The refining industry is a critical component of the global energy system, producing fuels and feedstocks that power transportation and manufacturing. However, it is also a significant source of carbon emissions, largely due to its reliance on fossil-based hydrogen for processes like hydrotreating and hydrocracking. Decarbonizing refineries is essential for meeting climate goals, and hydrogen—particularly green hydrogen—plays a central role in this transition.
Refineries consume vast quantities of hydrogen, primarily produced through steam methane reforming (SMR), which relies on natural gas and emits carbon dioxide. Replacing fossil-based hydrogen with green hydrogen, produced via electrolysis using renewable electricity, offers a pathway to drastically reduce emissions. Additionally, integrating carbon capture, utilization, and storage (CCUS) with existing SMR units can mitigate emissions while maintaining current production methods.
The shift to green hydrogen in refineries faces technical and economic challenges. Electrolysis requires substantial renewable energy capacity, and scaling production to meet refinery demand is a logistical hurdle. Current electrolyzer technologies—alkaline, proton exchange membrane (PEM), and solid oxide electrolyzer cells (SOEC)—vary in efficiency, cost, and scalability. PEM electrolyzers, for example, offer faster response times and higher efficiency but at a higher capital cost compared to alkaline systems.
Infrastructure modifications are another barrier. Refineries are designed for centralized hydrogen production, often with pipeline delivery from SMR facilities. Transitioning to green hydrogen may require retrofitting or replacing pipelines to handle higher purity hydrogen, as electrolysis produces hydrogen with fewer impurities than SMR. Storage solutions must also adapt, as green hydrogen production can be intermittent, depending on renewable energy availability.
Economic factors further complicate the transition. Green hydrogen remains more expensive than fossil-based hydrogen due to the high costs of renewable electricity and electrolyzers. As of recent data, SMR-produced hydrogen costs approximately $1.50 to $2.50 per kilogram, while green hydrogen ranges from $3.00 to $6.00 per kilogram, depending on regional energy prices and electrolyzer efficiency. However, declining renewable energy costs and technological advancements are expected to narrow this gap. Policy support, such as carbon pricing or subsidies for green hydrogen, could accelerate adoption.
Carbon capture presents an interim solution for refineries not yet ready to fully transition to green hydrogen. Retrofitting SMR units with CCUS can reduce emissions by up to 90%, though this adds complexity and cost. Captured CO2 can be stored underground or utilized in industrial processes, but infrastructure for transport and storage remains underdeveloped in many regions.
The refinery sector’s decarbonization will likely follow a phased approach. Initial steps may involve blending green hydrogen with fossil-based hydrogen to reduce emissions incrementally. Over time, as production scales and costs decline, full replacement becomes feasible. Pilot projects in Europe and Asia are already testing these models, demonstrating the technical viability of green hydrogen in refining processes.
Despite the challenges, the potential benefits are substantial. Green hydrogen eliminates Scope 1 emissions from hydrogen production and reduces reliance on natural gas, enhancing energy security. When combined with renewable-powered refining processes, the overall carbon footprint of fuel production can approach net-zero.
In summary, hydrogen’s role in decarbonizing refineries hinges on overcoming cost disparities, infrastructure limitations, and technological barriers. Green hydrogen offers a sustainable alternative to fossil-based hydrogen, while CCUS provides a transitional solution. The refining industry’s path to decarbonization will require coordinated efforts among policymakers, technology providers, and refiners to scale solutions and achieve meaningful emissions reductions.