1. CONCAWE’s Views on the Fuels Directive, Article 7a
J-F. Larive and K. D. Rose
Technical Coordinators
CONCAWE
29 May 2007

2. Topics
Current understanding of Article 7a
Potential for GHG reduction through refining
Crude oil selection
Refinery complexity
Refinery energy efficiency
Potential for GHG reduction through biofuel use
Simple model to examine biofuel impacts

3. Our Current Understanding
What does “life cycle” really mean?
True Well-to-Wheels?
Well-to-Tank only?
Well-to-Tank plus “Latent” Combustion Emissions?
GHG reduction applies per unit of energy
i.e. NOT to absolute emissions?
Liquid fuels will be treated as a pool
Obligation can be met by a combination of diesel and gasoline
Applying obligation to each fuel separately would dramatically reduce flexibility and may result in infeasible targets
Refiners do not control the volumes demanded for road fuel use
What GHG reduction potential can be expected?
What can be expected from fossil fuels?
What can be expected from biofuels?

4. Fossil fuels

5. WTT plus “Latent” Combustion Emissions
Production
Energy
WTT
“Latent” Combustion Emissions
Energy
to Vehicle
Fossil fuel
Biofuel
Purely WTT energy/emissions do not describe the system properly
Biofuels reduce fossil energy / GHG emissions because they only release renewable CO2 when combusted
This approach does not include effect of engine/vehicle efficiency

6. Fossil Fuel Energy/GHG Footprint
WTT GHG emissions of fossil fuels represent only about 15% of the combustion emissions
“Downstream” GHG emissions (i.e., from refining and distribution) represent about 2/3 of that total
Oil refineries turn crude oil into desirable products of the right quality and in the right quantity
This requires a complex array of physical separation and chemical transformation
This production process consumes energy
The selection of process steps is determined by the desired products, not by energy reduction considerations
The complexity of refineries is not a variable when it comes to energy consumption

7. Can crude oil selection help?
Brent Iranian Light Kuwait
Each crude oil yields a different product slate by distillation alone
Lighter crude oils (like Brent) tend to require less energy
Crude flexibility is limited for an existing refinery
On an EU-wide basis, the amount of light crude available on an economic and secure basis is limited
Processing more light crude in EU would simply push heavy crudes to other regions of the world
Any constraint on crude quality would complicate security of supply

8. Why are refineries complex?
Simple refineries consume very little energy
In this example, only about 2.5% of processed crude
They also fall short of producing the desired slate of products, even when processing light crude oils

9. Why are refineries complex?
Complex refineries are needed to meet both demand and quality
These refineries typically consume 2-3 times more energy than simple refineries
Meeting EU road fuel demand with only simple refineries would require 50% more crude and produce 3 times more heavy fuel oil than there is a market for

10. Refineries have increased complexity to meet demand
EDC = Equivalent Distillation Capacity
Refinery complexity has steadily increased to meet market demand over the past 15 years

11. What can refiners do to conserve energy?
At the design stage of new plants
Select most efficient processes for a given product slate
Select the most energy efficient equipment
Optimise heat integration
Maximize use of CHP
In everyday operation of existing plants
Housekeeping (steam leaks, insulation)
Heaters and boilers monitoring and optimisation
Heat exchanger maintenance

12. Refineries have continuously improved energy efficiency
Operational measures and investments have improved the energy efficiency of EU refineries by 13% over the past 15 yrs
This trend is expected to continue but technological limits are looming

13. Greater refinery complexity increases energy consumption
While refineries have become more complex and more efficient, energy consumption as a percentage of the crude processed has increased as refineries adapt to:
Heavier crude oils
Fuel quality specifications
Product demand, especially the ratio of diesel to gasoline

14. Overall refinery CO2 emissions will increase in spite of further efficiency improvements
Source CONCAWE
In a business-as-usual scenario, refinery CO2 emissions will increase to meet extra demand and the increasing diesel share
A lower demand for refinery products may not yield any CO2 reduction unless the diesel/gasoline ratio is also kept low

15. Options are limited to replace refinery process fuels
Typically up to 70% of a refinery’s process fuel consists of fuel gas and FCC coke which must be consumed and cannot be disposed of in any other way
Some flexibility may exist for the remaining 30% such as replacing heavy process fuel by natural gas (where available)
There is limited scope for this because not all refineries have ready access to natural gas

16. Conclusions: Fossil Fuels
WTT GHG emissions of fossil fuels represent only about 15% of combustion emissions
GHG emissions from EU refineries are likely to increase rather than decrease
Heavier crude oils
Tighter fuel specifications
Market demand for road fuel products
Assigning specific refinery GHG emission reductions to specific refinery products is not practical
GHG reduction targets from fuel production will need to be covered by biofuels

17. Biofuels A simple model to examine the impact of biofuels

18. Road Fuel Demand and Fleet Assumptions
Emissions from new cars
125/100 g/km in 2012/2020
Include 5 g/km from “other measures”
Fleet average is then 150/119 g/km in 2012/2020
Dieselisation up to 55% of new cars by 2012, dropping to 50% by 2020
Distance driven by LD cars increases 2% per annum
HD fuel consumption increases 1.5% per annum
Assumes some efficiency improvement in HD vehicles

19. Biofuels Introduction Rates: Main Assumptions
Conventional ethanol and FAME from set-aside land plus land released by surplus cereals and sugar reform
Includes 0.8%/annum improvement in agricultural yield
Land divided 50/50 between ethanol and FAME
Initially high growth rate in production, slowing down after 2012
Ethanol grows to 5.4 Mtoe in 2012 and 7.2 Mtoe in 2020
FAME grows to 7.3 Mtoe in 2012 and 9.3 Mtoe in 2020
Domestic advanced ethanol from straw and BTL from waste wood start after 2010 to reach maximum resource use in By 2020, these processes will consume:
17 Mt/a of straw to make 2.5 Mtoe of ethanol
26 Mt/a of (dry) waste wood to make 4 Mtoe of BTL
Imported ethanol from sugar cane or ligno-cellulosic sources
Extra BTL from wood probably also imported

20. Five Scenarios Analysed
No biofuels base case
Conventional domestic biofuels only
Conventional ethanol and FAME based on EU domestic resources only
Maximum domestic biofuels
Case 2 plus advanced biofuels from domestic sources (ethanol from straw and BTL from wood waste) beginning in 2010
Meeting the 10% biofuels target with biofuel imports
Case 2 plus import of ethanol and FAME to meet a 10% (energy basis) target
Meeting the 10% Life Cycle GHG reduction target as well
Case 4 plus import of ethanol and BTL to achieve GHG target
Source: JEC WTW Study

21. Bio-component introduction needed to reach EU targets
Source: CONCAWE, based on results of JEC WTW Study
Additional biofuel imports needed to meet Fuels Directive target
Fuels Directive target
Biofuels Directive target
Biofuel imports needed to meet Biofuels Directive target
Advanced Domestic Biofuels
Conventional Domestic Biofuels
10% bio-components in road fuels on an energy basis (Biofuels Directive) and 10% GHG reduction (Fuels Directive) by 2020 are NOT equivalent targets

22. Can this much biofuels be sourced?
Source: CONCAWE, based on results of JEC WTW Study
28 Mt/annum of ethanol represents about 250% of the entire 2004 Brazilian production
11 Mt/annum of BTL would require:
50 plants as currently planned by Choren in Germany
11 “worldscale” plants
70 Mt/annum of dry wood

23. Bio-component volumes in road fuel pools
Source: CONCAWE, based on results of JEC WTW Study
Shrinking gasoline demand and higher ethanol availability drive up the ethanol volume in the gasoline pool

24. GHG avoidance from LD road transport
Source: CONCAWE, based on results of JEC WTW Study
Improvements in vehicle technology and reduction in road fuel demand have a large impact

25. Sensitivities and Conclusions
Sensitivity of conclusions to model parameters investigated
LD mileage demand growth
HD fuel consumption
Rate of dieselisation
Increased availability of imported FAME
Increased renewability of domestic ethanol
Main conclusions are relatively insensitive to these parameters
Ethanol in gasoline remains high in all reasonable scenarios
Only massive availability of high renewability diesel components could completely change the picture
Vehicles and specifications must be available to promote use
Biofuels Directive and Fuels Directive targets are not equivalent