Energy Transition Impact On The Refining Industry

The demand for transportation fossil fuels will decline over the longer term. The pace of change is moderate considering the established road transport, the associated infrastructure fueling system, and an established distribution network for fossil fuel. However, global warming and environmental concerns lead us to the energy transition with various new green and renewable alternatives, with accelerated technology development and growth of cleaner fuel to the consumers.

As of date, the key drivers are the penetration of alternative electric vehicles and stunning adaptation of the same by consumers in urban markets, emerging new policies and regulations that support no internal combustion engines by 2030, fuel cell-based long-haul and electrification of city trucks and green fuels like methanol and ammonia to lower the shipping emissions and sustainable aviation fuel (SAF) fuel.

The cost of alternative clean fuels, without government subsidies/incentives, to replace fossil fuels limits growth. At the same time, for petrochemicals, alternative feed streams like off-gases, LNG, diesel to naphtha downgrade, crude-to-chemicals, intermediate as well as semi-finished streams to light olefins and aromatics, etc, are needed.

Challenges faced by the Refining Industry

The global refining industry faces a challenging few year with the addition of more than 1.5 million barrels…