A new vision has come into focus during the global pandemic. A more sustainable future is being formed, by all parts of the economy. Industries once reticent to admit to the certainty of climate change are now pledging to become carbon neutral by 2050. Dirty projects are no longer finding financing, and the likelihood of a price on carbon emissions (or a credit for emissions reductions) is increasing rapidly. Programs that incentivize low carbon production already exist in places like California (LCFS) and Europe (REDII) for products like fuels, and as the renewable future unfolds, this is likely to eventually expand to other heavy polluting parts of industry. The ground has shifted, and while biobased was once the definition of sustainability and limited in reach, the definition of sustainability is carbon footprint or carbon intensity. Low carbon intensity technologies and the technologies that enable them have been experiencing a high level of growth in the past few years.
NexantECA has been investigating several topics that have been experiencing extremely high levels of activity and interest in the post-COVID sustainable boom. These are driven by two primary megatrends related to sustainability, electrification and decarbonization, and have been focused on three primary subsectors:
Battery technologies have seen a significant spike in interest recently as they are a key technology for renewable energy deployability, electric vehicle proliferation, and the increasing digitalization of the modern world. All of these growing end-uses require more batteries, and more advanced materials to maximize energy density and efficiency, while minimizing safety risks, and lithium-ion batteries have emerged as a favorite. Most commercial lithium-ion batteries have carbon and graphite materials as anodes. Advanced carbon research into anode materials is advancing rapidly.
NexantECA has investigated technoeconomic developments in our recent TECH report, Advanced Carbon Applications in Lithium-Ion Batteries (December 2021)
Low carbon hydrogen has been seeing a particular boom in interest as hydrogen is already a key input for clean fuels and chemicals production. Options for renewable hydrogen (green hydrogen) are emerging and have been previously investigated in NexantECA’s report, Biorenewable Insights:Hydrogen (2020). Alternatively, blue hydrogen uses the same existing fossil feedstocks, while capturing the emissions, and lowering the overall carbon footprint of production. When hydrogen is used as a feedstock for chemicals or fuels production, this has a cascading effect and reduces the carbon intensity of the end product as well. In the case of fuels, this can be valorized (either in a hydrogen fueled vehicle or used as a feedstock for fuels production) via programs like the LCFS in California that generate credits based upon the carbon intensity reduction against an industry benchmark.
NexantECA has investigated the technoeconomics and commercial aspects of blue hydrogen in the recent TECH report, Blue Hydrogen (December 2021) and Market Insights: Carbon Dioxide - 2021
Low carbon fuels are also seeing substantial interest. Of them one that is experiencing the largest growth is the HVO sector. HVO (or Hydrogenated Vegetable Oil) is a misnomer, as it includes used cooking oil and animal fats as feedstocks. Key products include SAF, Renewable Diesel, Renewable Naphtha, and Renewable LPG. While the largest share of production is for renewable diesel, the potential for SAF production has helped to push expansion as this is the only commercial technology currently available for production of SAF (though several other technologies such as ATJ and FT are emerging and nearing commercial).
NexantECA has investigated this sector with several key reports focused on different aspects of the industry.
The Market Insights: Hydrotreated Vegetable Oils – 2021 report provides analysis and forecast to 2035 of the global market for hydrotreated vegetable oil (HVO), including the markets for renewable diesel, bio-based aviation fuel and bio-based naphtha. The report includes discussion regarding key market drivers and constraints, as well as demand analysis for nine regions: North America, South America, Western Europe, Central Europe, Eastern Europe, Middle East, Africa, Asia Pacific, and China. Analysis also includes the competitive landscape, capacity listing and cost competitiveness along with a snapshot of latest pricing trends by region and price forecasts to 2035.
The Biorenewable Insights: Sustainable Aviation Fuel (SAF) (2021) report investigates the technical, economic, and commercial aspects of the growing sustainable aviation fuel (SAF) industry. Cost of production estimate models are provided for 20 different technologies (across several regions) including various HVO, ATJ, thermochemical and other low carbon intensity technologies – credits are included in the analysis based upon carbon intensity. Capacity analysis, process descriptions, and strategic insights are also provided.
Combining the market data and technoeconomic data from these programs, we have developed a model of historical, current, and forecast cost competitiveness and profitability for HVO plants.
For HVO technologies, on a totally hydrocarbons basis, NexantECA now has in-house an interactive model for a Global Cost Curve, comparing the cash cost of production, of every plant in the world, modeled individually. This draws on and marries data from our global plant capacity database, regional and country level operating rates, cost of production database, annual price forecasts (developed for three oil scenarios across a broad range of refinery, energy, and petrochemical products). Key outputs of the analysis include global coverage with breakdown into major regions and/or countries, annual cash cost of production and cash margin presented by plant, Historical (5 years) and forecast (10 years) cost curves including NexantECA’s low, medium, and high oil scenarios for forecast years, with some user editable variables and functionality (including the ability to add a hypothetical plant).
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About Us - NexantECA, the Energy and Chemicals Advisory company is the leading advisor to the energy, refining, and chemical industries. Our clientele ranges from major oil and chemical companies, governments, investors, and financial institutions to regulators, development agencies, and law firms. Using a combination of business and technical expertise, with deep and broad understanding of markets, technologies and economics, NexantECA provides solutions that our clients have relied upon for over 50 years.