13 Sep 2011

Cost effectiveness of emissions abatement options in European refineries

Report No. 6/11 This report explores the cost-effectiveness of emission reductions in European refineries associated with Best Available Techniques (BAT) and illustrates how Associated Emission Level (AEL) ranges might be derived using a “shadow price”. This methodology is consistent with the Economics and Cross-Media BAT Reference Document (BREF) and closely parallels the technical process underpinning the choice of National Emission Ceilings (NEC).

This report first summarises information gathered by CONCAWE in 2010concerning the costs of applying candidate Best Available Techniques to reduce emissions from refineries in Europe. Importantly, these costs do account for the retrofitting of equipment to units in existing refineries. The focus is on NOx and SO2emissions from major refinery sources. Cost data has been expressed as a capital cost, an annualised cost and, with reference to unabated emissions, as a marginal cost. The marginal cost (€/tonne abated) depends on the effectiveness of the technology to be applied and the existing emission.

Using the 2006 CONCAWE Sulphur Survey data, the distribution of the incremental marginal cost of different technology applications across the refinery pool has been estimated. The use of an incremental marginal cost per technology step is central to the GAINS Integrated Assessment Model in deriving cost-effective National Emissions Ceilings for priority pollutants. The Thematic Strategy on Air Pollution (TSAP) set environmental (and consequential emission reduction) targets for 2020 using thismethodology and the European Member States accepted the cost of these measures. The average EU cost per tonne of pollutant to be removed has been used as an illustrative "shadow price". Comparing this "shadow price" and the marginal cost curve indicates which abatement techniques could be considered cost-effective and by what proportion of the industry.

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