Bridging differences and fostering collaboration

The downstream sector serves as a linchpin in the energy value chain, responsible for producing and supplying essential commodities like LPG, liquid fuels, solid fuels, petrochemicals, polymers, lubes, and greases. Moreover, it extends its reach into specialty chemicals and fine chemistry, further emphasising its vital role in supporting diverse industries and applications.

The aftermath of COP28, with its directive to move away from fossil fuels, has sparked numerous questions, debates, and divergent viewpoints. However, amidst the uncertainty, one consensus emerges: the transition to renewable energy cannot occur overnight or in a brief timeframe, even with a concerted global effort. This reality underscores the significance of the term ‘energy transition’, aptly capturing the complex and ongoing process that the industry is currently navigating.

The expansion of EVs: threat or opportunity?

Amidst the industry’s quest to maintain relevance and profitability in the mid to long-term, the proliferation of electric vehicles (EVs) poses both challenges and opportunities. As developments unfold, it is becoming increasingly evident that the growth of the EV fleet, coupled with advancements in electric grid infrastructure, is inevitable. With more EVs hitting the roads, downstream companies are strategically investing in charge station infrastructure, often integrating them with existing retail assets.

In Europe, this paradigm shift necessitates a reduction in conventional downstream capacities, with a shift towards the majority of development projects focusing on the conversion to renewable liquid fuels production. This transition extends to both gasoline and diesel pools, as well as the production of renewable chemicals. In the gasoline pool, the incorporation of renewable alcohols such as bio-ethanol and bio-methanol offers a promising avenue for diversification. Derived from various bio-sourced feedstocks, these alcohols boast significantly lower emissions profiles compared to conventional counterparts. Dehydrated ethanol serves as a particularly favourable component in blends, with the percentage depending on the specific settings of internal combustion engine (ICE) vehicles. Furthermore, the mature production route of methanol-to-gasoline has garnered increased interest, extending to methanol-to-jet fuel options for sustainable aviation fuel (SAF) compliance. Ethers such as ethyl tert-butyl ether (ETBE) and methyl tert-butyl ether (MTBE) derived from bio-feedstocks represent another avenue in the transition towards a future of renewable and lower carbon liquid fuels.

For the diesel fuel pool, the prevailing option entails the latest generation of hydrotreating renewable vegetable oils. This process yields a drop-in product suitable for either 100% usage or blending with conventional diesel, presenting great temperature and lubricity parameters. However, the sourcing of feedstock for this pathway may raise concerns about potential competition with food production, necessitating a thorough examination from various perspectives to ensure the long-term supply is secured in a socially responsible manner.

Renewable chemicals and biofuels

In the realm of renewable chemicals, polymers derived from such feedstocks emerge as a favoured choice. Bio-ethylene, produced through the dehydration process of bio-ethanol, stands out in this regard. The bio-ethylene can be further polymerised according to technology and market demands, offering versatile applications across various industries.

Technologies for utilising diverse feedstocks are gaining traction, with an increasing emphasis on socially responsible practices that prioritise feedstocks not in competition with food crops. Biomass, the oldest source of fuel energy, has experienced a significant uptick in its utilisation for producing transportation fuels over the past decade, offering the advantage of renewable solid carbon sourcing.

Biofuels can be categorised into two main groups based on the feedstock used in production. The first category includes biofuels derived from edible crops like sugarcane, starch plants, and oils, while the second category comprises biofuels produced from feedstock that does not directly compete with food and feed crops. This includes bio-sourced wastes, agricultural residues, non-food crops, algae, and other organic biomass sources.

Power-to-X

Shifting focus to the Middle East reveals additional opportunities tailored to the region’s unique characteristics. With a scarcity of anthropogenic carbon waste and abundant sun and wind resources, the Middle East is well-positioned for Power-to-X (PtX) production routes of the energy transition journey. Leveraging the well-established Fischer-Tropsch synthesis, these routes hold promise for sustainable energy generation. Furthermore, the region is at the forefront of the hydrogen revolution, with numerous projects underway for green hydrogen production. Despite concerns regarding water scarcity, the abundance of ocean water mitigates this challenge. The cost of desalination, estimated at just 1% of the overall production price of green hydrogen through electrolysis of water, proves negligible, further enhancing the viability of these initiatives.

This article was originally published in the July 2024 issue of Hydrocarbon Engineering magazine. To read the full article, sign in or register for a free subscription.

Written by Miro Cakov, Euro Petroleum Consultants (EPC), Bulgaria.

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/10072024/bridging-differences-and-fostering-collaboration/