Apr-2025

Hydrogen-rich gasoline offers an alternative to high octane costs

A new route to meeting octane releases the current reliance on catalytic reforming while striving to minimise aromatics and olefins in gasoline.

John Burger and Don Byrne HRC Fuels
George Hoekstra Hoekstra Trading

Article Summary

For 15 years, there has been a bull market in octane in the US. Figure 1 shows how the US average pump price differential between premium and regular gasoline soared from $0.20 a gallon (where it had been for decades) to $0.88 per gallon today.

The octane bull market is more than coincidental with the  US Environmental Protection Agency’s (EPA) gasoline sulphur reduction efforts:
· Tier 2: From a 260 ppm average to a 30 ppm limit phasing in 2004-2006.
· Tier 3: From a 30 ppm limit to a 10 ppm limit phasing 2014-2020.

Full implementation of Tier 3 regulations resulted in a 10-fold increase in the price of Tier 3 gasoline sulphur credits between 2022 and 2023. The Tier 3 sulphur limit makes it more costly to retain high-octane olefins, forcing refiners to push naphtha reformers to make more octane.

Other factors also drive the bull market in octane because it occurs during a time of bearish sentiment about gasoline and octane, predicating the need for a new route to meet octane demand using a technical innovation called hydrogen-rich content (HRC) gasoline. Four US refineries have taken steps toward commercialising HRC gasoline technology, with one partially implementing it in its current operation. Four other refineries are actively engaged in pre-commercial evaluations.

Octane’s journey
The octane of gasoline can be increased by rearranging molecules in the gasoline boiling range, adding high-octane blendstocks like ethanol, and/or adding octane-enhancing additives. Octane’s phase 1 was the leaded era, which lasted until the mid-1970s, when the US refinery-produced gasoline pool averaged 78 octane, and the octane additive tetra-ethyl lead contributed 11 octane units to make an 89 octane finished gasoline pool.

With lead phase-out, the unleaded era began. By 1988, tetra-ethyl lead was gone, and refineries used a higher cost molecular rearrangement strategy, which delivered all the 88 octane units required by the finished gasoline pool directly from the refinery. That was accomplished by changing two major refining processes: catalytic reforming and fluid catalytic cracking (FCC).

Catalytic reformers were pushed harder to make more aromatics – by raising the rate and severity. This had the desired effect of making more aromatics but at the cost of lower yield and shorter run lengths. FCC unit catalyst vendors tweaked catalyst formulations to achieve higher gasoline yields and more olefins (higher octane). These changes increased octane availability by increasing the aromaticity and olefinicity of gasoline, with some increase in refining cost.

In the early 1990s, the need to reduce urban air pollution (particularly smog and ozone) ushered in the clean fuels era. For gasoline, this meant the production of low-sulphur, low-volatility refined gasoline accompanied by the use of several oxygen-containing octane additives, including ethanol. The octane boost from these oxygenates allowed the production of a lower-octane refined gasoline called ‘BOB’ (blendstock for oxygenate blending), which reduced the demand for refinery-produced octane gallons.

Low volatility specifications have been effective controls and adopted nationwide. Tier 3 sulphur average limits of 10 ppm sulphur in gasoline are designed to improve catalytic converter performance and further reduce NOx, CO, and particulate tailpipe emissions. To comply, refiners had to choose between significant investments in new processes (FCC feed pretreatment to reduce catalytic gasoline sulphur or direct hydrotreating of catalytic gasoline) or to rely on buying sulphur credits to make the average limits of 10 ppm sulphur in gasoline. As previously stated, the cost of these credits has increased drastically, much like the retail value of octane shown in Figure 1.

Starting in 2005, a series of federal and state renewable fuels standards were passed, requiring the blending of 10% ethanol. This was the beginning of the renewable fuels era. Ethanol has emerged as the (renewable) oxygenate of choice, with 10% ethanol mandatory in all US gasoline. As currently blended, ethanol contributes three octane units, with refineries contributing 85 octane units to create an 88-octane finished gasoline pool.

Remarkably, during this 50-year period of continuous reinvention of the composition of gasoline, the average finished gasoline pool octane stayed almost constant at 89 plus or minus 1, which is what the world demands.

Challenges
Slow progress is being made in the renewable fuels era. The clear intent is to reduce CO2 emissions. While hydrocarbon renewables are making headway in the distillate fuel arena, significant volumes of hydrocarbon renewables in the gasoline boiling range have not yet arrived. Burning gasoline in internal combustion engines accounts for more than 30% of the CO2 generated by fossil fuel combustion for transportation. Let us summarise the current situation:
- Ethanol is here to stay, as E10, E15, E20 or even E85. It is the only renewable gasoline blendstock of significant volume. While E10 and E15 are drop-in gasolines, E85 is not.
- The small volume of renewable naphtha produced as a by-product of renewable distillate plants is increasing, but its low octane further strains a high-cost octane market.
- There is a tremendous need for better, lower cost, environmentally friendly drop-in gasoline in the US. The promise of 100% zero-emission vehicle (ZEV) new car production by 2035 is a challenging goal, but it appears to be receding into the future.

The average age of vehicles on the road today means that the US gasoline-powered light vehicle inventory in 2050 will be at least 50% of what it is today. To make a difference in CO₂ emissions, those cars need to run on a drop-in gasoline that is different from what we are making today.

The current refining strategy is to retain olefins in FCC gasoline (to the extent possible in a Tier 3 sulphur-in-gasoline world) and generate the remaining octane through catalytic reforming to make light aromatics from paraffins.