In this issue of our In Focus newsletter, ACFA would like to draw our readers’ attention to the CONCAWE report on high octane petrol (HOP) and the feasibility of 102RON gasoline in the European Union. The study was released in September 2020 and can be downloaded as a pdf-file from the CONCAWE website (www.concawe.eu).  

CONCAWE is a division of the European Petroleum Refiners Association, an international non-profit organization, operating in Belgium. This association is comprised of CONCAWE and FuelsEurope divisions, each having separate and distinct roles and expertise but administratively consolidated for efficiency and cost effectiveness. CONCAWE members range from multi-national oil and gas companies that operate in exploration and production, refining, and chemicals, to European regional and national companies operating one or more refineries in the EU. The association’s members are all 40 companies that operate petroleum refineries in the European Economic Area.

The study has been conducted by CONCAWE’s Science Executive, Damian Valdenaire, with the support of members from the organization’s Refining Technology Support Group. 
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Introduction, background and objective of the study

The European Commission is proposing to take a worldwide leading role in tackling climate and environmental related challenges under the European Green Deal, aiming for very ambitious decarbonisation and energy efficiency targets up to 2050, in order become the first continent to reach climate neutrality by 2050. Although the current 2030 target foresees already a 40% cut in greenhouse gas emissions (from 1990 levels), the Green Deal proposal is to increase this to 50% or even 55%. Several regulatory instruments aiming at reducing GHG emissions in the Transport sector will be revised accordingly; among them, the Renewable Directive and its component on Transport, the Fuels Quality Directive, and the regulation on vehicles CO2 emissions standards on. 

A 23% reduction of greenhouse gas emissions from road transport compared to 2005 must be achieved in 2030, thanks to the vehicle efficiency regulation alone. This intermediate step on the path to 2050 may face further tightening under the Green Deal. 

In this context the objective of this study is to assess the feasibility and impact of producing a “High Octane Petrol (HOP)” grade in the European (EU28+3) refining system, as a contribution to vehicle efficiency improvement up to 2030. The gasoline research octane number (RON) is a measure of the fuel ability to withstand pre-ignition during compression in an engine cylinder and is a critical factor in engine design. Engine performance and efficiency increase with increasing compression ratio. However, these engines require gasolines with higher octane ratings to realise the full benefit. Hence this study evaluates the RON that can be produced by the EU refining system, together with the impact on CO2 emissions in the production process, as well as, by vehicle use (Tank-to-Wheel). An estimation of costs for the EU refining system producing HOP fuels is also made.

Key findings of the study

Based on the proposal by the European Commission, it is crucial to keep improving the development of both the Internal Combustion Engine (ICE) and the refinery operations to deliver engines with high thermal efficiency and high-quality fuels respectively. 

Developing high octane petrol has been identified as an opportunity for both OEMs and refiners to prove their adaptation to market and societal expectations, setting Europe in the leading role for passenger cars efficiency.

While other quality grades were investigated, the CONCAWE report focuses on the HOP grade RON 102 in its case studies, which was selected as the best compromise between vehicle benefit and minimising refinery investment, in order for refineries to achieve and complete the next step towards liquid fuels quality improvement. The study concludes that:  

• In case 50% of the fleet is using optimized engines for 102 RON, the CO2 saving is more than 3MT per year on a well-to-wheel basis, which is a significant CO2 emission reduction (refining process + combustion in internal combustion engines at high compression ratio). 

The estimated impact of global CO2 emissions benefits is based on the scenario as per details in the table underneath. We ask the reader to refer to the study details on CONCAWE’s website for a complete overview of assumptions and sensitivities and other definitions applied in this scenario.

Direct CO2 emissions balance

• The transition from 95 RON to 102 RON will carry an octane cost estimate of 4.85 $/MT per RON point, which is by no means negligible but remains well below the market estimate conducted in the US which concluded that the cost will total 8.60 $/MT per RON point.

The basics for the hypothesis are highlighted in the table and chart underneath. We ask the reader to refer to the study details on CONCAWE’s website for a complete overview of assumptions, sensitivities and other definitions applied in this scenario. 
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HOP cost sensitivity drivers 

Cost of average RON point
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Beyond this, the study’s LP model set of assumptions also demonstrate the feasibility of producing a HOP in the EU refining system, viable in both the short-term, 10% HOP and long-term, 50% HOP scenario.

The report also addresses the critical role oxygenates play, particularly so ethers, in the detailed case studies as the main contributor in accomplishing the intended RON increase by pointing out the positive impact on CO2 emissions and the limited effect on cost, whereas bio-Ethanol’s detrimental leverage on CO2 emissions and technical limitations are also being highlighted.  

Conclusions 

The study concludes by saying that a high-octane petrol scenario (102 RON gasoline – 50% of domestic demand) for Europe is technically feasible at a comprehensible and cost-effective level, which would help the oil industry to prove their adaptation to market and societal expectations, setting Europe in the leading role for passenger cars efficiency. The main takeaways of the study are:

• In a global trend to reduce Green House Gas (GHG) emission, multiple paths are potentially available. However, as for every sector facing an urgent need to reduce its GHG, improving the efficiency is the first steps as it is always the most certain and cost-effective way to have a real and immediate impact on GHG. 
  

• The transport sector, and especially passenger cars for this study, is expected to evolve quickly in Europe towards the electrification of new passenger car fleet. However, as evidence in a study published by CONCAWE, “Impact analysis of mass EV adoption and Low Carbon intensity fuel scenarios7”, a scenario with ICE (Hybrids) representing half of the fleet would lead to the same GHG reduction and for a similar cost.
  

• Therefore, it is crucial to keep improving the development of both the Internal Combustion Engine (ICE) and the refinery operations to deliver engines with high thermal efficiency and high-quality fuels respectively.
  

• In this environment, developing High Octane Petrol is an opportunity for both OEMs and refiners to prove their adaptation to market and societal expectations, setting Europe in the leading role for passenger cars efficiency. 
  

• In the central scenario of this study, 50% of the fleet using optimized engines for 102 RON, the CO2 saving is more than 3 MT per year on a well-to-wheel basis, which is a significant CO2 emission reduction (refining process + combustion in internal combustion engines (ICE) at high compression ratio). Other sensitivity scenarios have been developed, high bio, refinery Investment, lower efficiency, showing different results, but all of them, with conservative hypothesis, are showing positive impacts on GHG emission. Furthermore, many other positive effects linked to the persistence of efficient, such as employment, efficient and affordable mobility, etc. are not taken into account; these elements are crucial for a prosperous future for the European Union. 
  

• For refineries, producing HOP is one more step towards liquid fuels quality improvement. The sector showed in the past a strong resilience, adapting gasoline parameters such as sulphur, benzene, octane, etc. Open to international competition, being proactive and ahead in product development is key. The dialogue with OEM’s is key as well to get the best fit between engine and liquid fuels.

• The modelling study shows a feasible evolution, on EU average and as well for each region as defined in the model. These regions, representing different refinery configuration, are adapting their refinery operations, imports of oxygenates (and/or through internal production) and trade between regions. The economic analysis shows a cost for refiners, which is an expected result as today, the high-octane grades, in every region of the world, are traded with a premium over the standard grade (RON98 versus RON95 in EU, RON93 versus Regular 87 in US, etc.). An octane estimate of 4.8 $/MT per RON point for an evolution RON95 to RON102, though not negligible, remains well below the market estimate in the US (8.6 $/t/pt RON). The impact on long-term demand due to the development and relevance of the ICE in Europe, is an element not evaluated, but for the long-term strategic analysis and decision from the refiners (and OEM’s) is from a 1st order of magnitude.
  

• The case for 100% HOP in 2030 has been investigated. More flexibility (degree of freedom) is required for the model with more trade flows, investments and oxygen saturated at 3.7%. The cost of octane increases significantly (6.8 $/t per RON point), the model is strongly constrained (translating significant efforts and adaptation from the refining sector), but a solution is found.
  

• LP modelling study set of assumptions demonstrate the feasibility of producing a HOP in the EU refining system. The pathways for the refining industry in Europe (102RON and 50% Demand in the 2030 Demand scenario) will require major refinery adaptation (process unit operation, increased trade flows within Europe and more gasoline export).

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