Refineries of Tomorrow: A vision of flexibility and innovation

The refinery industry has long been marked by its adaptability in the face of shifting regulations and market demands. As the energy transition conversation and decarbonization agenda take hold, the refining industry is once again compelled to rethink and innovate, adapting to new technologies and regulations.

Just what the refinery of tomorrow might look like, however, is as varied and complex as the industry itself. Each refinery faces unique challenges and opportunities, shaped by specific circumstances. What is certain is that the future refinery will undoubtedly be characterized by technological advancements, catalysis, and an unparalleled level of flexibility, writes Lars Skyum, Senior Vice President for Clean Fuels & Chemicals Catalysts at Topsoe.

I recently had the great opportunity to deliver the opening keynote speech at the Topsoe “Refineries of Tomorrow” Seminar in Copenhagen, Denmark. Gathered in the room were over 50 leading executives and changemakers from the European and global refinery industry. I am certain that if I had asked everyone individually what the Refinery of Tomorrow would look like – even in five to ten years from now – I would have received over 50 different and valid answers.

A bespoke approach is needed

Each refinery represented in that room has its own specific circumstances, challenges, and hopefully, its own specific solutions and opportunities. One thing everyone could agree on, however, was that the industry had embarked on an energy transition journey. Yet, once the specific solutions and the rate of implementation of decarbonization technologies were discussed, we quickly returned to 50 differing replies! I am pretty sure, however, that it will involve technology, catalysis, knowhow and, perhaps above all, flexibility as we adapt to unprecedented changes and new demands.

Over the three decades that I have worked closely with refiners globally, one conversation has repeatedly arisen at different junctures: Times are challenging, regulations are changing, new products are needed, investments must be made to survive… and all of this is happening with uncertainty about the future. This uncertain and challenging environment is exactly what is once more facing the industry today. And the challenges of the refinery sector are very much also our challenges as a catalyst and technology provider; our collaboration and partnership will be the key to future proofing the refinery industry in the energy transition.

A changing (and increasingly green) landscape

One of the variables is the rate at which the energy transition will take place and what the global use of fossil oil will look like in different scenarios. Denmark is a small country in a global perspective, but if we look at the sold fleet of personal cars in DK in 2023, 45% of these were EVs (electric vehicles) or Hybrids, 45% were gasoline and only 10% of new personal cars sold in Denmark last year had a diesel engine. For comparison, 16% of new personals cars were an EV or a Hybrid three years earlier in 2020 – that is a growth from 16% to 45% in just three years.

Oil demand forecast models published, for example, by IEA (International Energy Agency), EIA, OPEC, McKinsey and some of the oil majors tell their own tale. Each of these organizations present different scenarios with a conservative to a more aggressive view on the energy transition. In summary, it seems like most experts believe oil demand will peak during the end of this decade and the demand will then be relatively flat but slowly declining. This outlook necessitates strategic adjustments within the industry, particularly concerning the product mix.

If we look at this product mix in the various scenarios, it seems like there will be a continued and increased demand for petrochemical feedstock and jet fuel, whereas the growth for gasoline is set to reverse and further down the line for transportation fuel overall.

Opportunities remain

Due to the progress of the energy transition and to the demand impact of the pandemic, we have seen several refineries shutter in the US over the last couple of years. In Europe, over the last 10 to 15 years,  closures have been more down to increased competition from the large refinery expansions in the Middle East and India. Though several refineries in Europe are closing, some of have also transformed into biofuel producers. This adaptability underscores the importance of flexibility in refinery operations.

We are now seeing the interest for renewable diesel and lately sustainable aviation fuel spreading to Asia and China, but whereas some refineries in Europe are shuttering, the refineries in Asia and China are producing the renewable fuels as part of a diversification strategy.

Lately, we have seen a huge interest in co-processing of SAF (Sustainable Aviation Fuels), as this is a relatively cheap solution to meet the demand for 2% SAF needed in the EU from 2025. One such example is TotalEnergies, who recently selected Topsoe’s isomerization catalysts for co-processing SAF at its Gonfreville refinery in France. It is the first SAF co-processing project Topsoe is involved in. Based on used cooking oil, it is planned to produce 40,000 tons SAF from 2025. But what we also see is that the interest in co-processing of SAF is not limited to Europe but seems to be attractive for refiners in the Middle East and Asia, who plan to export the fuel to Europe.

Catalysts and refinery efficiency is still at the core

Overall, there is a lot of movement driven by the energy transition. Topsoe’s focus – together with our customers – is on identifying the pathways with the greatest decarbonization potential, factoring in regulation, cost, feedstock and technology maturity. If we at Topsoe do not have these insights and understanding of the projects, we and our customers risk working on projects that will not reach FID, and this is not good for the climate nor for our business.

The vision for Topsoe is “to be recognized as the global leader in carbon emission reduction technologies by 2024” and we have developed a broad portfolio of decarbonization solutions, tailored to specific customer needs based on location, regulations, and feedstock availability. The portfolio is divided into four main categories:

1. Replacing fossil feedstock: Transitioning to biomass derived fuels or eFuels
2. Reducing greenhouse gas emissions: Implementing technologies that lower carbon footprints such as low-carbon or blue hydrogen, low-carbon methane, low-carbon ammonia and plastic recycling
3. Reducing air pollution: Advanced solutions that minimize VOC, SOx and NOx emissions
4. Making conventional solutions more efficient: Helping traditional refineries become more efficient, productive and profitable (and reduce their emissions) through improved catalysts and technology.

Fueling up for the journey ahead

The energy transition journey is fraught with uncertainties, including the pace of change and global oil demand trends. To navigate these complexities, strategic collaborations between refiners and technology providers like Topsoe are crucial. By working together, the industry can identify the most promising pathways, balancing regulatory requirements, costs, and technology maturity.

The transformation of refineries is a collective endeavor, requiring close collaboration between refiners, technology providers, and regulatory bodies. By exploring both short-term and long-term solutions, the industry can navigate the energy transition effectively.

The conversations and projects ahead will be instrumental in shaping the future, fostering a shared vision for the refineries of tomorrow. Through innovation, flexibility, and strategic partnerships, the refining industry can adapt to unprecedented changes and new demands, ensuring a sustainable and resilient future. And that’s something I hope we can all agree on!