks.


“The age of the refinery plant impacts the number of feasible low-carbon interventions, and therefore the extent of the reduction in emissions,” Dr. Griffiths said. “Geography, crude grade, and refinery type also influence the decarbonization potential.”


The most carbon-intensive refineries are those classed as ‘middle-aged’, between 40 and 64 years old, although the younger ones (less than nine years old) are also rather carbon intensive. The research team consider the younger refineries most problematic for carbon emissions though because “they will likely be operational for many decades to come unless shut down prematurely.”


“The capacity of the oil refining industry to pursue decarbonization interventions beyond those that are purely profit-driven may be limited to the financial bandwidth that companies have to explore such technologies,” Dr. Griffiths said. “In the absence of policy drivers, management resistance to decarbonization is to be expected.”


Barriers to decarbonization often require policy interventions that can be regulatory, fiscal or financial. The research team identified multiple policy mechanisms that could be implemented to decarbonize oil refining, including adopting carbon pricing mechanisms, emissions intensity targets, and financial incentives for research and development of novel decarbonization technologies.


The complex nature of the oil refining industry means that no ‘one-solution-fits-all’ approach is possible for decarbonization,” Dr. Griffiths said. “The barriers to decarbonization are technical, economic, organizational, political, and social. But despite these challenges, low-carbon interventions throughout the oil refining sociotechnical system, coupled with institutional and market drivers, can drive forward innovations that will lead to many benefits as refineries evolve to meet increasing demand for low-carbon fuels and feedstocks.”


Jade Sterling
Science Writer
24 March 2022