Renewables: four options for greater market share and profitability
The refineries industry is facing profound changes. In the EU, RED (Renewable Energy Directive) requires member countries to meet at least 10% of their transport fuels with renewable sources by 2020. In the US, RFS2 (Renewable Fuel Standard 2) requires refineries to blend 36 billion gallons of renewable fuel into the country's total transportation fuels consumption by 2022.
If your business is based outside Europe or the US, there is no need to feel left out. Legislation will be on the way. Because wherever there is a need for on-spec transport fuel, there will be accompanying legislation to limit emissions and reduce reliance on non-renewable feedstocks just around the corner.
That might sound like a major challenge for the industry. And an expensive one. However, the news is not all bad. Far from it.
Meet the challenge. Take the opportunity.
The new legislation is creating greater market demand for renewable fuels. Those refineries who expand their operations to embrace a wider range of feedstocks will not only increase market share, but will also future-proof their business. Best of all, processes for refining renewable and fossil feedstocks can run alongside each other. In effect, refineries would be adding greater diversity and capacity to their operations and, ultimately, an opportunity for business growth.
But, exactly how complex is it to process renewable feedstocks into fuel? And how profitable?
From R&D to commercialization
While it’s true that processing a large, diverse range of feedstocks introduces greater complexity, the technologies involved are well understood. Topsoe invests 9% of annual turnover in R&D. And since 2004, when market forecasts first suggested that sustainability would become a major market driver, a good deal of this investment has funded research into processing renewables.
Since 2010, this research has enabled several successful commercial projects, including a renewable diesel refinery for Preem in Sweden, which helped rebrand the company as the nation’s go-to supplier of green diesel, and Sky NRG in the Netherlands, who are leading the way with competitive renewable jet fuel which meets all EU legislative demands.
The greater the divergence, the bigger the differences
Although the processes for non-renewable and renewable feedstocks can run alongside each other, they have some significant differences. In fact, the greater the divergence from conventional feedstocks, the greater are the differences – and the more complex the processes. So, before you set your level of ambition, you’ll need to look at local supply (feedstock availability and quality) and demand (balancing legislation with market trends).
Once you have established a clear view of the market conditions specific to your region, there are four big factors to consider:
- Target product
EN590 diesel will make fewer demands on the design of an existing plant than jet fuel, but will have fewer market applications and so provide limited opportunity for growth. For example, in the EU, EN590 diesel would be ideal for blending with fossil fuels to meet the basic requirements of the RED II legislation.
- Feedstock types
Of course the feedstock itself is important because some types require much more processing than others. But it’s also crucial to identify a reliable supply, know the contaminant level and how much corrosion you are going to have to counteract.
- Processing technicalities
You need to consider the cycle length and the optimal catalysts to get the highest yield from the process.
- Hydrogen availability
Processing renewables requires more hydrogen than fossil feedstocks do, so you need a reliable, plentiful supply to ensure success.
Our work on renewables has made one thing abundantly clear: there is no one-size-fits-all solution. However, with the need for flexibility first and foremost in our approach from the outset, we have mapped out four options for existing refineries looking to process renewable feedstocks into on-spec transportation fuel:
- Minimum impact
Taking a co-processing approach that requires loading specialized Topsoe catalysts without the need for a rebuild, you will be able to meet the minimum requirements for the latest legislation. In short, this is your licence to play in the field, at least in the US.
- Minimal revamp
In addition to loading new catalysts into an existing reactor, you might also need to add new reactor internals. This provides you with the ability to co-process renewable feedstocks in greater quantity.
- Revamp
To process large amounts of renewable feedstocks, whether co-processing or 100% renewable, you can revamp a hydroprocessing unit. This will enable you to take advantage of upgrading a unit from fossil to renewable service.
- Grassroot
If you want full feedstock flexibility and you have the available space, you can build a new unit with a layout tailored to processing any kind of renewable feedstock. While this requires a significantly bigger investment, it is also the way to future-proof your refinery business against legislation which will promises to get increasingly tighter over the foreseeable future.
No matter which option makes the most sense to you and your business, we have the solution: HydroFlex™. In fact, at time of writing, we have implemented all four options that make up our HydroFlex™ solution several times. And we are the only company that has multiple commercial renewables projects up and running in refineries all over the world.
Right from the outset
Your first step into renewables is to choose the option that makes the most sense for your business. With proven layouts for producing diesel, jet fuel and a flexible combination of the two, Topsoe can help you make the right choice. And with a track record of working with refineries worldwide, we will go the extra mile to run a renewables project which results in greater market share and profitability for your refinery business.
