File 33272

A REPORT BY ENVIROS CONSULTING LIMITED: AUGUST 2006
DTI
EU ETS PHASE II NEW ENTRANTS SUPPORTING DOCUMENTATION: PETROCHEMICALS
QUALITY CONTROL SHEET
Publication title CAN Volume number Version Date File Reference
EU ETS Phase II new entrant benchmarks DT0040041 Volume 1 of 1 Final Report August 2006 Petchem_V6_2.Doc
Prepared under the management of:
Caroline Doble Project Manager Directed, reviewed and approved by:
Guy Turner Project Director Client Address: DTI 1 Victoria Street SW1P 0ET
Peter Roscoe Tel Email Enviros Contact Details: 020 7215 6166 peter.roscoe@dti.gsi.gov.uk
Enviros Consulting Ltd 20-23 Greville Street London EC1N 8SS
Caroline Doble Tel Fax Email Web 0207 421 6361 020 7430 2210 caroline.doble@enviros.com www.enviros.com
CONTENTS PAGE
EXECUTIVE SUMMARY 1. BACKGROUND AND SECTOR DESCRIPTION

1.1 1.2 Description of UK petrochemical installations and structure of sector Likely changes in sector
1 1
1 5
2.
TECHNOLOGY OPTIONS AND EMISSIONS FACTORS

2.1 2.2 Process options for steam cracking Process options for carbon black
9
9 16
3.
REVIEW AND DISCUSSION OF THE AVAILABLE DATA

3.1 3.2 3.3 3.4 Technology benchmarks and sources Fuel emissions factors Utilisation Emissions Data
19
19 21 23 24
4.
DISCUSSION AND PROPOSED REVISIONS TO BENCHMARKS

4.1 4.2 4.3 Discussion of issues for carbon dioxide benchmarks Proposed Phase II benchmarks Summary of considerations in establishing the level of EU ETS carbon dioxide emissions at a steam cracker
26
26 27 29
5.
EVALUATION OF PROPOSED BENCHMARK ACCORDING TO AGREED CRITERIA

5.1 5.2 5.3 5.4 Feasibility Incentives for clean technology Impact on competitiveness and investment Consistency with incumbents
31
31 31 31 32
6.
SUMMARY OF COMMENTS RECEIVED IN RESPONSE TO CONSULTATION
34
APPENDICES 1. PETROCHEMICALS GLOBAL MARKET DEVELOPMENTS
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
This report forms part of a review of the EU Emissions Trading Scheme (ETS) new entrant benchmarking methodology. It was published for consultation in March 2006 and has since been amended to take account of comments received in response. The petrochemicals industry was not part of Phase I of the EU ETS, although many of the sites did have a portion of their emissions included under other combustion. A decision has now been taken that the petrochemicals and carbon black sectors will be included for Phase II of the scheme. We have developed the benchmarks using a combination of site specific information (provided by operators), published best practice standards and our own experience of the industry. The small number of installations means that the data set on which these benchmarks are based is limited. Published benchmarks, such as those included in the IPPC BREF document, also provide some reference. We consider it is appropriate to differentiate between steam crackers and carbon black due to the wide variations in processes and different products. W e have based the benchmark on a specific feedstock or process. However, the many variables and complexity of petrochemical plants means that it is likely there will be a wide variation in the difference between benchmarked emissions allocation and actual emissions from site to site. We summarise the other factors we have taken into account when deciding on the degree of standardisation that should be implemented in the table below.
Table 1 Summary of factors considered in developing the Phase I benchmarks Variation in CO2 emissions per unit capacity that results from choice Potentially high: specific emissions from a gas plant tend to be lower than from a liquid cracker (relative levels of coproducts are also lower) High: the emission factors of different fuels are rather different, ranging from 0.19-0.25 kgCO2/kWh a difference of up to 33% High: the total output possible per unit feedstock varies considerably
Site specific or similar across sites Technology Similar across sites: technologies are broadly similar
Discretionary/non discretionary (new plant) Discretionary: however driven by the feedstock available. Some technologies are proprietary and so are not available to some operators
Discretionary/non discretionary (extension) Non-Discretionary: the nature of an extension will typically be linked to the technology already installed on a site and by the available feedstock (as the two are linked)
Fuel
Site specific: installations usually burn the fuel available on site rather than natural gas
Non discretionary: driven by the site at which the cracker is located
Feedstock
Site specific: installations are sited close to a particular source of feedstock
Discretionary: when building and operating an installation an operator will compare the economics of cracking different feedstock from different sources
Discretionary (somewhat): when building and operating an installation an operator will compare the economics of cracking different feedstock from different sources. However the technology installed will limit the extent of this choice
DTI
EXECUTIVE SUMMARY
Site specific or similar across sites Running hours Site specific: however, since these installations are designed to operate all year round the range is less than in some EUETS sectors Site specific: the ratio of outputs will depend on the feedstock and market demand
Discretionary/non discretionary (new plant) Discretionary: the load factor will be driven by demand for output and capacity of the installation
Discretionary/non discretionary (extension) Discretionary: the load factor will be driven by demand for output and capacity of the installation
Variation in CO2 emissions per unit capacity that results from choice Low: due to fact that all installations operate at relatively high load factors
Product mix
Discretionary: the exact product mix will be driven by market demand, limited to some extent by the feedstock cracked
High: due to cracking severity
Source: Enviros
Steam crackers The benchmark allocation for the steam cracker operation proposed is based on the following calculation. The specific emissions factor is based on a standardised factor for a state of the art naphtha fed cracker, representing potential energy savings of up to 20% against existing naphtha fed cracker technology. The fuel used in the steam cracker furnace is a residual (recovered from the cracked gas) fuel gas consisting mainly of methane and hydrogen (dependent upon the naphtha quality). The utilisation factor is based on EU average factors over a five year period using published data. The capacity factor is based on survey returns received for UK crackers for this study. The SEC factor is derived from the specific emissions (adjusted) for a state of the art naphtha cracker (0.442 tonne CO2/tonne HVC, see Table 16) and the average benchmarked (BREF) energy consumption of a naphtha cracker.
A Allocation
= =
Ci Plant capacity t ethylene
* *
LF Load factor t ethylene/t ethylene capacity
CF Capacity factor t ethylene /t HVC
* *
EF Emissions factor t CO2/ MW h
* *
SEC Specific energy consumption MW h/t HVC
Allowances
Where:
C i Plant capacity Is defined by the applicant
DTI
EXECUTIVE SUMMARY
C i Plant capacity LF load factor CF capacity factor EF emissions factor SEC energy consumption
Is defined by the applicant Is standardised at 0.89 t ethylene/t ethylene capacity Is standardised at 0.47 t ethylene/t HVC is standardised at 0.199 tCO2/ MW h is standardised at 2.22 MWh/ t HVC
Carbon Black Similarly for carbon black, the benchmark allocation would be based on the equation below. Here the emissions factor is based on the average published emission factor from the BREF document. The fuel used for carbon black production is also the actual feedstock (with the exception of some natural gas used in start up and for operational reasons). The capacity factor is based on survey returns received for UK crackers.
A Allocation Allowances
= =
Ci Plant capacity t carbon black
* *
CF Capacity factor t carbon black/t capacity
* *
EF Specific emissions factor t CO2/t carbon black
Where:
C i Plant capacity CF capacity factor EF emissions factor is defined by the applicant Is standardised at 88% is standardised at 2.51 tCO2/ t carbon black
DTI
EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS
1.
BACKGROUND AND SECTOR DESCRIPTION

This report forms part of a review of the EU Emissions Trading Scheme (ETS) new entrant benchmarking methodology. This report was published for consultation in March 2006 and has since been amended to take account of comments received in response. The petrochemicals industry was not part of Phase I of the EU ETS, although many of the sites did have a portion of their emissions included under other combustion (notably the ExxonMobil Fawley cracker which was completely included via this and the refinery sector definition). A decision has now been taken that the petrochemicals and carbon black sectors will be included for Phase II of the scheme. The purpose of this report is to describe the industry and the factors affecting carbon dioxide emissions from it. We then go on to develop benchmarks to calculate EU ETS allocation for new entrants to the scheme. It is worth highlighting that we have developed the benchmarks using a combination of site specific information (provided by operators), published best practice standards and our own experience of the industry. The small number of installations means that the data set on which these benchmarks are based is limited. Published benchmarks, such as those included in the IPPC BREF document, provide some reference. However this data is based on the entire process requirement, which includes fuel combustion, decoking and utilities.
1.1
Description of UK petrochemical installations and structure of sector
Petrochemicals are chemicals derived from petroleum (crude oil) and/or natural gas. About five percent of the oil and gas consumed globally each year is needed for petrochemical production. These raw materials are currently the least expensive and most readily available source of hydrocarbon molecules. Hydrocarbon molecules are processed into primary petrochemicals and carbon black. Primary petrochemicals are major building blocks for intermediate compounds and more complicated derivative products and comprise:

Olefins: ethylene, propylene and butadiene; Aromatics: benzene, toluene, and xylenes (BTX); and Methanol.
Petrochemical processes do not produce single purified products. As a result of the variation in feedstock and the chemical reactions taking place, desired products are generally accompanied with a range of valuable co-products which can be separated and sold (as well as by-products). The products and co-products are collectively referred to as High Value Chemicals (HVCs) (equating to hydrogen, ethylene, propylene, a mixed butanes or C4 fraction and an aromatics or pyrolysis gasoline fraction). The figure below (Figure 1 ) provides an overview of the main primary petrochemical products and their uses.
DTI
Figure 1
Primary petrochemical products and their uses
Source: Nexant Chem Systems
Carbon black is a black, powder or granular substance made by burning hydrocarbons in a limited supply of air. This produces a black smoke containing extremely small carbon black particles which can be separated from the combustion gases to form a fluffy powder of intense blackness. There are specific grades of carbon black which are chosen depending on the enduse application. Factors that determine the nature of the grade are particle size and structure which dictate some key properties. Carbon black is mostly used as a reinforcing agent for rubber. The largest use of carbon black is in the manufacture of automotive tires. It is also used to colour printing ink, painting, paper, and plastics. Production plants The map below (Figure 2 ) illustrates the location and links of the various production plants and refineries in the UK.
DTI
Figure 2
Refineries and steam cracking units in the UK
Source: Cefic Petrochemistry Programme
a) Steam crackers There are four steam cracking units in the UK. The table below (Table 2) provides an overview of these units. Note that one petrochemical steam cracker (ExxonMobil at Fawley) has already been included in Phase I of the EU ETS due to its level of integration with the Fawley refinery. In addition, all of the steam cracking units were at least partly covered by the EU ETS in Phase I under the other combustion sector) which captured their utility boiler units. Some installations have applied to opt out of Phase I of the EU ETS because they are covered by a Climate Change Agreement (CCA).
Table 2 UK steam cracking units
Installation Fawley Grangemouth
Operator ExxonMobil Ineos
Capacity (kt ethylene/year) 126 1020
Notes Steam cracker Heavy Naphtha or gas oil feedstock Steam cracker with 2 furnace trains: KG Gas Cracker cracks Dry gas from the North Sea and some propane / G4 Liquid cracker, cracks Naphtha, butanes/propanes, other refinery by product Cracks purified ethane received from an adjacent NGL (natural gas liquids plant)
Mossmorran/ Fife Ethylene Plant
ExxonMobil
830
DTI
Installation Wilton
Operator Huntsman
Capacity (kt ethylene/year) 865
Notes Steam cracker Naphtha / LPG (propane, butane, n-butane C5+) feedstock
Source: www.petrochemistry.net and Enviros Survey
b) Carbon Black There are two manufacturers of carbon black in the UK (shown in Table 3) both operating the furnace black process. This process currently accounts for more than 95% of total world production. It involves the partial combustion of a liquid hydrocarbon (petrochemical oil, coal tar oil and natural gas) by burning a secondary feedstock (usually natural gas). This process is discussed in more detail in section 2.2.1 below.
Table 3 Carbon Black
Installation Avonmouth Ellesmere, Stanlow Total
Operator Columbian Chem Cabot
Capacity (kt /year)
Notes Liquid hydrocarbon feedstock Liquid hydrocarbon feedstock
210
Source: Draft Reference Document on Best Available Techniques in the Large Volume Inorganic Chemicals Solid and Others Industry, European IPPC Bureau
1.1.1
Emissions from sector
Non-covered carbon dioxide emissions from some petrochemicals plants as defined in the DEFRA EU ETS Phase II Expansion Explanatory Note are estimated to be 2.5 million tonnes in 2004. 1 This definition proposes that the covered plants will include those chemical installations with processes designed for the production on an industrial scale, either individually or in combination, of propylene and ethylene. Within this, industrial scale is the product output of at least 50ktpa. As a result, petrochemical units producing aromatics are not included in the expansion decision. Also included in the Explanatory Note issued by DEFRA is a definition for carbon black, to be included in Phase II. Benchmarks for the carbon black sector are developed in this report. Sources of carbon dioxide from these sectors (aside from those falling under the other combustion) relate primarily to the use of fuel to directly heat process (hydrocarbon) streams. In addition, carbon dioxide may be generated from the following sources:
Removal of carbon dioxide from ethane gas feedstock (dependent on the gas source but will usually be less than 0.3%); Decoking of furnace tubes;
1 Estimated from data in the UK Phase I NAP as well as the EA and SEPA Pollution Inventories
DTI
Disposal of spent caustic (usually carried out off-site); and Point sources such as sample points vents etc.
Emissions from the above sources are considered minor in comparison to emissions generated from direct firing for process heating. Steam crackers The most significant carbon dioxide emissions from the steam cracking process (aside from those in boilers) result from the combustion of fuels in the cracking furnaces. The furnaces are normally fired on fuel gas product which is generated internally as a residue gas of methane and hydrogen, recycled from the separation unit of the cracker. Some ethane or gas crackers do not generate enough fuel gas and have to import natural gas. The composition of the fuel gas (and indeed the spectrum of products derived from the pyrolysis reaction in the steam cracker) will vary depending on: the feedstock, the availability of natural gas, the degree of recovery of hydrogen and operating conditions 2 . This in turn can vary the level of carbon dioxide emissions (e.g. hydrogen in the fuel gas can reduce the level of carbon dioxide emissions, but increases the emissions of other pollutants such as NOx). However, it is unlikely that operators will seek to change process conditions in order to maximise the production of hydrogen over olefins production, due to their relative economic values. Carbon black Emissions are generated directly from the raw material/feedstock stream which is heated in limited air to produce the product. The tail gas 3 from this reaction contains both the product and the carbon dioxide emissions. This is unusual in that there is not the distinction between the process and fuel streams that there is in other operations. (For instance, for a boiler generating steam, the product stream (that contains the steam) is never in direct contact with the flue gas from the fuel combustion). Installations considered for this study As discussed the decision to include the above plants for this study stems from the DEFRA Phase II Expansion Explanatory Note of 6 March 2006.
1.2
Likely changes in sector
In this section of the report we explain the likely changes to the sector in Phase II of the scheme. Our understanding of likely changes has informed our view of the appropriate benchmarks to develop for Phase II of the scheme.
2 Higher operating severity in the furnaces favours ethylene production. This in turn is related to higher furnace
temperatures and lower residence times

3 A term used to describe the gaseous stream exiting the carbon black furnace/reactor, which has not been converted to
carbon black. This stream will contain nitrogen, water vapour and combustible gases such as carbon monoxide and hydrogen as well as a small amount of carbon dioxide)
DTI
1.2.1
Known or likely new entrants and retirements
The last new cracker in Western Europe was built in 1994 by BASF in Antwerp, Belgium, (although a new furnace train was built on the Grangemouth site post 1994). Most new ethylene capacity since then has been built in the Middle East, China and South East Asia, indicative of where the main growth areas for down stream products are located. In recent years, growth in the UK and Western European ethylene production sectors has been driven by marginal investments via de-bottlenecking or incremental expansion at existing sites. So although there have been expansions through process improvements, growth in European ethylene supply has not kept pace with growth in demand, according to industry sources. The result is that in 2004, W estern European crackers were operating at a loading rate of around 91% of nameplate capacity. Loading rates in Benelux and Germany were just above 95% of nameplate, whereas the average rate for the rest of Europe was well below 90%. At times during each year, loading rates peak as the result of cracker shutdowns. 4 Ethylene production5 Average demand for ethylene is expected to grow by only 11.5 per cent a year in Western Europe. However in late 2005 announcements were made by three operating companies for significant capacity increases: one major expansion (by the addition of a new furnace) and two new ethylene plants, adding a total of 1.5 million tonnes/year ethylene capacity.
BASF, Antwerp, Belgium will expand the capacity of its naphtha steam cracker at its site in Antwerp. The expansion project will be carried out during the next regular turnaround of the plant in Autumn 2007 (major plant turnarounds are generally conducted on a five yearly cycle and last from four to six weeks, at which time the plant is completely shutdown). The investment of about 200 million will raise ethylene capacity from 800,000 metric tonnes per year to 1.08 million metric tonnes per year making the plant the largest single-train steam cracker in Europe. Ineos, W ilhelmshaven, Germany plans for an 800,000-metric-tonne facility by 2008 or 2009. SABIC, Geleen, Netherlands plans to build a new cracker which adds another 400,000 tonnes of ethylene to European capacity levels. More importantly the proposed cracker will be a propylene machine that will use metathesis technology to produce up to 620,000 tonnes of propylene. 6
Propylene production7 Globally, propylene consumption is forecast to grow at 1.73Mt over the next 4 years, reaching 17.15Mt in 2009. This represents an average annual growth of 350kt/year (2.2%/year), (Western European propylene consumption was 15.42Mt)
4 Ethylene production, consumption and trade balance 2004, www.petrochemistry.net, CEFIC 5 Aiming for Number One, Chemical & Engineering News, December 7, 2005 6 Metathesis processes produce propylene by reacting ethylene with 2-butenes and can be can be economical when
propylene is valued equal to or higher than ethylene

7 Propylene production, consumption and trade balance 2004, www.petrochemistry.net, CEFIC
DTI
Western European propylene capacity is forecast to grow by 1Mt over the next 5 years, reaching 18.4Mt in 2009. This represents an average annual growth of 0.2Mt/year (1.1%/year). Of this increase, 0.55Mt is expected to come from steam crackers, 0.07Mt from refineries, 0.05Mt from dehydrogenation, and 0.35Mt from metathesis. A key issue in the world propylene market is the sourcing of propylene with nearly 65% of the worlds supply produced as a by-product of ethylene from steam crackers. However, demand for propylene is growing at a faster rate than demand for ethylene, resulting in an imbalance and a lack of propylene supplies. Refineries are the other major source of propylene but most have already maximized readily available propylene (significant capital investment is necessary for additional propylene). While it is never certain whether any of the planned cracker announcements will actually take place, the global predicted shortfall in propylene will certainly favour the development of new capacity in W estern Europe. Building new capacity in the Middle East (where ethane is the predominant feedstock) will not entirely alleviate this shortage due to the favourability of ethylene over propylene when cracking ethane feedstock. (Ethane-based crackers produce very little propylene such that it is generally uneconomical to recover the propylene as a product.) While propylene can be produced through additional processing, metathesis, this requires further energy input. In general such plants become economical only when propylene is valued more than ethylene. Although there are no plans for a new cracker in the UK, due to the falling levels of North Sea gas, it is probable that, should a new development be announced at some point in the future, it would be naphtha based. It is also probable that any furnace expansions announced on UK crackers will be based on the existing feedstocks employed at the specific site. Carbon Black production The carbon black market is expected to track growth in rubber demand particularly in the tyre industry. As with petrochemicals carbon black manufacturing has been moving east in recent years, with China becoming a significant manufacturer. In the UK, with no expansions or new facilities planned, it appears reasonable that projected growth in demand will be met by extensions at existing facilities or imports. 1.2.2 Known or likely market developments
In Enviros opinion, it is unlikely that major changes (new entrants or closures) will occur in the UK petrochemicals sector within the foreseeable future. No major expansions have been announced and it is very unlikely that any new crackers will be built in the near to medium term. Future market developments within the petrochemical industry must be considered within the context of a global commodity industry in which current forecasts about long-term trends in oil prices raise the prospect of a major shake-up in the industry. Amidst all the predictions, one possible scenario is that oil prices will stay above an average of $40 per barrel for a lengthy period, particularly since the emerging economies of China and India will continue to expand relatively quickly. An average oil price at or above $40 for several years would be sufficient to have a major impact on the structure of the global petrochemical industry and the position
DTI
of the sector within the worldwide chemical industry. market developments are provided in Appendix 1. 1.2.3 Product substitutes for petrochemicals
Further details on global
An emerging source of competition for existing petrochemicals is material coming from renewable resources, whose long-term prospects have been considerably improved by large increases in oil prices. In the packaging sector, producers of polylactic acid claim that the crop-derived polymer is now competitive in terms of both cost and performance with petroleumbased materials and fibres. Oleochemicals such as glycerine (a potential substitute for anti-freeze) have recently been as much as 500 per tonne cheaper than competing petrochemicalderived glycols. The main impetus behind this fall in glycerine prices has been a big surge in output of bio diesel (glycerine is a by-product of the transesterification of vegetable oils into biodiesel), particularly in Europe which is expected to produce over two million tonnes this year. While this is very much an emerging market and unlikely to significantly replace major ethylene/propylene production volumes even in the long term, higher oil prices will increase interest in this area from a purely economic point of view. 1.2.4 Product substitutes for carbon black
The most significant substitute for carbon black in rubber production is precipitated silica (of which there is some production capacity in the UK). However, such capacity will come under the inorganic chemical industry and therefore will be outside the scheme (unless boiler and other emissions are included under other combustion). In recent years, up to 25% of carbon black production volumes have been replaced with silica to create what is commonly called a green tyre (which reduces the rolling resistance of tyres significantly, improving traction, wear, and fuel efficiency). However, the material cost of adding silica is nearly twice the cost of carbon black, and the cost of processing and compounding the materials is higher.
DTI
2.
TECHNOLOGY OPTIONS AND EMISSIONS FACTORS

In this section we discuss the different technologies and processes used to manufacture the products described above and how they will impact on carbon dioxide emissions (section 2.1 steam cracking and 2.2 carbon black).
2.1
Process options for steam cracking
Steam cracking is a process by which saturated hydrocarbons are broken down into smaller, often unsaturated, hydrocarbons, principally to produce olefins (ethylene and propylene). A gaseous or liquid hydrocarbon feed like gas oil, naphtha, liquid petroleum gas (LPG) or ethane is diluted with steam and cracked in a furnace (also referred to as a pyrolysis furnace or cracking furnace) at high temperatures. The gases leaving the furnace are a mixture of ethylene product and various coproducts (propylene, mixed C4s, pyrolysis gasoline or pygas) and other byproducts. The cracked gases are cooled to stop the reaction process and the various product streams separated and purified through a series of compression, chilling and fractionation processes. 2.1.1 Product options for steam cracking
Steam crackers produce ethylene the most dominant primary petrochemical almost exclusively by on-purpose production (meaning that steam cracker plants were originally built with the primary purpose of producing ethylene while other coproducts are a secondary, essentially incidental, feature of the process 8). Steam crackers can use a variety of hydrocarbon feedstocks, of which naphtha is the most common in Europe. In the UK, two plants crack ethane as feedstock, while another cracks either heavy naphtha or gas oil with the final two plants cracking mostly naphtha with some LPGs. Approximately 30-35% of the output from the naphtha cracking process is ethylene. The remainder comprises other olefins and aromatics as well as a proportion of fuel based by-products, including fuel gas, fuel oil and raw (pyrolysis) gasoline. Alternative ways of producing olefins include detailed variations on the cracking process. Ethylene is typically obtained from non-catalytic thermal cracking of saturated hydrocarbons such as ethane and propane in the presence of steam or alternatively from the steam cracking of heavier liquids (such as naphtha and gas oil). Steam cracking produces a variety of other products, including diolefins and acetylene. The latter is costly to separate from the ethylene, usually by extractive distillation and/or selective hydrogenation of the acetylene back to ethylene. Steam is typically used in the process because it favours the formation of product (ethylene) in the reaction. It also reduces the formation of undesirable heavy compounds and coke on the furnace tubes which would reduce product yields. The energy used in steam cracking will depend on a number of factors including the feedstock chosen lighter feedstock such as ethane is cracked at a lower temperature range. The severity of the cracking operation (which is dependent on the desired product ratios and is a function of the temperature and the residence time of the feedstock in the furnace) and the furnace design/process technology employed also differs for plants that crack gas as a feedstock. It has been estimated that approximately 65% of the total energy requirement for a naphtha fed steam cracker is consumed in the pyrolysis furnace section. The same figure for an
8 This view has changed in recent years with increasing demand for propylene
DTI
ethane based cracker is 47%. 9 Additionally, 95% of process energy demand in naphtha steam crackers can be met through energy integration of fuel gas (for the furnace), flue gases and waste heat, (while for ethane crackers it is 85%). However, published sources of energy consumption in steam cracking plants account for the sum of fuel, steam and electricity in primary terms. Therefore, in order to prevent double counting of emissions from imported energy streams (ensuring that only emissions from the pyrolysis furnace are accounted for in the benchmark) it is necessary to discount published figures (which consider primary energy requirement) by a factor of 65% and 47% respectively for naphtha and ethane based crackers. In gathering data from operators for the purposes of this study, we have also ensured that the data provided relates only to those emissions which are generated within the battery limits. 2.1.2 Technology
ExxonMobil Chemical commercialised steam cracking in the early 1940s, however, today a small number of international technology contractors licence the equipment employed in steam crackers to operators. The designs are broadly similar but modifications will often be made post start-up in order to optimise the plant performance to local conditions. While most proprietary designs concern the furnaces, there may also be variations in the operating pressures and temperatures of the fractionation columns, refrigeration systems and the use of turbo expanders. Choice of technology Discretionary choices for cracker technology are limited by the choice of location of the cracker and the availability of a suitable cheap feedstock. W ith the depletion of North Sea gas reserves it is unlikely that new ethylene capacity in Western Europe will use ethane. It is also likely that the site of any new plants will be located close to downstream plants these are mostly located along the ethylene pipeline (the ARG system) in NW continental Europe (Rotterdam, Antwerp and NW Germany). While new ethylene consuming plant is planned in the UK, it is expected that this will only result in less ethylene exports to Europe and will not require additional capacity to meet the increased demand. Conventional olefins production technology (by thermal steam cracking) appears to have reached a stage of maturity in which improvements in yield and product selectivity are becoming increasingly difficult. For the conventional process, ethylene yields are improved by raising the cracking temperature and reducing residence time, i.e. increasing the cracking severity. However, these severe operating conditions are constrained by the metallurgy of the cracking tubes and rapid coking tendency in the cracking coils. At present, the maximum skin temperature for cracking tubes made of Cr-Ni alloys is about 1100C (2010F). Recent developments in cracking furnace design include the use of ceramic materials for ultra-high temperature cracking. Silicon carbide ceramics can withstand temperatures up to 1400C, have high conductivity and low surface catalytic activity towards coke formation. It is believed the technology is competitive when compared to conventional cracking in metal tubes.
9 Energy Efficiency and Innovative Emerging Technologies for Olefin Production, T. Ren, Utrecht University, The
Netherlands, European Conference on Energy Efficiency in IPPC Installations, October 2004
DTI
10
Other innovative developments that have taken place in stream cracker design (particularly within the furnace area) include the ExxonMobil Chemical Company and Kellogg Brown & Root (KBR) Selective Cracking Optimum Recovery (SCORE) ethylene process, which is claimed to offer producers improved efficiency, higher selectivity, and lower capital cost. The improved efficiency is based on higher cracking severity (employing lower furnace residence time and higher temperatures leading to higher olefins yields) and lower pressure product recovery systems thus reducing capital cost and downstream compression requirements. ABB Lummus has also developed a short residence time pyrolysis furnace (SRT Furnace) which is claimed to offer lower costs, higher selectivity to olefins and longer run lengths. Other technology companies (Technip-Coflexip, Linde AG and Stone & W ebster) have developed state of the art steam cracking processes. While designs differ, specific focus has been placed on coil related furnace features including advanced furnace materials, as well as the areas of downstream compression and separation sections. It has been estimated that 20% energy savings are possible in the pyrolysis section (and a further 15% in the compression and separation sections) of steam crackers employing these new technologies. 10 Table 4 below details the specific energy consumption for the latest naphtha based steam cracking technologies developed by the various licensors. These figures account for fuel, steam and electricity in primary terms that are used for reactions and subsequent processes.
Table 4 Energy consumption from state of the art naphtha steam cracking technologies 11
Licensors Ethylene yield (wt%) SEC (GJ/tonne ethylene)
Technip 35%
ABB Lummus 34.4%
Linde AG 35%
Stone & Webster n/a
KBR 38%
18.8-20 (best) or 21.6-25.2 (typical)
18 (with gas turbine), 21 (typical)
21 (best)
20-25
No data
Given the specific energy consumption for these state of the art plants, an average figure across the various operators is 20.2GJ/tonne ethylene and taking a HVC yield of 60.7% (based on the ABB Lummus plant, compared to a typical HVC yield of 50-55% for a naphtha steam cracker), this equates to a specific energy consumption of 12.26GJ/tonne HVC. Alternatives to steam cracking An alternative route to improving the performance of steam cracking is to carry out the reaction in the presence of a catalyst. Catalytic cracking, particularly of liquid feeds such as naphtha and gas oil, can achieve higher olefin yields at moderate reaction conditions coupled with reduced energy consumption. Both ABB Lummus and UOP have commercialised the catalytic dehydrogenation of propane to propylene. A similar concept is possible for ethane dehydrogenation,
10 Energy Efficiency and Innovative Emerging Technologies for Olefin Production, T. Ren, et al Utrecht University, The

11 Energy Efficiency and Innovative Emerging Technologies for Olefin Production, T. Ren, et al Utrecht University, The
DTI
11
but to date an economically attractive commercial process has not been developed. However, recent work in this area has produced some promising results. Various companies are engaged in this research including Dow and BP. The Electric Power Research Institute (EPRI) in the US has also reported on promising technologies for ethylene production in the long term. One example is the development of oxidative cracking of ethane to produce ethylene. The new technology eliminates the formation of NO x , reduces carbon dioxide production by a factor of 10, and has the potential for significant energy savings. This approach may have competition from microwave synthesis, which selectively breaks the key chemical bonds in ethane. While this technology is expected to offer a further performance improvement over conventional technology, oxidative cracking is expected to be more familiar to workers in chemical plants and may therefore be the process of choice. 12 Table 5 below summarises the current state of some of the recent developments in lower olefins production. Currently the catalytic olefin technologies are not fully matured or economically competitive in comparison with state-of-the-art naphtha crackers and while commercial tests are underway we would not expect this technology to significantly replace ethylene/propylene capacity within the medium term (5 year horizon).
12 Electricity Technology Roadmap, 2003 Summary and Synthesis, The Electric Power Research Institute, Palo Alto,
CA, Product No. 1010929, 2003
DTI
12
EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMICALS Innovative olefin technologies 13 Gas stream technologies Feed Ethane and other gas feedstock Ethane Oxidative Dehydrogenation Ethane and oxygen Propane Oxidative Dehydrogenation Propane and oxygen Catalytic cracking of naphtha Naphtha Hydropyrolysis of naphtha Naphtha Byproduct upgrading (C4-9) C4-c9 (from steam cracking, refinery, etc.) Catalytic Pyrolysis Process (CPP) Crude oil, refinery heavy oils, residues, atmospheric gas oil, vacuum gas oil Ethylene/ propylene Riser and transfer line reactor
Table 5
Olefins Reactor
Ethylene Shockwave, combustion gas; shift syngas; plasma; etc. n/a 625-700 Shockwave: ca. 8-10GJ/t ethylene/ HVCs Shockwave: highest ethylene yield ca. 90%
Ethylene Alloy Catalyst Reactor with hydrogen co feed Mordenite zeolite 900-1100 Dow: ca. 1012GJ/t ethylene/ HVCs Dow: final ethylene ca. 53% if weighted against ethane and oxygen Lab
Propylene Both a stem reformer and an (oxy-reactor); or, cyclic fixed-bed Zinc and calcium aluminate based 550=600 Uhde: ca. 810GJ/t propylene; ca. 8-10GJ/t HVCs Uhde: propylene final yield ca. 78% if weighted against propane and oxygen Commercially available
Ethylene/ propylene Fluidized bed
Ethylene Reactors with hydrogen co feed but less steam n/a 785-825 Blachownia: ca. 16-20GJ/t ethylene and ca. 10-13GJ/t HVCs Blachownia: ethylene yield 3640% and HVCs yield 70%
Propylene Fixed or fluidized bed
Catalyst Temperature o C Process energy (SEC)
Zeolite (or various metal oxides) 650-680 KRICT: ca. 19GJ/t ethylene and ca.10GJ/t HVCs KRICT: ethylene 38%, propylene 17-20%, aromatics 30% and HVCs 73% Pilot plant
Zeolite 580-650 n/a
Acid zeolite (Lewis sites) 650-750 CPP: ca. 35GJ/t ethylene and ca. 12GJ/t HVCs CPP: ethylene 21%, propylene 18%, C4 11%, aromatics 15% and HVCs yield 60% Lab and near commercialisation
Yield (wt.%)
UOP: total propylene yield from steam cracking is 30% and HVCs yield 85% Commercially available
Current status
Lab
Commercially available
13 Reproduced from Energy Efficiency and Innovative Emerging Technologies for Olefin Production, T. Ren, Utrecht University, The Netherlands, European Conference on Energy
Efficiency in IPPC Installations, October 2004
DTI
13
EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMICALS
As stated above, propylene can also be produced by the catalytic dehydrogenation of propane. However production of propylene in this way is only of interest to producers that wish to increase the production of propylene relative to ethylene and who have ready access to LPG. Other technologies for increasing the production of propylene relative to ethylene include the metathesis of ethylene and butylenes. While many of these new technologies have yet to be commercially developed, they have the potential to offer reduced carbon emissions while still falling under the remit of the EU ETS petrochemical sector. Propylene can also be produced by the refinery process of enhanced catalytic cracking or by deep catalytic cracking. Plant configuration There are many variations of plant configuration to accommodate the feedstock selection and desired products, but all steam crackers include a number of common components:
A furnace section (in which suitable feedstocks are cracked in the presence of steam). A primary fractionation and quench system (in which heavy hydrocarbons and water are removed). A compression section (including acid gas removal). A fractionation section at both cryogenic and moderate temperatures (in which the various products are separated and purified).
Some cracker sites will have more than one cracking train (i.e. where there are two distinct furnace lines and separation/purification equipment), such as the Ineos site at Grangemouth. Best practice The steam cracking process is the only large scale process currently available for production of the full range of lower olefins (ethylene, propylene and butanes/mixed C4s) and is generally regarded as the best available technology. BAT for the design of steam crackers includes components related to a high level of containment of equipment and piping systems to minimise fugitive emissions, as well as a high level of energy integration of energy recovery systems (with the aid of advanced pinch analysis 14 ). Although the BAT is not prescriptive in terms of carbon dioxide abatement the techniques are likely to lead to reduced carbon dioxide output, and, while there is no guarantee, it is highly likely that due to the high level of energy costs for steam cracking, operators will optimise energy usage. Energy represents 60% of the variable costs and so has always been a very important consideration in plant design/operation. Moreover, modern plants have highly integrated energy recovery systems, employing heat-pumps, gas turbines/CHP facilities, whereas older plants have often been retrofitted with modern high-selectivity furnaces.
14 Pinch technology presents a simple methodology for systematically analysing chemical processes and the surrounding
utility systems with the help of the First and Second Laws of Thermodynamics
DTI
14
2.1.3
Plant boundary limits
Another site specific factor that can affect energy consumption and emissions in the petrochemicals sector is the plant boundary or battery limits. These can be dependent on a number of operations that may be directly associated with olefins production, including:

Feed pre-treatment; Butadiene recovery or hydrogenation; Gasoline heat soaking or hydro treatment; Benzene concentration or extraction; and Tar (residue from heavy gas oil feeds) handling.
Fully integrated plants using naphtha or gas oil feedstock may include some or all of these associated processes within the cracker battery limits. They may also be undertaken in separate facilities that also process streams from other plants. Under the current sector definition for petrochemicals these facilities would be excluded from the EU ETS, although they may be partially covered via other combustion or the refineries definition. None of the above associated processes have been considered as part of this benchmark definition. Integrated olefin plants may also recover vent and purge streams from other units (e.g. polym er plants) which eliminates the requirement for waste disposal. Additionally, whilst acid gas removal (where gases such as H2S (Hydrogen Sulphide) and small levels of carbon dioxide are removed from the cracked gas stream) via a caustic (sodium hydroxide) scrubber will always be included within the battery limits, the treatment/disposal of the spent caustic (where carbon dioxide emissions may occur, through incineration of the spent caustic) may or may not be handled off-site. This can have an impact on actual emissions. 2.1.4 Raw materials (feedstocks)
Feedstock selection is influenced by many factors including location, desired products and price. The selected feedstock largely determines the range and quantities of the co-products. Practice in Europe In W estern Europe, liquid naphtha (obtained from crude oil refineries) is by far the most important raw material with around 75% of ethylene production based on this feedstock. Other feedstocks are less significant and include gas oil, butane, ethane and propane. Only a very small number of crackers in Europe actually have access to ethane as a feedstock. Practice in the UK The UK is somewhat of an anomaly in this respect, with two of the five operating plants (taking Grangemouth as two distinct crackers) designed as gas crackers, cracking mostly ethane. Ethane is extracted from natural gas by cryogenic liquefaction and there are few locations in Europe where gas is sufficiently concentrated to allow economic recovery (i.e. with access to pipeline supplies from North Sea production fields, as is the case in Eastern Scotland). Ethane is also
DTI
15
difficult to transport as it requires special refrigerated ships or high pressure pipeline systems, which further limits its use as a feedstock. Best practice Ethane feedstock produces the highest yield of ethylene and requires lower plant capital costs. It also produces lower yields of recoverable co-products in comparison to plants cracking naphtha or gas oil. Ethane feedstock is generally regarded as the most efficient in terms of plant emissions which tend to be lower than from plants using naphtha or gas oil feedstock. However the BREF for lower olefins does state that it is not possible to determine a BAT feedstock. As mentioned in Section 1.2.1, without additional processing (requiring additional energy input), cracking ethane as a feedstock produces very little propylene that can be recovered economically. It is widely recognized that naphtha steam crackers are the largest current source of propylene. The yield of propylene from a naphtha cracker is about 15 wt-% of the naphtha feedstock while the yield of ethylene is about twice the propylene yield. 15 Because ethylene has historically averaged a higher market price than propylene, ethylene producers have primarily built naphtha crackers to meet their ethylene demands and recovered propylene as a co-product. Consequently naphtha crackers can currently be regarded as the best source of both ethylene and propylene, this is also true in terms of energy consumed in production - while demand for propylene is enhancing the attractiveness of propylene production by alternative routes (metathesis and propane dehydrogenation), they require additional energy input, shown in Table 6. In addition, the cost of propylene needs to be significantly higher to stimulate additional capacity for these dedicated processes.
Table 6 Additional energy use in propylene manufacture by alternative processes 16
Metathesis Net Process Energy (Btu/lb propylene) Net Process Energy (GJ/tonne propylene) 2,273 5.29
Dehydrogenation of Propane 2,746 6.39
2.2
2.2.1
Process options for carbon black

Technology
Four processes are currently used to make carbon black. These have been outlined in the IPPC BREF for this product and are outlined below:
Furnace black process aromatic oils (based on crude oil) are burned in a reactor, producing carbon black and tailgas. After cooling, the carbon black is separated from the tailgas, densified, and processed into pellets of varying grades/sizes. This process is the most widely used globally, comprising over 95% of all carbon black production.
15 On Purpose Propylene Technology Developments, UOP LLC, Presented at the ARTC 8th Annual Meeting, April 2005 16 The Propylene Chain, US Department of Energy, Industrial Technologies Program
DTI
16
Thermal black process natural gas is burned in a reactor to produce carbon black and tailgas, and is then processed in a fashion similar to the furnace black process. Acetylene black process similar to the thermal black process, except that acetylene is the raw material used, and the carbon black is not processed into pellets. Lampblack process one of the oldest carbon black processes. An aromatic oil (based on coal tar) is heated in a flat cast-iron pan to produce carbon black.
Two of these (furnace black and thermal black) produce nearly all of the world's carbon blacks, with the furnace black process being the most common. We also discuss below an alternative route for the production of carbon black. This process, however, is not in current commercial production. Furnace black process The furnace black process uses heavy aromatic oils as feedstock. The production furnace uses a closed reactor to atomize the feedstock oil under carefully controlled conditions (primarily temperature and pressure). The primary feedstock is introduced into a hot gas stream (achieved by burning a secondary feedstock, e.g. natural gas or oil) where it vaporizes and then pyrolyses in the vapour phase to form microscopic carbon particles. In most furnace reactors, the reaction rate is controlled by steam or water sprays. The carbon black produced is conveyed through the reactor, cooled, and collected in bag filters in a continuous process. Residual gas, or tail gas, from a furnace reactor includes a variety of gases such as carbon monoxide, carbon dioxide and hydrogen. Most furnace black plants use a portion of this residual gas to produce heat, steam, or electric power. Thermal black process The thermal black process uses natural gas, consisting primarily of methane or heavy aromatic oils, as feedstock material. The process uses a pair of furnaces that alternate approximately every five minutes between preheating and carbon black production. The natural gas is injected into the hot refractory lined furnace, and, in the absence of air, the heat from the refractory material decomposes the natural gas into carbon black and hydrogen. The aerosol material stream is quenched with water sprays and is filtered in a bag house. The exiting carbon black may be further processed to remove impurities, pelletised, screened, and then packaged for shipment. The hydrogen off-gas is burned in air to preheat the second furnace. Kvrner process For the carbon black industry, Kvrner has been developing a process called the "Kvrner Carbon Black and Hydrogen Process" (KCB&H). Kvrner's first commercial plant based on this process is in Canada and started production in June 3 of 1999 producing 50 million m hydrogen and 20,000 metric tonnes of carbon black per year. In a high temperature reactor, the temperature necessary for splitting hydrocarbons is supplied by a plasma burner that uses re-circulated hydrogen from the process
DTI
17
as plasma gas (and electricity to form the plasma). A heat exchange system heats up the process flow, while the surplus heat is used in steam production. There are no emissions from this process, which also makes it specially suited to hydrogen production. The raw material for this process is hydrocarbon compounds that originate from a range of sources from light gases to heavy oil fractions. The Kvrner process produces no emissions, while the traditional process for producing carbon black is extremely carbon dioxide emissions intensive. The plant was decommissioned in 2003 and it is not clear whether the economic viability of this technology was ever proven.
DTI
18
3.
REVIEW AND DISCUSSION OF THE AVAILABLE DATA

We have used information provided by UK operators but given the limited data set provided, we have supplemented this information with published information. It is important to bear in mind the limited scope of the data when considering the analysis presented below.
3.1
Technology benchmarks and sources
In this section we review the published information available to inform our development of the Phase II benchmarks. 3.1.1 Energy use
Steam crackers The European Commission IPPC Reference Document on Best Available Techniques in the Large Volume Organic Chemical Industry (February 2003) quotes energy consumption and carbon dioxide release figures obtained through the European Chemicals Industry Association (CEFIC). CEFIC has collected energy information from its members under a strict confidentiality agreement permitting anonymous analysis of the industry as a whole. The BREF does state that plant by plant comparison is extremely difficult for energy consumption due to feedstock effects, site energy integration, size and the age of the plant (while our report is concerned with new entrants, it is likely that new entrant capacity may come in the form of expansions at existing facilities). All of these factors (amongst others) influence the energy consumed and thus the carbon dioxide emissions. In addition, the CEFIC energy figures cover all forms of energy use (i.e. fuel burned in both boilers and processes), rather than the specific emissions sources we understand would be captured under the EU ETS. W hile all sources should be captured for Phase II, they may be split by different category (e.g. between the petrochemicals and other combustion) definitions. It is therefore difficult to base benchmarks for emissions within the petrochemical sector on the basis of the published energy benchmarks for the sector, as there is likely to be double counting. To avoid such a scenario it would be appropriate to ensure benchmarks are set for specific pieces of emission generating equipment. For example, for petrochemicals, the primary source is the cracking furnace, therefore a specific benchmark should be used for this unit. The table below (Table 7) summarises the published CEFIC data. GJ/tonne ethylene means that all energy use is allocated only to ethylene and all other byproducts are effectively produced for free in terms of energy use 17. When ethane cracking is compared against naphtha cracking, the ethylene yield will be higher, but this overlooks the fact that naphtha cracking also yields a significant volume of valuable co-products. We therefore consider GJ/tonne HVCs to be the more appropriate indicator.
17 Energy Efficiency and Innovative Emerging Technologies for Olefin Production, T. Ren, Utrecht University, The
DTI
19
Table 7
Energy benchmarks steam crackers
Feedstock Ethane Naphtha Gas Oil

Source CEFIC, 2000
GJ/tonne ethylene 15-25 25-40 40-50
GJ/tonne High Value Chemical (HVCs) 12.5-21 14-22 18-23
The data shows that, depending on the feedstock, energy use can range from 50GJ/tonne ethylene (using gas oil) to 15GJ/tonne ethylene using ethane (a third of the maximum level). It should also be noted that since cracking ethane also results in lower volumes of co-products than when a liquid is cracked, the down stream process requirement for separating product and co-product is typically simpler and less energy intensive for ethane fed crackers. 18 Table 8 below summarises typical ranges of ethylene product and co-products for a particular cracking technology and various feedstocks.
Table 8 Furnace performance yields for various feedstocks 19
Pyrolysis yields wt % Hydrogen Methane Acetylene Ethylene Ethane MAPD Propylene Propane C4s C5+ Total
Ethane 3.93 3.82 0.43 53.00 35.00 0.06 0.89 0.17 1.59 1.11 100.00
Propane 1.56 25.30 0.64 39.04 3.94 0.53 11.34 5.00 5.39 7.26 100.00
Full Range Naptha 0.91 15.70 0.78 30.80 3.30 1.00 14.00 0.28 8.70 24.53 100.00
Light AGO 0.63 11.20 0.47 26.50 3.40 0.80 13.40 0.25 8.80 34.55 100.00
For High Value Chemicals (HVC), the range of energy consumption by feedstock is narrower in absolute terms, but still broad in relative terms, from 12.5GJ/tonne HVCs to 23GJ/tonne HVCs (twice the minimum level). The variation in energy consumption for a particular feedstock evident in Table 8 above is a result of variations in feedstock quality (e.g. light vs. heavy naphtha) as well as variations in cracking severity and downstream processing.
18 This will result in additional carbon dioxide emissions, however these will be captured under other combustion 19 Reproduced from ABB Lummus SRT Pyrolysis Furnace Design Characteristics
DTI
20
Carbon black Energy use within a carbon black furnace is directly related to the raw material (or feedstock) used. Small amounts of natural gas are used during the start-up process. However, post start-up, the energy is entirely supplied by the raw material and waste heat recovery is used for energy requirements at other sections of the plant.
3.2
Fuel emissions factors
In this section we describe the carbon emissions factor for the fuels used in petrochemicals operations. Steam crackers As stated above, the primary fuel employed in the cracking furnaces is residue fuel gas (consisting of methane and hydrogen). The emissions factor for refinery fuel gas as used for the Phase I new entrants benchmark is shown in the Table 9 (first row) below. The second column shows the emissions factor in the units in which they are typically reported; the third column shows them in standardised units of kgCO2/fkWh.
Table 9 Published emissions factors for fuels used in steam crackers
Fuel Refinery (fuel) Gas Still gas (fuel gas) Refinery gas
Emission Factor 0.2 kg CO2/kWh 0.0642 t CO2/MMBTU 66.7 kg CO2/GJ
Emission Factor (kg CO2/kWh) 0.2 0.2214 0.24012
Source: New Entrants Benchmark Spreadsheet, FES, DTI website / American Petroleum Institute Comparison of Carbon Dioxide Emission Factors / The IEA, 2002.
The table below (Table 10) details the actual fuel emission factors for those sites that have responded to our data request. As stated above, the consideration of carbon dioxide emissions purely on a per tonne ethylene basis can be misleading (when comparing crackers utilising different feedstock). Consideration of emissions on a per tonne HVC basis is therefore developed in the analysis in Section 3.4.
Table 10 Specific Emissions Factors (Furnace) UK Steam Crackers
Fuel UK Plant Average
Emission Factor (kg CO2/kWh) 0.17
Emission Factor (tonne CO2/tonne ethylene 1.145
Source: Enviros data survey 2006
A study conducted at the University of Utrecht as part of its Non Energy Use (NEU) CO2 Network into the default carbon dioxide emissions from fuel use in steam crackers gives specific emission factors based on feedstock type as shown in Table 11 below. These figures are broadly in line with those observed from the UK plants, and while they are published on a per tonne ethylene basis it is difficult to convert these to a per tonne HVC basis without knowing the ultimate yield of HVCs. However, based on estimated ethylene production as a proportion of all
DTI
21
HVCs of 50%, 44%, 95%, 73% and 69% for naphtha, gas oil, ethane, propane and butane respectively 20 we can calculate emissions on a per tonne HVC basis.
Table 11 Difference in emissions from different feedstocks
Naphtha Specific CO2 emissions from fuel use steam crackers (tonne CO2/tonne ethylene) Specific CO2 emissions from fuel use in steam crackers (tonne CO2/tonne HVC) Specific CO2 emissions from state of the art naphtha cracker (tonne CO2/tonne HVC) 21 Specific CO2 emissions from fuel use steam crackers (kgCO2/kWh) 22 1.7
Gas Oil 2.2
Ethane 0.8
Propane 1.0
Butane 1.1
0.85
0.97
0.76
0.73
0.69
0.68
n/a
n/a
n/a
n/a
0.153 0.245
0.158 0.198
0.115 0.192
0.133 0.200
0.147 0.220
Source: University of Utrecht, Neelis et. al and Enviros calculated
Carbon black Emissions from the carbon black process are in the form of emissions from the feedstock (rather than a fuel). It is difficult to make an accurate energy balance for the furnace black process because it is not known which part of the feedstock is converted into product carbon black, energy recovery takes different forms (internal and external to the plant) and feedstock and operating conditions vary depending on production grade. According to the BREF for carbon black, the furnace tail gas for a rubber black 3 furnace black plant has a calorific value of 1.7-3.8MJ/m with production of 10,000 m3/tonne carbon black. This equates to 17-38GJ/tonne carbon black production. The BREF also details an additional 12-27GJ/tonne carbon black of losses (e.g. heat loss through flue gases), which if combined with the energy content of the tail gas, and assuming an emissions factor of 0.19 kgCO2/kWh (natural gas emissions factor), we can calculate the total specific carbon emissions for carbon black as shown in Table 12 below. The variation in these figures can be accounted for by differences in feedstock (mixtures of a variety of substances, gaseous or liquid hydrocarbons, which can be vaporised represent the raw materials preferable for the industrial production of carbon black, obtained from certain fractions of coal tar oils and petrochemical oils from refining or ethylene production from naphtha) and operating conditions to produce different carbon black grades.
20
NERA / Entec report on the expansion of EU ETS to the petrochemical sector, Appendix 4, Table A4.1 state of the art naphtha cracker derived in Section 2.1.2 above
21 Based on average naphtha carbon dioxide emission factor (kg/kWh) in Table 11 and specific energy consumption for a 22 Based on energy consumption bands for steam crackers with different feedstocks, Table 7 and assuming propane and
butane consumption bands lie between those of ethane and naphtha (18-27GJ/tonne ethylene). Because Table 7 considers energy consumption for the entire plant, these figures should be discounted (5% for naphtha and 15% for ethane) to reflect imported energy requirements
DTI
22
Table 12
Specific Carbon Emissions for carbon black
Rubber Black Process Specific emissions (tonne CO2/tonne Carbon Black) 1.53 3.43
Carbon Black (NEAT Model) 1.77
Source: Carbon Black, IPPC BREF, Neelis et. al and Enviros calculation
3.3
Utilisation
Steam cracker Petrochemical plants are operated on a continuous (24x7x365) basis for runlengths of up to five years. The capacity of steam crackers is defined in terms of capacity for ethylene; however carbon dioxide emissions result from the production of both ethylene and other high value chemicals. We have therefore taken into account total output to calculate a load factor. The following table (Table 13) summarises the output data received from operators, expressed in terms of site specific load factors based on the ethylene production per tonne of ethylene capacity and a capacity factor based on the tonnes HVC per tonne of ethylene capacity.
Table 13 Average Site Specific Capacity Factor (Steam Cracker) based on 8 years historical data submitted by survey respondents for UK sites
UK Plant Average Average load factor (tonne ethylene produced/tonne ethylene capacity) Average fraction of ethylene produced per tonne of HVC (%) Average Capacity Factor (tonne HVC per tonne of ethylene capacity)
0.67 47%
1.43
The average capacity factor is calculated from the ethylene production per tonne of ethylene capacity and we have taken the average across the sites surveyed. However, the load factor data may be unrepresentative due to a range of events, including onsite incidents that affected the running of the installations for which we have information. The Chemicals Industry Association (CIA) noted in their response to the consultation on this report that those incidents may have introduced a downward bias to average occupancy rates. W e have therefore used a load factor for steam crackers in Western Europe as a whole, to be more representative of typical operating levels. Table 14 below shows historic operating data published by CEFIC for the period 2000-2004. It indicates an average EU wide load factor of 89% as compared to the value based on the UK data of 67%.
DTI
23
Table 14
Steam cracker load factors for Western Europe
2000 Capacity 21,610
2001 22,126 19,624 0.887
2002 23,166 20,159 0.870
2003 23,328 20,685 0.887
2004 23,594 21,408 0.907
2000-04
Production 19,402 Load factor 0.898
0.89
Source: CEFIC. Note: includes data for approximately 51 crackers in Western Europe submitted in a survey by APPE (the Association of Petrochemicals Producers in Europe). The data are published at http://www.petrochemistry.net/.
These data do not differentiate between plant of different ages; it is therefore not possible to comment on whether, or to what extent, the resulting load factors are affected by the commissioning of any new facilities within this group of installations. Carbon black We have calculated a capacity factor for the UK operators based on the carbon emissions against calculated capacity emissions on the basis that the plant was operating at maximum practical utilisation rate of 95%. As for steam crackers, the limited data available means that it would not be possible to adjust the information to exclude commissioning periods from the data set.
3.4
Emissions Data
Steam cracker The site specific emissions factors for steam crackers provided in the table below (Table 15) are given on a per tonne ethylene basis and a per tonne high value chemical basis. It is more appropriate to use the HVC basis for benchmark calculations as this will smooth any distortions arising from operating conditions due to differences in feedstock between plants. The results are consistent with the literature (on a per tonne ethylene basis) in that specific emissions for the Naphtha plant on a per tonne ethylene basis are much higher than for the gas plant. However when smoothed on a per tonne HVC basis, the figures are lower than those calculated in the NERA / Entec report on the expansion of EU ETS to the petrochemical sector, Appendix 4, Table A4.3.
Table 15 Average Specific Emissions Factors Steam Crackers
UK Plant Average Specific emissions t CO2/t ethylene Specific emissions t CO2/t HVC
1.145 0.5
Carbon black Emissions from carbon black installations are directly related to the feedstock volume. We have been able to determine specific emissions data for the carbon black operations of both UK plants based on surveyed data. We have calculated the average and compared it to the BREF.
DTI
24
3.4.1
Other relevant factors
Steam crackers Although steam cracker feedstocks will be primarily based around either gas (ethane), liquid (naphtha, LPGs) or heavy liquids (heavy naphtha, gas oil), in reality a wide range of feeds are be used. (One UK liquid naphtha cracker actually cracks or has cracked up to 11 different feeds in the past, such as various refinery raffinates, propane and butanes. Although these would all be considered liquid feedstock types, output and emissions will vary slightly for each different feedstock.) On this point, the benchmarking could be centred around three main feedstock types, set by the primary feedstock used in the plant, in order to accommodate the lack of discretionary choice over feedstock:

Gas includes ethane, dry gas; Liquids includes naphtha, NGLs (butane propane), raffinate; Heavy Liquids includes heavy naphtha or gas oil. Summary of emissions data (published and surveyed)
3.4.2
The tables below summarise the average surveyed (UK) and published (EU) emissions factors for steam crackers and carbon black. W e have also adjusted the published figures to only account for emissions generated within the battery limits of the steam cracker, namely the pyrolysis furnace. W e would propose the benchmark be based on the state of the art naphtha based cracker, adjusted figure (to prevent double counting of emissions between EU ETS categories and to enable simple verification for this sector).
Table 16 Steam Cracker, specific emissions (tonne CO2/tonne HVC)
Source Surveyed Plant Average furnace emissions only Neelis [adjusted, furnace emissions only] State of the art naphtha based cracker [adjusted, furnace emission only]
Gas
Liquid 0.5
Heavy liquid
LPGs
0.76 [0.36]
0.85 [0.55] 0.68 [0.442]
0.97
0.71
Table 17
Carbon Black, Average Specific Emissions (tonne CO2/tonne HVC)
Source UK Plant Average IPPC BREF (calculated) Proposed benchmark factor (based on average BREF)
Specific emissions 2.47 1.53-3.43 2.51
DTI
25
4.
DISCUSSION AND PROPOSED REVISIONS TO BENCHMARKS

4.1 Discussion of issues for carbon dioxide benchmarks
We have outlined how different technologies, site configurations and feedstocks can all influence the level of emissions from petrochemicals sites. In this section, we review some of the key issues that we have considered in deciding whether to standardise the inputs into the Phase II benchmarks. 4.1.1 Feedstock issues
Emission levels reported on a per tonne ethylene basis can lead to problems when comparing the performances of different plants employing different feedstocks. This is because emissions relate to the feedstock selected as well as the ethylene and other olefins or HVC produced. As stated previously, emissions will tend to be lower for plants using gas feedstocks than for those cracking naphtha and gas-oil. Operators will also, even when cracking identical feedstock, change the proportion of high value products by adjustment of cracking severity (related to the residence time of the feedstock in the furnace tubes) according to market requirements at the time. Additionally, units cracking ethane, recovered directly from oil field sources, will generally have to remove and vent naturally occurring carbon dioxide before sending the feed to the cracking furnaces. In general, the lower the ethylene yields the more a need to remove components (products, co-products/by-products) which can increase the specific emissions (for the entire plant, not just the furnace). As a result of these feedstock issues (and the lack of discretionary choice available) operators would seek to differentiate the benchmarks on the basis of the feedstock type (i.e. gas ethane, liquids naphtha/LPGs/NGLs and heavy liquids gas oil). This in itself would be similar to expressing the benchmark on the basis of the relative volumes of ethylene produced (e.g. ethane >50% ethylene, liquids: 3040%, Gas oil <30%). 23 However, we believe that new entrant allocations to this sector should be based on a standardised benchmark for a state of the art naphtha based cracker presented in relation to the quantity HVCs recovered. 4.1.2 Decoking
During the cracking process the furnace tubes become progressively fouled with carbon (coke). These need to be routinely decoked normally on a 15-100 day runlength, depending on cracker feedstock, plant design, operation and whether any treatment chemicals are used to retard the coke formation. For steam crackers, decokes are normally carried out on-line using the furnace for heating a steam or air and steam mixture through the coils to burn the carbon to carbon dioxide. The vent gas may then be discharged to air (via a scrubber to eliminate any particulates) or on some plants the gas can be routed to the furnace firebox to ensure complete combustion.
23 Basing the benchmark on the relative product levels like this does introduce the potential for error where a particular
technology may result in, for example, a liquid fed cracker producing ethylene in volumes in excess of the 30-40% evident above. Specific operating conditions and down stream (from the furnace) processing options may also result in increased overall ethylene yields for the plant and could therefore result in a gas oil fed cracker being allocated allowances on the basis of a naphtha fed cracker
DTI
26
The carbon dioxide emissions generated from decoking (other than those generated from the fuel used) will not be monitored and it will be very difficult to estimate the emissions from this source. The fuel used in the furnace during this operation will be included within the furnace fuel consumption figures. 4.1.3 Scale of operation
The scale of operation can also have an impact on specific emissions. Since most olefins plants have a similar number of unit operations and point sources, plants with a low capacity and lower ethylene yielding feedstock will tend to show disproportionately higher specific emissions. A world scale ethylene plant would be expected to have a capacity of the region of 600-800ktonne/year or above. This contrasts sharply to the ExxonMobil ethylene plant at Fawley which has a capacity of 126ktonne/year and also cracks heavy fuel oil, which would lead to relatively higher specific emissions. However, the plant remains economical presumably due to its proximity to the Fawley refinery. (This may explain why this ethylene plant was included within Phase I EU ETS with the neighbouring refinery). It is proposed that the benchmark be based on sites of world scale capacity so that the efficiency is captured within the benchmarked allocation.
4.2
Proposed Phase II benchmarks
In this section we present our proposals for benchmarks to petrochemicals installations in Phase II. Steam crackers The benchmark allocation for the steam cracker operation proposed is based on the following calculation. The emissions factor is based on a standardised factor for a state of the art naphtha fed cracker, representing potential energy savings of up to 20% against existing naphtha fed cracker technology. The fuel used in the steam cracker furnace is a residual (recovered from the cracked gas) fuel gas consisting mainly of methane and hydrogen (dependent upon the naphtha quality). The utilisation factor is based on EU average factors over a five year period using published data. The capacity factor is based on survey returns received for UK crackers for this study. The SEC factor is derived from the specific emissions (adjusted) for a state of the art naphtha cracker (0.442 tonne CO2/tonne HVC, see Table 16) and the average benchmarked (BREF) energy consumption of a naphtha cracker.
A Allocation
= =
Ci Plant capacity t ethylene
* *
LF Load factor t ethylene/t ethylene capacity
/ /
CF Capacity factor t ethylene /t HVC
* *
EF Emissions factor t CO2/ MW h
* *
SEC Specific energy consumption MW h/t HVC
Allowances
Where:
C i Plant capacity Is defined by the applicant
DTI
27
C i Plant capacity LF load factor CF capacity factor EF emissions factor SEC energy consumption
Is defined by the applicant Is standardised at 0.89 t ethylene/t ethylene capacity Is standardised at 0.47 t ethylene/t HVC is standardised at 0.199 tCO2/ MW h is standardised at 2.22 MWh/ t HVC
Carbon Black Similarly for carbon black, the benchmark allocation would be based on the equation below. Here the emissions factor is based on the average published emission factor from the BREF document. The fuel used for carbon black production is also the actual feedstock (with the exception of some natural gas used in start up and for operational reasons). The utilisation and capacity factors are based on survey returns received for UK crackers.
A Allocation Allowances
= =
Ci Plant capacity t carbon black
* *
CF Capacity factor t carbon black/t capacity
* *
EF Specific emissions factor t CO2/t carbon black
Where:
C i Plant capacity CF capacity factor EF emissions factor is defined by the applicant Is standardised at 88% is standardised at 2.51 tCO2/ t carbon black
4.2.1
Input information required
Defra and DTI have asked us to identify the information that would be required from operators to calculate these benchmarks and how that data could be verified. We summarise the inputs and options for their verification below.
Table 18 Inputs to the benchmarks: steam crackers
Input parameter Plant capacity Capacity factor Specific emissions factor

Source: Enviros
Units tonne ethylene tonne HVC/tonne ethylene capacity tonne CO2/tonne HVC
Options for validation/verification Operator investment plans Standardised Standardised (based on state of the art naphtha fed plant)
DTI
28
Table 19
Inputs to the benchmarks: carbon black
Input parameter Plant capacity Capacity factor Specific emissions factor

Source: Enviros
Units tonne carbon black tonne carbon black/tonne carbon black capacity tonne CO2/tonne carbon black
Options for validation/verification Operator investment plans Standardised Standardised (based on furnace black plant, BREF average)
4.3
Summary of considerations in establishing the level of EU ETS carbon dioxide emissions at a steam cracker
In this section we summarise the key issues we have considered to develop the benchmarks for the petrochemicals sector.
Table 20 Petrochemicals key issues for carbon dioxide emissions Variation in CO2 emissions per unit capacity that results from choice Potentially high: specific emissions from a gas plant tend to be lower than from a liquid cracker (relative levels of co-products are also lower) High: the emission factors of different fuels are rather different, ranging from 0.19-0.25 kgCO2/kWh a difference of up to 33% High: the total output possible per unit feedstock varies considerably
Site specific or similar across sites Technology Similar across sites: technologies are broadly similar
Discretionary/non discretionary (new plant) Discretionary: however driven by the feedstock available. Some technologies are proprietary and so are not available to some operators
Discretionary/non discretionary (extension) Non-Discretionary: the nature of an extension will typically be linked to the technology already installed on a site and by the available feedstock (as the two are linked)
Fuel
Site specific: installations usually burn the fuel available on site rather than natural gas
Feedstock
Site specific: installations are sited close to a particular source of feedstock
Discretionary: when building and operating an installation an operator will compare the economics of cracking different feedstock from different sources
Discretionary (somewhat): when building and operating an installation an operator will compare the economics of cracking different feedstock from different sources. However the technology installed will limit the extent of this choice
DTI
29
Site specific or similar across sites Running hours Site specific: however, since these installations are designed to operate all year round the range is less than in some EUETS sectors Site specific: the ratio of outputs will depend on the feedstock and market demand
Discretionary/non discretionary (new plant) Discretionary: the load factor will be driven by demand for output and capacity of the installation
Discretionary/non discretionary (extension) Discretionary: the load factor will be driven by demand for output and capacity of the installation
Variation in CO2 emissions per unit capacity that results from choice Low: due to fact that all installations operate at relatively high load factors
Product mix
High: due to cracking severity
Source: Enviros
DTI
30
5.
EVALUATION OF PROPOSED AGREED CRITERIA
BENCHMARK
ACCORDING
TO
In this section we review the benchmarks proposed above against the criteria established by DTI and Defra.
5.1
Feasibility
The first question is feasibility both in terms of how feasible it is to calculate an emissions level in some benchmarked way and also whether that calculation can be checked and verified by third parties. W e discuss each issue below. 5.1.1 Transparency of data
We have developed the benchmarks using a combination of site specific information (provided by operators), published best practice standards and our own experience of the industry. The small number of installations in the UK means that the data set on which these benchmarks are based is not as broad as for some other sectors, but they can be benchmarked to an EU standard for BAT (although the BAT data is based on the entire energy consumption for the plant). 5.1.2 Verification of data inputs
The data that a new entrant will need to input to the benchmark spreadsheet will be limited to capacity and process type. This will be relatively straightforward to verify from design and/or investment plans. 5.1.3 Factors relating to best practice
The feedstock used in the process varies from site to site. The feedstock selection is influenced by many factors, location being a major consideration and availability of desired feedstock within that. The benchmark however, in order to encourage expansion/investment in the sector along the cleaner olefin production route should be standardised (based on a state of the art naphtha fed plant) on the basis of carbon emissions in relation to output of high value chemicals.
5.2
5.2.1
Incentives for clean technology

Extent of differentiation
We consider it is appropriate to differentiate between steam crackers and carbon black due to the wide variations in processes and different products. W e have based the benchmark on a specific feedstock or process. However, the many variables and complexity of petrochemical plants means that it is likely there will be a wide variation in the difference between benchmarked emissions allocation and actual emissions from site to site.
5.3
Impact on competitiveness and investment
Carbon allowances constitute only a small proportion of the manufacturing costs of petrochemicals. Although a surplus or shortfall in allocations will obviously have some impact on the costs of the business, in relative terms, these costs are small. Since the products of steam cracker and carbon black operations are not direct
DTI
31
substitutes, using different benchmarks to calculate allocations to the two processes is not inappropriate. For steam crackers the impact of the benchmark in emission terms is summarised in Table 21. It compares the emissions from a non-state of the art naphtha cracker against the benchmark (based on a state of the art naphtha fed cracker). Table 22 compares emissions from the extension at an existing carbon black facility against the benchmark.
Table 21 Competitiveness Impact Steam Crackers (Non state of the art new facility, 700ktonne/year ethylene)
Liquid cracker (0.55 tonnesCO2/tonne HVC) Emissions impact Monetary impact Impact relative to total energy cost (40/tonne ethylene) Impact relative to revenues (800/tonne ethylene) Operating margins (based on average cash margin of 275 (400) per tonne ethylene capacity
Table 22
151 ktonne CO2 (20% shortfall) 3.8 million 13.5% 0.67% 1.4%
Competitiveness Impact Carbon Black (Expansion, 120ktonne/year Furnace Black)
Furnace Black (2.545 tonnesCO2/tonne Carbon Black) Emissions impact Monetary impact Impact relative to total energy cost (20/MW h and energy consumption of 47GJ/tonne carbon black) Impact relative to revenues (1,300/tonne cash cost of production which includes coproduct credits) Operating margins 7800tonne CO2 / 2.6% 156,000 2.6%
0.1%
Not available
5.4
5.4.1
Consistency with incumbents

Steam cracker
On the basis of this benchmark, new entrants will be slightly disadvantaged in comparison to incumbent ethane fed crackers that have received allocations on the basis of historical emissions (estimated at 2.2%). For existing naphtha based plant the variation could increase to a 20% difference between its emissions and the benchmarked allocation. However, as stated in the analysis, it is expected that state of the art naphtha plants can achieve energy savings in the range of 20% in comparison with existing naphtha plants.
DTI
32
5.4.2
Carbon Black
The benchmark chosen (based on the average BREF emissions factor) is close to both existing carbon black plants calculated emission factors. W e would estimate that variation in allocation between incumbents and new entrants would be in the region of +/- 4%.
DTI
33
6.
SUMMARY OF COMMENTS CONSULTATION
RECEIVED
IN
RESPONSE
TO
The purpose of this section of the report is to summarise the written stakeholder comments that we have considered in response to the proposals published in an earlier version of this report in March 2006 24 . The table below notes the points raised and the way that we have incorporated them in benchmarks.
Table 23 Summary of written responses received
Stakeholder response and comment Any UK expansion is likely to be based on a naphtha feedstock. The technology benchmark published for consultation reflected this conclusion, however the text in table 1 should be amended to reflect this. The text (gas) has been deleted from tables 1 and 20, row 1, column 2. The proposed benchmark for crackers should be amended to include an emissions factor that reflects the mid-point of the range for naphtha (shown in table 11). The benchmark has been adjusted in the two tables presenting the benchmark to reflect the fact that the feedstock is naptha. Note that this does not affect the allocation calculated using the benchmarks since the SEC is also adjusted proportionately so that the final allocation is the same. The proposed load factor of 0.67 for steam crackers appears too low The report text has been amended to note the likely downward bias and European data is now used in the benchmarks as the basis for the load factor (refer to paragraph 3.3 on page 23).
24 http://www.dti.gov.uk/energy/sepn/benchmarks_review.shtml
DTI
34
APPENDICES
DTI
35
1.
PETROCHEMICALS GLOBAL MARKET DEVELOPMENTS 25

Focus on the Middle East Continuing high oil prices are expected to increase the concentration of operators in areas close to low-cost oil and gas, namely the Arabian Peninsula and Iran with their access to cheap feedstock. Middle East governments will be using some of the monies earned from higher oil prices to build more petrochemical plants. Furthermore, the margins enjoyed by petrochemical businesses in the Middle East are attracting large amounts of private investment funds, and drawing investment away from the US and Europe. As a result, ethylene capacity in the Middle East, which since the mid-1990s has increased by seven million tonnes, is forecast to expand by 20 million tonnes or by about 150 per cent to around 32 million tonnes by the early part of the next decade. In the Far East, where much of the global growth in demand for ethylene derivatives is expected, ethylene capacity is predicted to rise by 40-50 per cent. Consequently, by 2012 it is expected that the Middle East will have nearly the equivalent amount of ethylene capacity as North America and around a fifth more than that in Western Europe. Industry analysts believe that even if oil prices were to average around $40 per barrel (while the reality is somewhat higher), there would be little sense in putting money into new crackers which do not have access to low-cost ethane. The increase in share of global ethylene capacity in the Middle East will result in a squeeze on supplies of propylene and aromatics because of the regions reliance on ethane feedstock. Propylene and aromatics supplies are already failing to keep pace with buoyant global demand for their major derivatives, such as polypropylene, polycarbonate and polyester. Already this imbalance is being reflected in the prices for propylene and some aromatics. Propylene prices have risen close to or even higher than ethylene, having tended to be 2530 per cent lower historically. As a result of the likely scarcity in propylene, any short-medium term cracker expansions/developments in the UK and Europe are likely to favour propylene production, the use of naphtha as a feedstock, and potentially the use of new technology to convert other co-products to propylene. Benzene prices rise The supply situation for benzene is similarly tight because high crude oil prices and shortages of refinery capacity have pushed gasoline prices to such a level that it has become more profitable to channel aromatic streams into fuel production. It is known that European refineries have in fact been sending shipments of reformates across the Atlantic to the US because of the pressure on gasoline supplies in the country. While Benzene supplies could be increased through investment in benzene capacity in the refineries, oil companies favour investment into oil and gas exploration and production because the returns are much higher. There are also research projects which are investigating cheaper alternative ways of obtaining benzene, other than through the hydro dealkylation (HDA) process, which is the main technology for making benzene from toluene.
25 Aiming for Number One, Chemical & Engineering News, December 7, 2005
DTI
36
Additionally, derivatives such as polystyrene are coming under pressure from other plastics, especially polyolefins as a result of the unpredictability of short-term benzene prices.
DTI
37

File 33272

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

File 33272

Uploaded by

Copyright:

Available Formats

A REPORT BY ENVIROS CONSULTING LIMITED: AUGUST 2006

QUALITY CONTROL SHEET

Publication title CAN Volume number Version Date File Reference

Prepared under the management of:

Caroline Doble Project Manager Directed, reviewed and approved by:

Enviros Consulting Ltd 20-23 Greville Street London EC1N 8SS

EXECUTIVE SUMMARY 1. BACKGROUND AND SECTOR DESCRIPTION

TECHNOLOGY OPTIONS AND EMISSIONS FACTORS

REVIEW AND DISCUSSION OF THE AVAILABLE DATA

DISCUSSION AND PROPOSED REVISIONS TO BENCHMARKS

EVALUATION OF PROPOSED BENCHMARK ACCORDING TO AGREED CRITERIA

SUMMARY OF COMMENTS RECEIVED IN RESPONSE TO CONSULTATION

APPENDICES 1. PETROCHEMICALS GLOBAL MARKET DEVELOPMENTS

Non discretionary: driven by the site at which the cracker is located

Non discretionary: driven by the site at which the cracker is located

Site specific: installations are sited close to a particular source of feedstock

High: due to cracking severity

Ci Plant capacity t ethylene

LF Load factor t ethylene/t ethylene capacity

CF Capacity factor t ethylene /t HVC

EF Emissions factor t CO2/ MW h

SEC Specific energy consumption MW h/t HVC

Ci Plant capacity t carbon black

CF Capacity factor t carbon black/t capacity

EF Specific emissions factor t CO2/t carbon black

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

BACKGROUND AND SECTOR DESCRIPTION

Description of UK petrochemical installations and structure of sector

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Primary petrochemical products and their uses

Source: Nexant Chem Systems

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Refineries and steam cracking units in the UK

Source: Cefic Petrochemistry Programme

Installation Fawley Grangemouth

Operator ExxonMobil Ineos

Capacity (kt ethylene/year) 126 1020

Mossmorran/ Fife Ethylene Plant

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Capacity (kt ethylene/year) 865

Source: www.petrochemistry.net and Enviros Survey

Installation Avonmouth Ellesmere, Stanlow Total

Operator Columbian Chem Cabot

Capacity (kt /year)

Notes Liquid hydrocarbon feedstock Liquid hydrocarbon feedstock

Emissions from sector

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Likely changes in sector

temperatures and lower residence times

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Known or likely new entrants and retirements

propylene is valued equal to or higher than ethylene

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Further details on global

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

TECHNOLOGY OPTIONS AND EMISSIONS FACTORS

Process options for steam cracking

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Netherlands, European Conference on Energy Efficiency in IPPC Installations, October 2004

EU ETS PHASE II NEW ENTRANT BENCHMARKS: PETROCHEMIALS

Licensors Ethylene yield (wt%) SEC (GJ/tonne ethylene)

ABB Lummus 34.4%