Sep-2024

Future-proofing Indian refineries: Strategies for cost-effective decarbonisation (RI 2024)

In the face of global climate change and increasing environmental regulations, Indian refineries must adopt innovative strategies to reduce carbon emissions and ensure long-term sustainability.

Raju Chopra
Topsoe

Article Summary

As India strives towards net-zero emissions, refineries have a crucial role to play in this transition. This article explores three main strategies that Indian refineries can consider optimisation of current operations, including emission-sensitive petrochemical expansion, diversification into decarbonisation opportunities, and exploration into the production of green fuels. These approaches offer practical, cost-effective solutions that can help refineries navigate in what is frequently a tight investment environment while minimising business risks and ensuring sustainable growth in this fast-growing world.

In July 2023, India’s oil refining capacity reached 253.92 million metric tons per annum (MMTPA), making it the second-largest refiner in Asia. Through the private sector-led growth, there was a refinery capacity addition of almost 90 million metric tons in 2022. These numbers underscore the growth and significance of India’s refining industry. However, they also mean that cost-effective and simple methods of decarbonisation can have a significant impact on the environment and can point the way towards future-proofed and economically profitable operations.

Optimisation in current operations
Energy efficiency is a fundamental aspect of reducing carbon emissions and is often a low-hanging fruit for Indian refineries. Refineries can adopt various schemes to enhance energy efficiency, such as implementing heat recovery systems that can significantly reduce energy consumption. By capturing and reusing waste heat from processes, refineries can lower their energy requirements and emissions. Reducing fuel usage and process losses can lead to substantial energy savings. This involves optimising combustion processes, improving insulation, and minimising flaring.

Transitioning from steam to electric drivers for pumps and compressors and/or the addition of power recovery turbines and usage of electric heaters are prime examples of how refineries can enhance efficiency and reduce emissions. Electric drivers are often more efficient and have lower maintenance costs, so benefits in terms of emission reductions and reduced costs are achievable. Usage of advanced process controls for major equipment, such as furnaces, reactors, columns, large pumps, and compressors, can also deliver benefits.

Catalysts play a vital role in refining processes, and using the latest generation catalysts can optimise operations. Advanced catalysts can improve hydrogen utilisation, which is crucial for desulphurisation and other processes. Optimising hydrogen usage reduces the need for additional hydrogen production, thus lowering emissions. Modern catalysts can operate efficiently at lower pressures and temperatures, reducing energy consumption. New catalysts allow refineries to process a wider range of opportunity crudes, including those with higher impurities, without compromising efficiency or increasing emissions.

The third straightforward tool available when it comes to operational optimisation and emission reductions is the upgrading of refinery hardware. Enhancing reactor internals can improve mass transfer and reaction rates, leading to higher efficiency. Installing high-efficiency column trays, packings, and special types of heat exchangers can recover additional heat from high-temperature streams and special types of reboilers, further improving energy efficiency.

As one of the only countries expected to experience refinery growth in the coming years – driven in a large part by petrochemical diversification – Indian refineries will need to be a focus on using technologies to ensure that emissions are minimised.

Diversification of operations
As the demand for sustainable aviation fuel (SAF) continues to rise, refineries are seeking ways to transition into renewable refineries. While this transformation typically requires significant financial investment and time, co-processing offers a simpler, cost-effective alternative. By introducing renewable feedstocks directly into existing diesel hydrotreaters, refineries can produce a combination of renewable and fossil diesel, reducing CO₂ emissions from fossil-based feedstocks.

The cost of converting a conventional refinery into an SAF/hydrotreated vegetable oil (HVO) facility through co-processing can vary significantly depending on several factors. These factors include excess hydrogen availability, current refinery infrastructure, logistics for acquiring and storing renewable fuels, refinery layout, and utilisation rate. In some cases, by leveraging existing infrastructure and making minor modifications, refineries can start producing SAF quickly and efficiently.

For example, a conventional refinery with a kerosene hydrotreater unit operating at moderate pressure, sufficient catalyst volume, and excess hydrogen supply, may require only a change of catalysts (hydrodeoxygenation and dewaxing catalysts) for co-processing up to 5% volume. In this scenario, the production of SAF can be achieved with minor Capex (capital expenditure) investment and no revamp or minor revamp of the kerosene hydrotreater.

Additionally, utilising biogas as a feedstock in hydrogen production can reduce the carbon footprint of hydrogen production in plants. Biogas is a renewable resource, and its use in hydrogen production can help lower overall emissions.

Finally, the implementation of carbon reduction technologies, such as carbon capture and storage (CCS), can be a method for refineries aiming to lower their carbon footprint. CCS technology captures carbon dioxide (CO₂) emissions from industrial processes and stores them underground, preventing their release into the atmosphere. Refineries can integrate CCS to significantly cut their carbon emissions.

It is also worth noting that India currently has ethanol blending and biodiesel blending policies in place to decarbonise its fuel mix, but refiners need new ethanol production plants to meet these targets. However, this approach does not help refiners decarbonise their existing assets, which can only be achieved through co-processing, revamping existing units to process bio-feedstocks, or implementing carbon capture technologies.

Exploring Production of Green Products
Refineries can also explore diversification into green hydrogen, produced using electrolysis powered by renewable energy. This zero-emissions hydrogen can be used in various refining processes, replacing conventional hydrogen produced from fossil fuels. Most refiners have already planned to install small-scale green hydrogen production units.

As touched upon above, SAF is crucial for decarbonising the aviation sector. Producing eSAF involves capturing CO₂ from biogenic sources, such as biomass, and converting it into aviation fuel. The SAF market is primed for significant growth. In 2023, SAF volumes doubled to more than 600 million litres (0.5 Mt), and in 2024 production is expected to triple to 1.875 billion litres (1.5 Mt). This is still only 0.53% of aviation’s fuel need, and 6% of renewable fuel capacity. The HEFA route for SAF production is seen as the cheapest and most readily available route, with alcohol-to-jet another attractive option given the future availability of ethanol. One of the important pathways to grow production of SAF over the short-to-medium timeline will be eSAF, with production expected to ramp up over the next decade to meet global demand.

This short article originally appeared in the 2024 Refining India Newspaper, which you can VIEW HERE