M. Carugo, Emerson, Austin, Texas; and P. SHARPE, Emerson, Denver, Colorado
Many companies around the world and across the size spectrum have committed to aggressive carbon-neutral targets and are now looking to their production sites for practical plans on how to achieve these goals. A marginal abatement cost curve (MACC, FIG. 1) can assist with these efforts by ranking projects based on their cost per ton of carbon dioxide (CO2) abated and the net emissions reduction achieved. Projects on the left side (blue) are self-financing in that they reduce operating costs and emissions.
Using these curves, companies can focus first on projects with the best payback, and then proceed to the next higher marginal cost projects until the total reduction goal is achieved. Once a project list is developed, the next step is a strategic plan that evaluates risks for various implementation scenarios to develop an overall execution plan. This article will examine a methodology for using MACC curves, along with strategic planning tools to identify a net-zero path based on industry experiences.
Net-zero and stewardship. Major international companies and some smaller manufacturers—each driven by government regulations, market pressures and conscientious corporate stewardship—are aiming to achieve net-zero emissions for their enterprises by 2050. This is the date specified by the UN Climate Change Conference (COP21) in Parison December 12, 2015.
Participating countries agreed to pursue efforts to limit the global temperature increase to less than 1.5°C above pre-industrial levels. Nearly 3,000 international companies have adopted net-zero targets, and more than half of Fortune 500 companies use an internal carbon price to evaluate potential projects.1 In the chemical industry, more than 69% of the largest global players have adopted carbon-neutral targets.2
Industrial spending on environmental, social and governance (ESG) programs is expanding rapidly, with industry analystsa tracking nearly 46,000 projects worldwide. These include projects for:
Total spending on ESG projects between 2021 and 2024 worldwide is expected to exceed $8.3 T across all industries. Of those, more than 1,600 projects worth $392 B are in the chemical industry (FIG. 2).3
The refining industry has seen similar trends toward increased spending on ESG-related initiatives. An industry analyst’s project databasea is tracking more than 200 projects worth more than $18 B around the world. Nearly half of these are renewable fuels projects, followed by CCUS and P2X (FIG. 3).
Clearly, the refining industry is getting serious about finding ways to reduce its carbon footprint, and it is encouraging personnel to identify and execute emissions reduction projects to achieve those goals.
Project planning methodology. The challenge for companies launching such programs is developing a list of projects that reduce their carbon footprint, and then defining which should be implemented and when. This project list is best developed from brainstorming sessions involving operations management, operators, process engineers, information technology, production planning and reliability representatives, with guidance from industry subject matter experts.
Participants must consider all possibilities for improving operational efficiency, reliability, yields, energy efficiency, waste, off-spec product reduction, flaring, regulated emissions control, electrification and other areas. Ideas must be consolidated and ranked based on impact, difficulty and timeframe. The resulting extensive project list will serve as the input to the next step in the process: project analysis. Each of the consolidated projects from the brainstorming session must be evaluated and assessed to determine:
With this information, a MACC curve for the site can be developed. In many cases, a project that improves energy usage, yields, production or reliability can be justified on its own merits and will have a positive NPV. In some cases, projects may not show a positive NPV but can be justified based on the CO2e emissions reduced. A CCUS project is a prime example. The electrification of steam-driven turbines or furnaces could be projects with a negative immediate financial return, but they result in true net-zero emissions.
The example MACC curve (FIG. 1) for a typical ethylene complex indicates the NPV divided by the tons of CO2e abated by a given project (y-axis), and the total tons of CO2e abated (x-axis). Projects are ranked from the best to the worst CO2e cost per ton. From this chart, it is apparent which projects have the best payback and which will cost the corporation the most to implement. The corporate carbon cost ($/t of CO2e) can be used to help justify projects in some cases.
Estimating the CO2e reduction can be challenging. Projects that improve efficiency and reduce fuel or steam consumption are relatively easy to estimate. However, for example, capital projects to electrify steam-driven or fuel-burning equipment require much more engineering effort as they require a detailed plant model to estimate new steam and fuel balances, develop project cost estimates and the impact on CO2e emissions. Furthermore, electrifying equipment only makes sense when the power supplier is providing greener energy than the boilers onsite.
If the power company supplying the energy is burning fossil fuels, especially coal, that would simply move CO2 emissions from Scope 1 to Scope 2. While there are many plans to build renewable-energy power plants, the timing and capacity of these are often questionable and depend on other parties in the chain that may not understand the risk for the company to achieve its emissions goals.
Achieving true net-zero, defined as a site completely eliminating any dependency on fossil fuels, requires significant capital investment in technologies that may not be commercially available today. Investments in wind farms and solar power will likely be part of the project portfolio. Such projects may have a good payback and significant impact on emissions, but the plan must consider the time required for approvals, permitting, engineering and building the required infrastructure.
New capital projects, like adding a CCUS system to a furnace exhaust, must start with engineering analysis to develop the project scope, cost and design parameters. Conversely, projects such as advanced process control, energy management systems and combustion optimization may not require significant capital and can be implemented in the short term.
While the MACC curve is an excellent tool for defining and prioritizing which projects should be implemented, it ignores several factors:
To account for these and other factors, a strategic planning tool is necessary, capable of providing a holistic view of the site and quantifying the value and impact of each project across the entire timeline.
Strategic planning tools. Evaluation teams must consider many uncertainties when developing a sustainability plan:
A novel strategic planning toolb can help define a probabilistic performance model of a plant over its entire lifetime. Overall site production can be modeled with interconnections among process units, utilities, flares and emissions streams. The tool analyzes historical data to identify nominal and maximum sustainable operating conditions, along with common upsets or constraints that prevent the unit from operating at that point. The example in FIG. 4 illustrates a simple ethylene and derivatives plant model.
Upsets, trips and downtime within each unit are statistically modeled as events that can either slow or shut down the unit. For each event, the frequency and duration probabilities are estimated based on operational history. The unit models can be simple—e.g., number and durations of slowdowns, trips and shutdowns—or they can be modeled down to the equipment level, even considering parallel equipment (FIG. 5).
Then, using a Monte Carlo analysis, the application runs multiple lifetime simulations to arrive at the most likely scenario, providing probability curves for achieving production, energy and emissions goals. Histograms (FIG. 6) show the probability of exceeding production or emissions targets, with culpability charts identifying the biggest contributors to production loss, excess energy consumption and emissions across the entire timeline.
With this strategic planning toolb, future sustainability projects can be modeled as events, each with its associated impact on shutdowns, slowdowns, energy consumption, emissions and production. Variability in technology timing and effectiveness can be evaluated, along with different project sequences, by running various scenarios (FIG. 7).
Examples include several scenarios of implementing small wins and then adding one or more large capital projects. The scenarios are then evaluated, and one is selected as the best in terms of likelihood of success. Models developed for project planning can also be used to validate and update the larger plan continuously, based on actual results and emerging technologies.
MACC curves assembled by the planning team, combined with analysis using the strategic planning toolb, have helped companies in several industries identify their sustainability plans across multiple sites, providing a view of the financial and emissions impact of various sustainability projects. Using these tools, companies can develop a high-level path to net-zero, and then evaluate the potential to achieve short- and long-term goals. HP
NOTES
a Industrial Information Resources
b Aspen Fidelis
LITERATURE CITED
Marcelo Carugo works with downstream manufacturers globally to create a clear and actionable path to operational excellence and digital transformation through applications of automation technologies. He joined Emerson in 1998 and has more than 30 yr of experience in the chemical and refining process control industries both domestically and internationally. Carugo received an electronic engineering degree from the University of Buenos Aires, Argentina; a post graduate diploma in electronic engineering from PIITS in the Netherlands; and an MS degree in electronic engineering with honors from NUFFIC, also in the Netherlands.
Pete Sharpe is a Principal Consultant with Emerson’s Industrial Software group, focusing on the petrochemical and chemical industries. His role involves helping downstream manufacturers identify and pursue opportunities to improve operational key performance indicators using automation technology and industry best practices. Sharpe brings more than 44 yr of experience working in the industry, focusing primarily on advanced control, reliability and various digital transformation solutions. In his current role, he helps customers identify, justify, plan and implement technologies that support sustainability, reliability, safety and profitability objectives. Sharpe has authored or co-authored more than 25 technical papers and holds five patents on equipment monitoring techniques. He earned a BS degree in chemical engineering from the University of Colorado, and an MBA from the University of Houston.