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Drive towards electrification of road transportation may cut global refining capacity demand by half in 2050

September 23/2021

MOSCOW (MRC) -- A global drive towards electrification of road transport to reduce carbon emissions may cut demand for the world's oil refining capacity by half in 2050, reported Reuters with reference to consultancy Rystad Energy.

"Going forward we will be touching by 2050 somewhere very close to 90% of electrification," Mukesh Sahdev, senior vice president and head of downstream at Rystad Energy said, adding that this scenario would probably lead to a 50% decline in global refining capacity.

Electric vehicles will cut global consumption of gasoline and diesel, but demand for other refined oil products in aviation, maritime and petrochemical sectors could remain high because of urbanisation which will pose a challenge to the refining sector, Mukesh said.

"How are we going to meet those demands with a 50% scale down in refining capacity? I think that's a big signal that we might have a lot of shorts in the sectors which are coming with demand," he added.

"This is going to lead to a significant rationalisation of the downstream assets across the entire supply chain."

For example, cokers, upgrading units used to produce gasoline and diesel, would have to tweak their production to produce more petcoke for graphite in batteries, he said, adding that processing crude directly to petrochemicals is another trend.

Still, global oil demand could rise in the short term. The consultancy expects pent-up oil demand from the COVID-19 pandemic to drive up global crude processing to 80.1 million barrels per day in the second half of 2021 as refiners maximise gasoline output.

As MRC informed earlier, Marathon Petroleum, the largest US refiner, is "hopeful" that the US refining sector will recover as demand for gasoline and diesel picks up, but remains cautious about the impact of the spreading delta variant of the coronavirus.

We remind that in May, 2021, US refiner Marathon Petroleum Corp said its board had approved the conversion of the Martinez refinery in California to a renewable diesel plant. Besides, the company made a final investment decision regarding this project. Martinez, once complete, will be one of the largest renewables facilities in the country.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, Europe, crude and gaz condensate, propylene, ethylene, car components, petrochemistry, Marathon, USA.
Category:General News
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