Cost-efficient measures in the oil refinery and petrochemical sectors for the reduction of CO2 emissions under the Paris Agreement and air pollution under the MARPOL Convention

Abstract

Petroleum products are produced as co-products of crude oil, and several kinds of petrochemical products are produced through petroleum-related products, where huge and complex supply chains exist. The International Maritime Organization (IMO) developed plans for reductions in air pollution in the international bunker under the International Convention for the Prevention of Pollution from Ships (MARPOL) Convention, as well as requests for CO2 emission reductions under the Paris Agreement. In addition, automobiles are expected to reduce energy consumption and switch fuel sources from oil to electricity or hydrogen, for example. From the energy supply perspective, technological developments in hydrogen, biorefinery, and Carbon dioxide Capture and Utilization (CCU) are in progress, as well as the increasing trend for shale gas. This study consistently analyzes measures in the oil refinery and petrochemical sectors by using a global energy systems model considering these complex conditions. The SOx and NOx emission regulations by the IMO will have a large impact, and the additional global costs are estimated to be about 7–9 billion and 13-14 billion US$2000/year in the years 2030 and 2050, respectively. However, the long-term CO2 emission reduction constraints under the Paris Agreement will have much larger impacts on the oil refinery and petrochemical sectors, particularly after the middle of the 21st Century, and the impacts of SOx and NOx regulations will be relatively small. In order to meet the SOx and NOx regulations by the IMO, the countermeasures both of using high sulfur fuel oil with installing scrubbers etc. and switching to low sulfur fuel oil are cost-efficient. In the long term, liquified natural gas (LNG) and hydrogen, which also contribute to CO2 emission reductions, can be cost-efficient too.