3.6.1 Structure and economic contribution
The petroleum refineries sector contributed to 0.8% of the EU’s GDP in 2011.106 Key economic contributions are delivered by 2 key groups: manufacture of coke oven products (NACE C19.1) and refined petroleum products (NACE C19.2). Key economic indicators for the petroleum refineries sector are summarised in Table 3.53.
Table 3.53 Key economic indicators per sector and subsector for EU 28 in 2011
Description
NACE (Group)
Number of enterprises
[n]
No. of persons employed
[n]
Turnover [mil EUR]
Value added [mil EUR]
Productio n value [mil EUR]
Manufacture of coke and refined petroleum products
C19 412 36,641 118,891 2,822 96,743
Manufacture of coke oven products
C19.1 41 5,127 2,835 294 2,121
Manufacture of refined petroleum products
C19.2 371 31,514 116,056 2,528 94,621
Source: EUROSTAT, accessed Apr 2014
The sector has over 400 enterprises in the EU generating nearly €97 billion of revenues.
Refined petroleum products (C19.1) are the largest subsector, accounting for nearly 98% of total sector revenues.
The coking subsector is heavily concentrated in Poland, which accounted for more than two thirds of the total EU value added and close to three fifths of the workforce. In 2012 there were 83 mainstream petroleum refineries in the EU, with 703.2 million tonnes of primary refining capacity.107 Germany, Italy, UK, France, Spain and the Netherlands account for over 70% of total EU refining capacity.
3.6.2 Subsector share of energy consumption
Table 3.54 provides an estimated overview of the share of energy consumption between the subsectors in EU28 based on EUROSTAT statistics. The manufacture of petroleum products accounts for 92% of the energy use in the sector.
Table 3.54 Estimated EU28 subsector share energy demand in 2011
Sector Description NACE
(Group) Category
Estimated share of final energy demand
[kTOE] [%]
Manufacture of coke oven products C19.1 Energy intensive
4081 8%
Manufacture of refined petroleum products
C19.2 Energy intensive
47,948 92%
Total final energy demand for petroleum refineries sector for EU28 (2011):
52,028 100%
Source: EUROSTAT, accessed on Apr 20114
106 Energy, transport and environment indicators; Eurostat; 2013
107 Concawe; 2013; Oil refining in the EU in 2020; with perspectives to 2030
113 3.6.3 Key products
3.6.3.1 Coke (NACE 19.1)
About 90% of the coke consumed in the EU is used in the production of iron from blast oven furnaces. The remainder is used in iron foundries, non-ferrous smelters, and the chemical industry. Since 1990’s, production has been declining, with capacity closures at their peak in 2009-10 due to low commodity prices, with China now accounting for over 70% of global coke production.108 Furthermore, despite coke being important to the iron production process, to increase cost effectiveness steel-makers are adopting new technologies that aim at reducing the quantity of coke required. For example, injecting pulverised coal, waste plastic, natural gas or oil directly injected in blast furnaces rather than in the coke oven.
Coke is produced by processing low-ash low sulphur bituminous coal. Pulverised coal is heated in a coke oven, in the absence of oxygen, at high temperatures (1200-1300°C). The necessary heat is provided by external combustion of fuels and recovered gases. Coke is the solid material remaining in the oven. There are approximately 1,900 coke oven installations in the EU.109
3.6.3.2 Refined petroleum products (NACE 19.2)
Refined petroleum products are derived from crude oils through processes such as catalytic cracking and fractional distillation. The type of crude oil a refinery can process depends on the processing units operated (i.e., complexity) as well as the desired product slate. All refineries have crude oil fractional distillation, where crude oil is distilled into a number of fractions; e.g., petroleum gases, light and heavy naphtha, asphalts and residue. However, depending on the level of the refinery’s complexity, these fractions can be upgraded to commercially viable products through additional processes; such as hydrodesulphurization and hydrotreating to produce fuels with reduced sulphur content; catalytic cracking for higher yields of kerosene and gasoline; and catalytic reforming to increase the octane number of the gasoline.
In 2012, there were 83 petroleum refineries in EU-28.110 Of these, approximately half of Member States have “complex” refineries, with the remainder considered “simple”.111 The level of complexity defines whether a refiner can effectively respond to changes in product supply and demand by shifting its product slate. For example, refineries may produce more gasoline during the spring and summer months when demand is high, than they do during the winter when demand for heating oil is high.
3.6.4 Energy metrics
3.6.4.1 Energy intensity based on sector energy cost
Table 3.55 provides an indication of the sector’s energy intensity for selected EU Member States expressed in 2 ratios112 from 2008 - 2012. The petroleum refinery sector is the most energy intensive sector in comparison with the 8 industrial sectors evaluated in this study in terms of energy cost spent per value added generated.
108 Jones Andrew; 2013; Coke Markets – European Perspective; Presentation at the Eurocoke conference, April 2013
109 https://www.quandl.com/c/energy/consumption-by-use-coke-ovens-un-by-country
110 Concawe; 2013; Oil refining in the EU in 2020; with perspectives to 2030
111 IEA; 2013; Recent developments in EU Refining and Product Supply; Presentation at EU Refining Forum, 12 April 2013
112 (1) Ratio of energy cost per unit of value added and (2) Ratio of energy cost per unit of turnover, i.e. the monetary value paid by manufacturers on energy products for every unit of value added or turnover generated by the sector.
114
Table 3.55 Energy cost intensity ratios per unit of VA and Turnover generated for selected MS*
Ratio 2008 2009 2010 2011 2012
1 Energy cost/ Value Added
57% 41% 28% 38% 44%
2 Energy cost/
Turnover
2% 2% 1% 1% 1%
Source: ICF analysis on EUROSTAT SBS, accessed Dec 2014
* Note: Data covers Belgium, Czech Rep, Germany, Estonia, Greece, Spain, Italy, Hungary, Netherlands, Portugal and UK
3.6.4.2 Energy intensity of key processes
The production of coke and refined petroleum products is characterised by the use of intense heat to carbonise coal (coke), or distil, crack and hydro-treat crude oil and its fractions (petroleum products). JRC (2012) estimates that the energy intensity of coking operations is 6.83 GJ/tonne (or 0.16 TOE/tonne)113.
Table 3.56 provides a summary of the energy intensities associated with the production of refined petroleum products. As illustrated, the crude distillation unit (CDU), reforming, and hydro-treatment processes account for the majority of energy consumption within a refinery (i.e., nearly 60%), and are the most energy intensive processes.
Table 3.56 Refined petroleum production energy intensity Process
Fuel114 (%)
Steam (%)
Electricity (%)
Energy intensity115
(TOE/t)
Crude distillation unit 26.2 26.2 8.5 0.015
Vacuum distillation unit 7.9 13.5 1.9 0.006
Thermal cracking 8.5 -1.1 10.1 0.003
Fluid Catalytic Cracking 7.5 0.1 15.3 0.004
Hydrocracking 4.7 3.9 12.8 0.004
Reforming 14.4 10.9 7.4 0.008
Hydrotreating 17.6 28.9 34.4 0.016
Deasphalting 1.1 0.0 0.5 0.000
Alkylation 0.9 12.9 6.1 0.004
Aromatics 0.8 0.4 0.6 0.000
Asphalt 4.1 0.0 1.6 0.001
Isomerisation 6.2 4.3 0.8 0.003
Total 100% 100% 100% 0.063
% usage 49.7% 34.1% 16.2%
Source: LBNL, 2004; CONCAWE, 2013116
113 JRC, 2012; Prospective Scenarios on Energy Efficiency and CO2 Emissions in the EU Iron & Steel Industry
114 Fuel consumption in processes includes, natural gas, petroleum products (e.g., refinery gas), waste heat, (see Figure 3.57).
115 Derived from Concawe; 2013; Oil refining in the EU in 2020; with perspectives to 2030
116 Worrel, E., and Galitsky, C., “Profile of the Petroleum Refining Industry in California,” Lab Report LBNL-55450, Lawrence Berkeley National Laboratory, Berkeley, Calif., 2004
115 3.6.4.3 Energy mix of final energy consumption for EU petroleum refineries sector
The pyrolysis of coal in the coking process requires intense heat, which is generated by gas combustion in the flues between the coke ovens. Coke oven gas, which is a product of the coking operation, is the common fuel used for firing ovens at most plants, but blast furnace gas (from a steel mill, if integrated), and natural gas are used as well.
Refineries have complicated utility systems with many different fuels, sources and users. In order to produce the required energy and hydrogen, refineries use a combination of external and internal energy sources; such as coke from fluid catalytic cracking units). Internally generated fuel is the largest energy source, which is supplemented with additional purchases of fuel (primarily natural gas), electricity and steam. Also, approximately 5-10% of the crude throughput of refineries is used for the refining process117. Figure 3.57 presents the average energy mix of final energy demand for EU petroleum refineries in 2012.
Figure 3.57 Energy mix for final energy demand of EU petroleum refineries in 2012
Source: EUROSTAT, accessed on Dec 2014 3.6.4.4 Energy end use profile
Within the processes, the furnaces/boilers, which are used for the production of power, steam and heat to support the separation processes (i.e., distillation), are the largest energy users.
Other large users are gas compressors (and air blowers) in the Fluid Catalytic Cracker (FCC), reformer, hydro-processing units. The following figures present aggregate profiles of energy use within a typical refinery.118
117 IEA (2005); The European Refinery Industry under the EU Emissions Trading Scheme: Competitiveness, trade flows
and investment implications
118 Based on ICF energy efficiency studies within the refining sector Gas 13%
Electricity 7%
TPP 75%
Other 5%
116 Figure 3.58 Electricity use profile
Source: ICF International
Figure 3.59 Natural gas use profile
Source: ICF International
Other Motors 26%
Pumps 21%
Compressed Gas/Air Systems
(Process) 13%
Fans/Blowers 10%
Compressed Air (Utilities)
9%
Cooling &
Refrigeration 8%
Furnaces/ kilns/
ovens/ dryers 5%
Lighting 5%
Steam boilers and steam
systems 2% Other
1%
Process Specific 0%
Furnaces/ kilns/
ovens/ dryers 54%
Steam boilers and steam systems
44% HVAC
1%
Other 1%
Natural Gas
117 Figure 3.60 Energy use profile for coal
Source: ICF International
Figure 3.61 Energy use profile for other sources, including renewable, biomass and waste heat
Source: ICF International
3.6.5 Projection of energy consumption trend
The following details are an extracted summary of the sector profile in Annex 1.
The petroleum refineries sector contributes coke and refined petroleum products, which contributed 0.02% and 0.8% to the EU’s GDP, respectively.119 The coke and refined petroleum products manufacturing sector is energy–intensive, with high capital costs and long investment cycles. The sector accounted for over 18% of total industrial energy consumption in 2011.120
119 Energy, transport and environment indicators; Eurostat; 2013
120 Ibid
Steam boilers and steam systems
Furnaces/ kilns/
ovens/ dryers 54%
Steam boilers and steam
systems
44% HVAC
1%
Other 1%
118 3.6.5.1 Coke production
Coke production in Europe was high in 1980s, yet since the 1990s it has been declining (ca.
-3.3%/a). Recently, production has stabilised at a typical level of around 40 million tonnes/
annum. Through most of the past decade, coke demand in Europe has exceeded
production. Europe had a net deficit of coke of 4-7 Mt per year in 2001-05, while in 2009 and 2012 they almost equalized. Utilization of capacity in Europe was around 90% until 2007, but through 2010 has been about 80-85%.121 Since 2012, coke commodity prices have been falling, as global economic growth has slowed, and increasing quantities of low priced coke from China flood the market. Between 2012 and 2013, coke prices declined by 10-15%.122 These declines in price and demand have fuelled EU capacity closures, which were at their peak during the last economic crisis (2009-10). A net decline is anticipated in the future, as no major investments are in the pipeline.123 By 2050, production is assumed to decline by nearly 60% from current levels, as cheap imports increasingly address local demand.
3.6.5.2 Refined petroleum products
In 2011, 17% of global refining capacity was based in Europe.124 Crude oil derived products will continue to play a role in the EU through 2050, although demand is likely to drastically change.125 Currently, there is too much refining capacity since most EU refineries have been primarily designed for gasoline production. With the increasing shift to diesel and cleaner fuels (e.g., biofuels); gasoline surplus, diesel deficits and tightening margins have led to increasing plant closures126. Furthermore, increased refinery capacity in overseas markets will put pressure on exports, and increase EU’s import dependence. To address some of these issues will require significant investment; on the order of $51 billion through 2020.127 Considering these issues, production is assumed to continue declining into the future at a rate of 1% per year.128 By 2050, production is assumed to be 21% below current levels.
3.6.5.3 Summary of sector projections
Overall, production in the petroleum refineries sector is assumed to decline by 23% through 2050. Table 3.57 presents the anticipated production trend for the sector.
Table 3.57 Projected trend for production of coke and refined petroleum products in EU 2011 2012 2015 2020 2025 2030 2035 2040 2045 2050 Production
(Mil tonnes)
700 700 696 685 657 625 601 580 560 540
Source: Concawe (2013); DG ENER (2011)129
The petroleum refining sector is energy and raw material intensive, with energy costs contributing to significant part of production costs (i.e., energy costs account for 60% of operating costs in refineries)130. Between 1992 and 2010, EU refiners have increased energy
121 Jones Andrew; 2013; Coke Markets – European Perspective; Presentation at the Eurocoke conference, April 2013
122 Ibid
123 Ibid
124 Europia, 2013; Annual Report 2012
125 Europia; 2011; 2030-50 Europia contribution to EU Energy Pathways to 2050
126 Between 2008 and 2013, 15% of EU refineries shut down (IEA, 2013; Recent developments in EU Refining and Product Supply; Presentation at EU Refining Forum, 12 April 2013)
127 Concawe; 2013; Oil refining in the EU in 2020; with perspectives to 2030
128 Rate of decline aligns with Concawe (2013) projections for fixed demand scenario
129 DG Ener, 2011; The Market for Solid Fuels in the European Union in 2010 and the Outlook for 2011
130 DG Ener; 2013; Summary and conclusions of the first meeting of the EU Refining Forum held on the 12th of April 2013
119 efficiency by 10%; “low hanging fruits” opportunities have been addressed. Further opportunities are present, but are assumed difficult to achieve due to not being cost- effective. Considering this, the total energy requirement of EU refineries is forecasted to decrease from 45 million TOE/annum in 2008 to 39 million TOE/annum in 2030.131 However, the energy intensity is anticipated to increase slightly from 6.3% of total feed in 2008 to 6.6%
in 2030, as more energy-intensive processing is required to satisfy the increasing demand for lighter and lower sulphur products. This trend is assumed to continue through 2050. In the coking subsector, energy intensity is assumed to remain stable through 2050; however, considering it only accounts for 8% of energy consumption, its impact on the overall trend is negligible. Table 3.58 presents the anticipated energy intensity trend through 2050.
Table 3.58 Projected energy intensity trends for production of coke and refined petroleum products (TOE/tonne of output)
2011 2012 2015 2020 2025 2030 2035 2040 2045 2050 Energy
intensity (TOE/ tonne)
0.066 0.066* 0.066 0.067 0.067 0.068 0.068 0.068 0.068 0.068
Source:Concawe data (2013)
Figure 3.62 illustrates the BAU projection trends (energy consumption and production) for the petroleum refineries sector in EU28 over the period 2012 to 2050.
Figure 3.62 BAU projection for manufacture of coke and refined petroleum products
131 Concawe; 2013; Oil refining in the EU in 2020; with perspectives to 2030
- 100 200 300 400 500 600 700 800 900 1,000
- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000
2012 2015 2020 2025 2030 2035 2040 2045 2050
Production [mil tonnes]
Energy consumption [kTOE]
120 3.6.6 Energy Saving Potential Opportunities
Figure 3.63 presents the energy consumption projections from 2011 through to 2050 under the BAU, technical and economic scenarios132 from the modelling outputs of IEEM.
Figure 3.63 Projected economic and technical potential scenario energy use for the NFM sector
A total of 99 energy saving opportunities which are technically feasible to the sector were accounted for in the modelling process. The projected savings under the technical133 potential scenario is 10.6 million TOE (25% saving) in year 2030 and 8.3 million TOE (23% saving) in year 2050 with reference to the BAU projections.
A total of 42 energy saving opportunities were included under economic scenario 1, resulting a projected saving of 1.7 million TOE (4% saving) in year 2030 and 3.1 million TOE (9%
saving) in year 2050 with reference to the BAU projections.
An additional 17 ESOs, i.e. a total of 59 ESOs, were included under economic scenario 2, resulting in a projected saving of 1.9 million TOE (4.5% saving) in year 2030 and 3.5 million TOE (10% saving) in year 2050 with reference to BAU projections. The energy saving impact of the additional ESOs in economic scenario 2 made very little impact on the additional energy saving potential, as they only accounted for 10% of the overall savings in comparison with economic scenario 1, even after considering the higher payback period. The full list of ESOs are listed in Annex 3. The list of ECOs under economic scenario 1 and 2 is presented in Annex 4.
The following ESOs listed in Table 3.59 represents approximately 71% of the overall sector’s technical saving potential.
132 The economic scenario 1 assumes an uptake of energy saving opportunities which fulfils the less than 2 year simple payback criteria, whereas the economic scenario 2 assumes an uptake of energy saving opportunities of less than 5 year simple payback.
133 Under the technical potential scenario, it is assumed that all technically feasible opportunities relevant to the sector is implemented regardless of economic feasibility.
25,000 30,000 35,000 40,000 45,000 50,000
2 0 1 1 2 0 1 5 2 0 2 0 2 0 2 5 2 0 3 0 2 0 3 5 2 0 4 0 2 0 4 5 2 0 5 0
ANNUAL ENERGY CONSUMPTION (KTOE/YR.)
BAU Consumption Technical Scenario Consumption Economic Scenario 1 Consumption Economic Scenario 2 Consumption
121 Table 3.59 Projected sector ESOs with highest technical potential
Energy saving opportunity
Description 2030
Technical potential (kTOE/a)
2050 Technical potential (kTOE/a)
% of total sector technical potential (2030 / 2050) Integrated
control system
A neural network system is an example of an integrated control system. The information of the sensors is used in control systems to adapt the process conditions, based on artificial intelligence, mathematical (“rule”-based) or neural networks and “fuzzy logic” models of the industrial process.
1044 847 10% / 10%
Improved catalyst
Catalysts are continually being improved to increase process performance and reduce energy consumption.
989 738 9% / 9%
Inter-plant Process Integration
Process integration techniques such as pinch analysis can be applied for resource
conservation. Several networks or plants may be integrated to maximize resource recovery through inter-plant integration. Requires facilities to be adjacent, and have synergies (such as utilities) which in close enough proximity to be shared.
737 475 8% / 7%
Advanced Heating and Process Control (furnace)
Advanced heating and process controls reduces energy losses by governing aspects such as material handling, heat storage and turndown.
686 522 7% / 6%
High Efficiency Burner (furnace)
These burners are more efficient at higher- temperature applications. Advancements over the recent years include the commercialization of self-recuperative and self-regenerative burners that use staged combustion to achieve flameless combustion. This results in more uniform heating, lower peak flame
temperatures, improved efficiency and lower NOx emissions.
639 447 6% / 5%
Flue-gas monitoring (furnace)
Stack thermometers, fuel meters, make-up feed water meters, oxygen analysers, run-time recorders, energy output meters, and return condensate thermometers are required to maintain a proper air-to-fuel ratio to optimize fuel combustion efficiency.
599 451 6% / 6%
Exhaust gas heat recovery
(furnace)
Exhaust gas heat recovery increases efficiency because it extracts waste energy from the exhaust gases and recycles it back to the process, which reduces fuel/steam requirements.
484 376 4% / 5%
Sub-metering and interval metering
Sub-meters are used to measure the amount of energy consumed by equipment, or portions of the plant. They communicate with a central system where the information is trended, stored or transferred to a data historian system for archiving.
424 448 4% / 5%
122 Energy saving
opportunity
Description 2030
Technical potential (kTOE/a)
2050 Technical potential (kTOE/a)
% of total sector technical potential (2030 / 2050) Advanced
Predictive Process and Maintenance Control Systems
This opportunity includes advanced refinery control systems which will use the latest predictive modelling capabilities to continuously adjust plant operations for efficient performance, and will track the performance of critical components and schedule maintenance to reduce upsets/failures causing plant shutdowns.
421 330 4% / 4%
More efficient low grade waste heat recovery technologies (emerging)
Technology is available to take advantage of even the low grade waste heat, which remains after other more efficient uses of waste heat have been exhausted. Organic Rankine Cycles can be used to produce power from heat as low as 80°C, and hence are a “new heat sink”
to utilize this waste heat.
406 364 4% / 4%
Combustion optimization (furnace)
Combustion efficiency can be improved by frequent adjusting of the air-to-fuel ratio to reduce excess air as too much excess air carries away excessive amounts of heat.
401 300 4% / 4%
Fouling
mitigation in the crude distillation preheat train and fired heater
Fouling deposited Crude Oil Distillation Units pre-heat train heat exchangers reduces energy recovery and increased energy consumption.
Replacement of heat exchangers with alternative design can improve efficiency through reduced fouling.
343 199 3% / 2%
Increased uptake of Energy Management System (EnMS)
A series of systemised interacting processes that enables an organization to obtain relevant energy information and act upon it to maintain and improve energy performance, while reducing environmental emissions as a consequence.
329 260 3% / 3%
The following sector specific Energy Saving Opportunities listed in Table 3.60 are technically feasible for the sector but unaccounted for in the economic scenarios as they did not meet the respective payback criteria.
Table 3.60 Projected technical potential sector specific ESOs Sector specific
energy saving opportunity
Description 2030
Technical potential (kTOE/a)
2050 Technical potential (kTOE/a)
% of total sector technical potential (2030 / 2050) Distillation
columns operational optimization
Distillation unit operation could be optimized to improve its energy performance. Factors which effects energy performance include reflux ratios, product purification levels and operating pressure adjustments.
135 120 1.3% / 1.4%
Cogeneration using gas turbine exhaust gas as combustion air for heating furnace
Combustion exhaust gas from the gas turbine is used as combustion air for the tubular heating furnace and recovers steam with the exhaust heat boiler from the exhaust gas of the heating furnace.
307 235 2.9% / 2.8%