transport and fuels - a3ps...the jec biofuels programme + e10 and b10 scenario + 95g co 2 /km...

Meeting Europe’s Demand for Transport and Fuels

Kenneth D Rose

Technical Coordinator, Fuels and Emissions

7th A3PS Conference: Eco-Mobility 2012

Vienna, Austria

12th December, 2012


Kenneth D Rose, CONCAWE 2

Reproduction permitted with due acknowledgement

CONCAWE: Research in Diverse Areas

Automotive Emissions & Fuel Quality

Air Quality

Water/Soil Quality & Waste

Oil Pipelines

Safety

CONservation of

Clean

Air and

Water in

Europe

The Oil Companies’ European association for health,

safety and environment in refining and distribution

(founded in 1963)

Operating Principles:

Sound science

Cost-effectiveness of options

Transparency of results

Refinery Technology Support

Health Science

Petroleum Products

Risk Assessment

REACH & GHS Implementation




CONCAWE Member Companies

Membership open to companies owning EU refining capacity

Currently 42 Member Companies:

Members represent almost 100% of EU refining capacity

CONCAWE research mostly funded by Member Companies

INEOS IPLOM Koch KPI LOTOS LUKOIL LyondellBasell MOL Motor Oil Hellas Murco Neste Oil Nynäs OMV Phillips66

AlmaPetroli APC api BP CEPSA ENI ERG Essar Oil (UK) ExxonMobil Galp Energia Hansen & Rosenthal Hellenic Petroleum IBR INA

PKN Orlen Preem Raffinerie Heide Repsol Rompetrol SARA SARAS Shell SRD Statoil St1 Tamoil TOTAL Valero





Perspective of the European Road Transport Research Advisory Council (ERTRAC): Decarbonisation of European Road Transport

European fuel demand and imports/exports

European legislative framework

Achieving the legislative expectations for energy and GHG reductions from transportation fuel supply:

Improve the efficiency of fuel manufacturing (refining)

Replace fossil fuels with renewable fuels

Improve the efficiency of vehicles and the road transport system

Challenges for European Refining




Conclusions from a Recent JRC Report

Sustainability Assessment of Road Transport Technologies (L. Ntziachristos & P. Dilara (2012))

‘…there is no ‘silver bullet’ (vehicle) technology to replace existing ones in the near future’

‘The potential of conventional ICE vehicles is still substantial (offering) high cost-effectiveness and driving performance which can hardly be matched by alternative technologies.’

‘Electric vehicles have potential to offer substantial GHG and (pollutant) reductions over conventional technologies.’

‘However, cost, infrastructure needs, and battery capacity are still significant obstacles in their widespread penetration.’

http://publications.jrc.ec.europa.eu/repository/bitstream/111111111/26092/1/0609_12-sustainability_online.pdf

JRC = Joint Research Centre of the European Commission







EU-27 Fuel Demand Trends: Including Biofuels

Continuing shift in road fuel demand from gasoline to diesel Vehicle efficiency improvements and alternative vehicles result

in steady decline of total road fuel demand from 2015 onwards Ratio of diesel to gasoline continues to grow through 2030 Jet/kero demand increasing

0.0

1.0

2.0

3.0

4.0

0

50

100

150

200

2000 2005 2010 2015 2020 2025 2030

Ra

tio

: to

tal d

ies

el /

ga

so

lin

e

De

ma

nd

Mt/

a

Gasoline Jet/Kero On-road Diesel Off-road Diesel (incl. rail)

Source: CONCAWE/IEA/ Wood Mackenzie 2011 Gasoline and diesel trends to 2020 are from the JEC Biofuels programme + E10 and B10 scenario + 95g CO2/km assumed for cars by 2020. Extension to 2030 is CONCAWE work in progress + 75g CO2/km assumed for cars by 2030.

JEC: JRC-EUCAR-CONCAWE




Short on Distillates, Long on Gasoline

Europe continues to be short on diesel and jet/kero production, long on gasoline, providing a market opportunity for biodiesel blendstocks

-100

-80

-60

-40

-20

0

20

40

60

LPG Naphtha Gasoline Jet/Kero Diesel Gasoil LSFO HSFO

Bala

nces, M

t .

2000 2005 2010 2015 2017 2020 2025

Surplus

Deficit

Source Wood Mackenzie (2011)

European Union

Refinery supply balance

Deficit




EU Legislative Framework

Reduce Greenhouse Gas emissions from energy and transport

Energy Efficient Road Transport Vehicles (2008)

Fuel Quality Directive (2008)

Fuel manufacturing: 6% reduction in GHG emissions by 2020 through refinery efficiency and biofuel blending

Emissions Trading Scheme (ETS)

Geological Storage of Carbon Dioxide (2008)

Encourage use of sustainably-produced renewable fuel products

Fuel Quality Directive (2008)

Allow up to 10% v/v ethanol in gasoline (E10)

Renewable Energy Directive (2008)

10% renewables (energy basis) in road fuels by 2020

– New RED Amendment proposes 5% cap on biofuels that compete with food (ethanol, FAME), encourages advanced biofuels, and includes extra credits for non-food products

Intermediate targets in 2015 and a progress review in 2014

Member State strategies communicated through NREAPs




Vehicles:

More advanced engines & aftertreatment, diversification in engines and fleet

Fuel consumption of LD vehicles improving, HD diesel demand increasing

Increasing pressure on OEMs for CO2 reductions with associated higher cost

Customer preferences potentially in conflict with mobility policies

Refineries:

Increasing imbalance in diesel/gasoline demand ratio

Higher CO2 emissions due to distillate demand and product specifications

Increasing pressure on CO2 emissions reduction (FQD Art. 7a) with higher cost

Biofuels and other Renewables:

Renewables in transport fuels mandated by RED to 10% (energy) by 2020

Conventional biofuels widely available but with sustainability/ILUC* concerns

Slower than expected pace of development for more advanced biofuels

National Renewable Energy Action Plans (NREAPs) show that pace/priorities differ across Member States, potentially leading to fuel diversification

CEN fuel specifications are struggling to keep pace with legislative mandates

Coming Decade for European Road Transport

ILUC = Indirect Land Use Change




GHG Reduction Challenge for Road Transport

Refining

~9 % Crude Production

~7 % Distribution &

Retail ~1%

Combustion of

unit of energy ~83%

Source: For conventional vehicles and fuels: JRC/EUCAR/CONCAWE Well-to-Wheels Study (2011)

Well-to-Tank (WTT)

~17% (production side)

Tank-to-Wheels (TTW)

~83% (consumption side)




Energy/GHG Reductions from Well-to-Wheels

1. Improve efficiency, reduce GHG from fossil fuel production Improve energy efficiency (WTT) Decrease GHG/CO2 emissions Immediate impact as manufacturing efficiency improves

2. Replace fossil fuels with sustainable renewable fuels

Significant questions regarding availability, sustainability Slower than expected development of advanced biofuels Immediate impact as renewable fuels enter marketplace

3. Improve efficiency of vehicles and road transport

Improve efficiency of engines and vehicles (TTW) Longer-term impact as the vehicle fleet is steadily upgraded Improve efficiency of road transport through information

technology and “non-technology” measures (reduce congestion, eco-driving)

Immediate impact as efficiency measures are implemented




CO2 Emissions from EU Refineries

EU total emissions: 5000 Mt CO2eq/annum

This is about 15% of global CO2eq emissions

EU refineries emit about 145 Mt CO2/annum

This is about 3.5% of total EU CO2 emissions

1.4 Mt CO2/annum emissions from the average refinery

Largest “complex” refineries emit up to 5-6 Mt CO2/annum

The legislative instrument for reducing CO2 emissions under the EU climate package is the “Emissions Trading Scheme” (EU ETS)




Crude oil quality does not match market demand

Crudes are generally “heavier” than what the market demands Not enough intermediate products, especially middle distillates Too much residual products, especially heavy fuel oils

0

20

40

60

80

100

Brent Iran light Nigerian Russian Kuwait Demand

LPG

Naphtha/gasoline

Kero/jet

Gasoil/Diesel

Heavy fuel oil




The Refinery’s Challenge

Use readily available crudes

Adapt to quality variations

Adapt to different crudes

on a day-to-day basis

Produce the desired demand

All products must be “on-spec”

All must be produced at the same

time

Nothing can be thrown away!

Bio-components must be used

Minimise energy, CO2, environmental impacts, and costs

0

20

40

60

80

100

Brent Iran light Nigerian Russian Kuwait Demand

LPG

Naphtha/gasoline

Kero/jet

Gasoil/Diesel

Heavy fuel oil




Refineries turn crude into fit-for-purpose products

Achieving this requires complex processing technology and hydrogen “Reforming” to obtain the desired molecules Residue conversion to “crack” large molecules into smaller ones Hydrotreating to obtain the desired product quality

More complexity means that more energy and hydrogen (“fuel & loss”) are needed and typically more CO2 emissions are produced in the process

0%

2%

4%

6%

8%

10%

0%

20%

40%

60%

80%

100%

2010EU Demand

SimpleRefinery

High gasolineComplex Refineries

High diesel

Fue

l & L

oss

(%

on

cru

de

oil

)

De

man

d (%

) or

Re

fin

ery

yie

ld (%

on

cru

de

oil

inta

ke)

LPG

Naphtha

Gasoline

Kero/Jet

Gasoil/Diesel

Heavy Fuel Oil

Fuel & Loss




How can refineries respond to these challenges?

What options are there to meet policy expectations for GHG reductions from the fuel supply while also meeting the future demand for transport fuels?

Improve energy efficiency of refineries?

Yes, about 0.5% efficiency improvement per year

Replace refinery fuel by more natural gas?

Yes – within limits

Selectively use “lighter” crudes in Europe and reject “heavier” crudes to refineries in other parts of the world?

No, crude oils – and CO2 – are international commodities

Implement Carbon (CO2) Capture and Storage (CCS) in refineries?

Not likely in refining until power sector implements

Replace fossil fuels by bio-blending components?

Yes – within limits




The JEC research collaboration was initiated in 2000 by:

JRC: Joint Research Centre of the European Commission

EUCAR: European Council for Automotive R&D

CONCAWE: Research Association of the European Oil

Refining Industry

JEC Biofuels Study: Implementation Scenarios

Collaborative Projects

2000-2010: Projects Completed

Well-to-Wheels (WTW) Study Versions 1, 2b, and 2c

WTW Study Version 3: enhancing pathways and vehicles

Impact of ethanol on vehicle evaporative emissions (SAE 2007-01-1928)

Impact of ethanol in petrol on fuel consumption and emissions

JEC Biofuels Study for a 2020 time horizon (2011)

http://ies.jrc.ec.europa.eu/about-jec

2012: Projects in progress

2012+: Version 4 of the JEC WTW Study

2012+: Update of the 2011 JEC Biofuels Study

Analysis of nine scenarios

for biofuel implementation in

road transport by 2020







Scenario 1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Scenario 6 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Gasoline Grade 1 Gasoline Grade 1



Diesel Grade 1 Diesel Grade 1




















Scenario 5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Gasoline Grade 1

Gasoline Grade 2

Gasoline Grade 3

Diesel Grade 1

Diesel Grade 2

B10 (all)

B10 (all)

B15 (HD)

B7

E10 E20

E5

E10 E20

E5

E10

E10

B7

E20

E5

E10

E5 E10

E5 E10

E10 E20

B10 (HD)

E85

B7

B7

B10 (HD)

E10

E85

E85

B7

E5

E10

B7

B7

E5 E10

B7

E5

B7

E10

E5 E10

JEC Biofuel Implementation Scenarios

Scenario 1: Reference Case

Source: JEC Biofuels Study (2011)





Biofuel grades in Scenario 1: Reference Case

Increasing ethanol in petrol up to E5 by 2011

- No vehicle compatibility restriction due to

availability of E5 ‘protection grade’ petrol

New E10 (main) grade introduced in 2011

- E10-compatible vehicles assumed to be

MY2005+

Increasing FAME in diesel up to B7 by 2010

- No vehicle compatibility restriction

Assumed 1 Mtoe FAME/HVO coming from

waste oils with a 2x RED factor (DG ENER)

Biofuel blends in EU market

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2005 2010 2015 2020

%vo

l

Gasoline Grade 1 (E5)

Gasoline Grade 2 (E10)

Diesel Grade 1 (B7)

Diesel Grade 2

Alternative fuel demand in all transport sectors

0

4

8

12

16

20

2005 2010 2015 2020

Mto

e/a

CNG

LPG

FAME

HVO

BTL

EtOH conv.

EtOH adv.

Electricity

0

5

10

15

20

25

30

2005 B7, E10

Mto

e/a

0,0%

2,5%

5,0%

7,5%

10,0%

12,5%

15,0%

% R

ED

FAME

Total Ethanol

RED: road

RED: all sectors




























Scenario 5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Gasoline Grade 1

Gasoline Grade 2

Gasoline Grade 3

Diesel Grade 1

Diesel Grade 2

B10 (all)

B10 (all)

B15 (HD)

B7

E10 E20

E5

E10 E20

E5

E10

E10

B7

E20

E5

E10

E5 E10

E5 E10

E10 E20

B10 (HD)

E85

B7

B7

B10 (HD)

E10

E85

E85

B7

E5

E10

B7

B7

E5 E10

B7

E5

B7

E10

E5 E10



Scenarios 2-4: Higher Biofuel Grades

Scenarios 5-6: Higher Biodiesel Grades (HD)

Scenarios 7-9: Plus Flex-Fuel Vehicles (FFVs)





Optimistic assumptions used for vehicle compatibility and market uptake

Considerable coordinated effort would be required to implement higher

biofuel scenarios by 2020 achieving only a small increase in % renewables


0.0%

2.5%

5.0%

7.5%

10.0%

12.5%

15.0%

0

5

10

15

20

25

30

1 (REF) 2 3 4 5 6 7 8 9

% R

ED

EU

27

+2

Tra

nsp

ort

FA

ME

an

d E

tha

no

l D

em

an

d

(Mto

e/a

)

FAME

Ethanol

% RED: Road

% RED: All Modes

Scenario

FAME

Ethanol

B7 B7 B10 B10 B7/B15H B7/B10H B7 B7 B7/B10H

E10 E20 E10 E20 E20 E20 E10/E85 E20/E85 E10/E85





Future Fuel Grades: Implications and ‘Wildcards’

Implications:

Before 2020, E5/E10 (ethanol and ether), B7, and E85 are most likely fuel grades for broad market penetration

Selected markets for B10 and B30-B100 for captive fleets

Customer awareness and fuel/vehicle labeling important

Difficulty meeting RED and FQD targets complicated by 5% cap on conventional biofuels and ILUC reporting factors

Demand for advanced biofuels that ‘tick all the boxes’

‘Wildcards’

Member State mandates and expectations (NREAPs)

Fuel demand on refineries and imports/exports

Compatibility of future vehicles with higher biofuel grades

Pace of development of advanced biofuel technologies

Fuel costs and customer acceptance




New Expectations, New Options for Road Transport

(CO, HC, NOx, Ozone, Noise)

Urban

Air Quality Urban

Air Quality

and

Energy/GHG

Reduction (CO2, CH4, N2O)

Modern Engine Systems

Spark Ignition + Sequential Fuel Injection

+ Gasoline Direct Injection

Compression Ignition + Direct Injection

Alternative Engines

and Powertrains

Advanced Combustion + HCCI, CAI

Hybrids & Plug-in Hybrids

Battery Electrics + Hydrogen and Fuel Cells

Advanced Aftertreatment

Modern Fossil Fuels

10 ppm Sulphur Fuels

Vapour Pressure

Cetane Number

Additive Technology

Alternative Fuels

Bio-fuels + 1st and 2nd Generation

Compressed Gases + LPG, CNG

+ DME, Biogas, H2

Advanced Aftertreatment




Global Engine Production by Technology

Source: AVL (2012)




Paths Forward in a Carbon-constrained World

Source: MIT Consortium: “On the Road in 2035” (2008)




Challenges for European Refining

Economic outlook combined with refinery over-capacity will keep pressure on margins (5–10 years?)

With many product quality & supply/demand challenges

Continuing restructuring and new players in refining sector

Legislative pressure is continuing to increase

Plus more compliance to come from existing EU Directives

Political focus is on GHG reduction but ‘traditional’ environmental issues have not disappeared

Vehicle emissions, air quality, noise, water, waste, etc.

EU is adopting an ‘anything but oil’ strategy

Goal is 80-95% decarbonisation of energy sources by 2050

Energy for transportation is continuing to move away from conventional refinery products to renewables/alternative fuels

Vehicle fleet will continue to diversify - changing the fuel demand, diesel/gasoline balance, import/export outlook, etc.





Thank you for your attention!

transport and fuels - a3ps...the jec biofuels programme + e10 and b10 scenario + 95g co 2 /km...

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