An Analysis of the Potential and Cost of the U.S. Refinery Sector Decarbonization

Abstract

In 2019, U.S. petroleum refineries emitted 196 million metric tons (MT) of CO₂, while the well-to-gate and the full life cycle CO₂ emissions were significantly higher, reaching 419 and 2843 million MT of CO₂, respectively. This analysis examines decarbonization opportunities for U.S. refineries and the cost to achieve both refinery-level and complete life-cycle CO₂ emission reductions. We used 2019 life-cycle CO₂ emissions from U.S. refineries as a baseline and identified three categories of decarbonization opportunity: (1) switching refinery energy inputs from fossil to renewable sources (e.g., switch hydrogen source); (2) carbon capture and storage of CO₂ from various refining units; and (3) changing the feedstock from petroleum crude to biocrude using various blending levels. While all three options can reduce CO₂ emissions from refineries, only the third can reduce emissions throughout the life cycle of refinery products, including the combustion of fuels (e.g., gasoline and diesel) during end use applications. A decarbonization approach that combines strategies 1, 2, and 3 can achieve negative life-cycle CO₂ emissions, with an average CO₂ avoidance cost of $113-$477/MT CO₂, or $54-$227/bbl of processed crude; these costs are driven primarily by the high cost of biocrude feedstock.