Optimizing the Refinery Operational Configuration: Case in Taxation at CO2 Emission

ABSTRACT

A refinery is essentially a joint production process system. Due to the complex nature of the process involved, while it converts heavier oils into high quality oil products, fuels and other high value products, it also provides a way to curb carbon dioxide (CO2) emissions. As refineries are profit-seeking businesses, this paper used linear programming (LP) models to assess the impact of different taxation amounts on CO2 emissions on a refinery’s operational configuration, and energy using strategies for a refining expansion project in Taiwan, and to discover what the carbon price should be in order to justify the required changes. The result reveals the necessity of developing processes, such as the Delayed Coking (DCU) process combined with hydrotreating, to produce high-quality fuels and petrochemical products in the refinery. Our findings indicate that this anticipated expansion plan reduced CO2 emissions by 4.92%, while obtaining an efficiency of 14.46 USD/ton-CO2 at a cost of 30 USD/ton-CO2, and by 10.33% and 25.22% CO2 emission with efficiency gains of 15.22 and 78.61 USD/ton-CO2 at a cost of 90 and 180 USD/ton-CO2, respectively. When emission costs are over 90 USD/ton-CO2, the refinery opts for liquid petroleum gas (LPG) instead of burning fuel oil, since using hydrogen as a makeup fuel only proves beneficial when the CO2 emission costs are over 150 USD/ton-CO2.

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