Emission-cost nexus optimisation and performance analysis of downstream oil supply chains

Abstract

The aim of this study is to develop a novel framework for the optimisation of downstream oil supply chains with emission-cost nexus and performance analysis. A P-graph based model has been developed to support the decisions of the distribution plan in the supply chain. This created the possibility to consider constraints, including the material balance, the sending capacity of refineries and storage depots, and the transport capacity of railways, barges and pipelines. Three scenarios, covering standard conditions, pipeline disruption, and demand increase, are analysed. The proposed novel method supports the decision-making of downstream oil supply chains and provides insight into the reduction of environmental influences. The results reveal that priority should be given to measures for reducing NOx emission (both Greenhouse and dangerous pollution gas) and the emission factors of barge transport, as this can bring great environmental benefit. When NOx emission for railways and barges is reduced by 5%, 1,435 kCNY/month could be saved. If the emission of the barges is reduced by 5%, this can save 1,289 kCNY/month of environmental cost. The proposed method is handy for analysis under non-standard conditions, such as transport facility disruption and demand increase. It would help in the design a distribution plan from a more comprehensive view, and to provide further direction for reducing the environmental footprint.