Trends and regulations for low carbon fuels
Driven by a need to comply with legislation, decarbonise their businesses or capitalise on the opportunity to improve profitability, a growing number of refiners are investigating their options for producing biofuels.
The principal driver for investing in biofuels capacity will vary according to a refiner’s location and the markets that it serves. In Europe, for example, refiners are looking for ways to comply with the EU’s revised renewable energy directive (RED II) and avoid penalties, whereas incentives in the USA mean that biofuels represent an opportunity to improve profitability.
It is important to note, however, that future regulations are likely to mandate the use of even more challenging feedstocks, such as forestry and agricultural residues. Consequently, it is vital that refiners plan carefully to avoid a regret investment.
As an owner-operator, Shell is driven to learn continuously from operational experience and to evolve its technologies, and is already working on expanding the Shell Renewable Refining Process’ feedstock processing window.
Benefits for energy producers
The technology can unlock value for refiners in a number of ways. For example, it can help you to:
- comply with legislation such as RED II in Europe;
- improve profitability, as biofuels have a higher market value than conventional diesel and can generate trading credits;
- ensure that your investment is future proofed, as we expect to expand the processing window through focused R&D and continuous improvement; and
- minimise capital expenditure, as our design philosophy is to maximise the reuse of existing assets to help reduce costs.
In addition, its two-stage configuration offers multiple benefits over single-stage units, including:
- higher diesel and sustainable aviation fuel yields;
- longer cycles and slower yield decline; and
- the ability to produce a range of cloud points that qualify for any renewable diesel market in any season, and the flexibility to swing between diesel and sustainable aviation fuel.