Rocky Mountain Institute Releases Report on Roadmap to Slash Oil Refining Emissions
Refining and petrochemical industries currently make up 6 percent of total emissions and will continue to play a role in our clean energy future. This roadmap illustrates what is required to reduce the climate risk of oil refining with impact on petrochemical manufacturing.
Boulder, CO – November 22, 2022
RMI, founded as Rocky Mountain Institute, has released a detailed analysis to show that swift action in the oil refinery industry could significantly accelerate progress toward the 50 percent cut in global greenhouse gas (GHG) emissions required in this decade to avoid a climate disaster.
Oil refineries are one of the largest direct consumers of oil and gas products. Cutting even 1 percent of the direct emissions from the sector would equal to taking 3 million gasoline-powered cars off the road. The greatest opportunity for climate action wins lies within the industry’s concentration: less than 900 global refineries are the sole transformers of combusted oil compared with the millions of wells filling thousands of oil tanks for billions of consumers. Although fossil fuel end use for transportation and power has traditionally dominated climate action conversations, remaining oil sourcing and products must rapidly reduce emissions to meet 2030 goals. Refineries influence the entire oil supply chain as the essential and transformative step between crude oil production and petroleum product end use. Focusing on the refining segment when analyzing lifecycle emissions, the oil sector can provide a significant down payment toward a safe climate future. RMI’s Climate Intelligence Program targets decarbonization opportunities for this sector, given the significant role petrochemical products such as plastics and fiber composites will play in clean energy infrastructure like solar panels and wind turbines.
“Even if we make a complete transformation to electrified transport and renewable energy, there will be a continued demand for things like fertilizers and polymers that drive the global economy. It is essential that we accelerate refining and petrochemicals sector decarbonization efforts today,” says TJ Conway, Principal of Climate Intelligence’s Oil and Gas Solutions Initiative.
The report highlights key strategies to mitigate the refining sector’s potential climate risks, given the limitations of focusing on any singular approach:
- Optimizing gas management systems to minimize high global warming potential (GWP) releases such as methane, a GHG that is 80x more potent than CO2.
- Adapting to changing fuel demand, such as vehicle electrification, as a means to scale back refining capacity and emissions. Incentives and rebates to spur electric vehicle purchases — such as those offered in the recently passed Inflation Reduction Act — will continue displacing fuel demand for internal combustion engines.
- Employing bio-based feedstocks derived from food system waste or forestry residue can be used to produce biofuels such as renewable diesel and sustainable aviation fuel (SAF) without requiring a complete overhaul of existing refinery business models.
- Moving toward a circular carbon economy (CCE) approach for refining prioritizes reducing, reusing, recycling, and removing carbon across economic sectors. Although standard mechanical recycling is the preferred option on cost, energy use, and GHG intensity, only about 20 percent of the plastics currently meet the financial return threshold to be sustainably recycled mechanically.
When successfully deployed at scale, RMI believes strategies for cutting oil refining and petrochemical sector emissions will play a critical role in achieving a safe climate future and limiting energy security concerns linked to a global economic upheaval.
“We have reached code red for the climate. Oil and gas currently account for over half of human-made emissions on a life-cycle basis. Until we find commercially viable alternatives to hydrocarbon use in hard-to-abate sectors, we must seize opportunities to cut oil and gas sector emissions now,” says Joseph Fallurin, Senior Associate, RMI, and one of the report’s authors.
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RMI, founded as Rocky Mountain Institute, is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C future and secure a clean, prosperous, zero-carbon future for all. We work in the world’s most critical geographies and engage businesses, policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50 percent by 2030. RMI has offices in Basalt and Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing.