Addressing Emissions in Petrochemical Value Chain

Although crucial for various products, the refining and petrochemical industries contribute significantly to greenhouse gas emissions. Reducing oil and gas demand and addressing operational emissions are key to decarbonizing these industries.

FREMONT, CA: The refining and petrochemical industries are crucial in converting crude oil and natural gas into essential products such as fuels, plastics, pharmaceuticals, and more. However, the emissions associated with these industries have been largely overlooked, despite their significant contribution to greenhouse gas emissions.

The following explores the emissions-intensive nature of the refining and petrochemical sectors, the challenges in quantifying emissions across the value chain, and the strategies required to decarbonize these industries.

Understanding the emissions intensity: End-use combustion of gasoline and jet fuel is widely recognized as a major source of emissions from oil and gas. However, the refining and petrochemical processes are highly emissions-intensive but often overlooked. In the United States, these industries emit the CO₂ equivalent (CO₂e) of 100 new coal-fired power plants annually. They are not subject to the same emissions standards as the power sector. This lack of regulation has led to an increasing amount of CO₂e being released into the atmosphere, exacerbating climate change and posing health risks to nearby communities. The refining and petrochemical industries encompass many production pathways and highly technical processes, making it difficult to accurately quantify emissions across the value chain. Producing petroleum-derived products involves multiple steps and diverse products, further complicating decarbonization efforts.

Decarbonization strategies: The most effective approach to decarbonizing the refining and petrochemical industries is to reduce oil and gas demand across various sectors. This can be achieved through technological advancements, policy interventions, and regulatory measures. While the rise of electric vehicles is expected to reduce petroleum-based transport fuel demand, efforts should also focus on reducing consumption in other segments.

Addressing operational emissions (Scope 1 and Scope 2) is a priority. Key areas for immediate action include data collection and transparency, operational improvements, and production route adjustments. Enhancing data transparency, particularly in the petrochemical industry, is vital for understanding the extent of the emissions problem and identifying decarbonization opportunities. Operational improvements such as electrification of equipment and increasing the use of renewable power can significantly reduce emissions. Production route adjustments like switching to lower-emission feedstocks can also yield immediate emissions reductions.

The industry must act swiftly in implementing decarbonization measures. Shifting to lower emissions intensity routes can lead to substantial reductions. For example, if half of the coal-based ammonia production were switched to a gas feedstock, ammonia emissions would decrease by 15 percent. The focus should extend beyond the United States, as emerging markets project rapid growth in the petrochemical sector, potentially relying on emissions-intensive fuel sources and feedstocks.