report No. 6/11

13 Sep 2011

refineries associated with Best Available Techniques (BAT) and illustrates howAssociated Emission Level (AEL) ranges might be derived using a “shadow price”.This methodology is consistent with the Economics and Cross-Media BATReference Document (BREF) and closely parallels the technical processunderpinning 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 reduceemissions from refineries in Europe. Importantly, these costs do account for theretrofitting 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, withreference to unabated emissions, as a marginal cost. The marginal cost (€/tonneabated) depends on the effectiveness of the technology to be applied and theexisting emission. Using the 2006 CONCAWE Sulphur Survey data, the distributionof the incremental marginal cost of different technology applications across therefinery pool has been estimated.The use of an incremental marginal cost per technology step is central to the GAINSIntegrated Assessment Model in deriving cost-effective National Emissions Ceilingsfor priority pollutants. The Thematic Strategy on Air Pollution (TSAP) setenvironmental (and consequential emission reduction) targets for 2020 using thismethodology and the European Member States accepted the cost of thesemeasures. The average EU cost per tonne of pollutant to be removed has beenused as an illustrative “shadow price”. Comparing this “shadow price” and themarginal cost curve indicates which abatement techniques could be consideredcost-effective and by what proportion of the industry.