Repurposing, Co-Processing and Greenhouse Gas Mitigation - the Refining Sector Under Deep Decarbonization Scenarios: A Case Study for Brazil Using Integrated Assessment Modeling

Abstract

Deep decarbonization scenarios show that fossil oil use is expected to decline in the coming decades, meaning that oil refineries must adapt. This work evaluates the refining sector in deep decarbonization pathways using Brazil as a case study. BLUES – a national Integrated Assessment Model (IAM) – is employed to investigate the evolution of the sector in mitigation scenarios. The production of feedstocks for the petrochemical industry, of fuels for the aviation and maritime sectors, and biomass co-processing are analyzed since those strategies may bring resilience to the refining sector. In addition, the potential for avoiding emissions in refineries’ operations is also explored. BLUES results for the country as a whole are used as the starting point for a detailed analysis of the Brazilian refining industry. Results show that the employment of refineries’ assets for purposes aligned with decarbonization targets, along with CO2 emissions mitigation in the sector, reduces risks of carbon lock-in and of asset stranding. To our knowledge, this is the first study that evaluates not only emissions’ mitigation in the refining sector, but also uses an IAM to investigate oil refining repurposing and co-processing options in the context of decarbonization.

Keywords: refining, fossil fuels, integrated assessment models, decarbonization scenarios, climate change mitigation.