IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v37y2009i12p5519-5529.html
   My bibliography  Save this article

The impact of CO2 taxation on the configuration of new refineries: An application to Brazil

Author

Listed:
  • Gomes, Gabriel Lourenço
  • Szklo, Alexandre
  • Schaeffer, Roberto

Abstract

This article evaluates the impact of pricing CO2 emissions over the configuration of new refinery complexes in their conceptual phase. Two refineries' schemes were simulated through a linear programming optimization model in order to compare the optimum configuration obtained before and after the input of different CO2 prices. The cases analyzed represent refining projects to be located in Brazil, a growing market for fuels and petrochemical feedstocks, as well as an oil producing country with rising crude exports. After 2012, emerging countries, such as Brazil, may adopt carbon emission reduction targets. Therefore, it is worth analyzing the impact of pricing CO2 emissions in these countries, where the majority of new refining projects will be located. Our findings indicate that the initial refinery configurations proposed are quite rigid technologically for CO2 prices up to US$ 100/t CO2. For CO2 prices higher than US$ 100/t CO2, refineries reduced their emissions by increasing the consumption of natural gas used to produce hydrogen, and through changes in the original configurations towards less-energy consuming process units. Promising technological advances, such as carbon capture and storage (CCS), can also diminish the rigidity of the model and facilitate actions to curb carbon emissions.

Suggested Citation

  • Gomes, Gabriel Lourenço & Szklo, Alexandre & Schaeffer, Roberto, 2009. "The impact of CO2 taxation on the configuration of new refineries: An application to Brazil," Energy Policy, Elsevier, vol. 37(12), pages 5519-5529, December.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:12:p:5519-5529
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(09)00601-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wagbara, Obindah N., 2007. "How would the gas exporting countries forum influence gas trade?," Energy Policy, Elsevier, vol. 35(2), pages 1224-1237, February.
    2. Mathias, Melissa Cristina & Szklo, Alexandre, 2007. "Lessons learned from Brazilian natural gas industry reform," Energy Policy, Elsevier, vol. 35(12), pages 6478-6490, December.
    3. Robinson, Terry, 2007. "Have European gas prices converged?," Energy Policy, Elsevier, vol. 35(4), pages 2347-2351, April.
    4. Kaufmann, Robert K. & Dees, Stephane & Gasteuil, Audrey & Mann, Michael, 2008. "Oil prices: The role of refinery utilization, futures markets and non-linearities," Energy Economics, Elsevier, vol. 30(5), pages 2609-2622, September.
    5. Dutra, Ricardo & Szklo, Alexandre, 2008. "Assessing long-term incentive programs for implementing wind power in Brazil using GIS rule-based methods," Renewable Energy, Elsevier, vol. 33(12), pages 2507-2515.
    6. repec:wbk:wboper:13404 is not listed on IDEAS
    7. Pierru, Axel, 2007. "Allocating the CO2 emissions of an oil refinery with Aumann-Shapley prices," Energy Economics, Elsevier, vol. 29(3), pages 563-577, May.
    8. Ren, Tao & Patel, Martin K. & Blok, Kornelis, 2008. "Steam cracking and methane to olefins: Energy use, CO2 emissions and production costs," Energy, Elsevier, vol. 33(5), pages 817-833.
    9. Bentley, R. W., 2002. "Global oil & gas depletion: an overview," Energy Policy, Elsevier, vol. 30(3), pages 189-205, February.
    10. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2008," World Bank Publications - Reports 13405, The World Bank Group.
    11. Szklo, Alexandre & Schaeffer, Roberto, 2007. "Fuel specification, energy consumption and CO2 emission in oil refineries," Energy, Elsevier, vol. 32(7), pages 1075-1092.
    12. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2007," World Bank Publications - Reports 13407, The World Bank Group.
    13. Ellis, Andrew & Bowitz, Einar & Roland, Kjell, 2000. "Structural change in Europe's gas markets: three scenarios for the development of the European gas market to 2020," Energy Policy, Elsevier, vol. 28(5), pages 297-309, May.
    14. repec:wbk:wboper:13406 is not listed on IDEAS
    15. Davison, John, 2007. "Performance and costs of power plants with capture and storage of CO2," Energy, Elsevier, vol. 32(7), pages 1163-1176.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Johansson, Daniella & Rootzén, Johan & Berntsson, Thore & Johnsson, Filip, 2012. "Assessment of strategies for CO2 abatement in the European petroleum refining industry," Energy, Elsevier, vol. 42(1), pages 375-386.
    2. Al-Salem, S.M., 2015. "Carbon dioxide (CO2) emission sources in Kuwait from the downstream industry: Critical analysis with a current and futuristic view," Energy, Elsevier, vol. 81(C), pages 575-587.
    3. de Barros, Marisa Maia & Szklo, Alexandre, 2015. "Petroleum refining flexibility and cost to address the risk of ethanol supply disruptions: The case of Brazil," Renewable Energy, Elsevier, vol. 77(C), pages 20-31.
    4. Fernanda Guedes & Alexandre Szklo & Pedro Rochedo & Frédéric Lantz & Leticia Magalar & Eveline Maria Vásquez Arroyo, 2018. "Climate-Energy-Water Nexus in Brazilian Oil Refineries," Working Papers hal-03188594, HAL.
    5. Borba, Bruno S.M.C. & Lucena, André F.P. & Rathmann, Régis & Costa, Isabella V.L. & Nogueira, Larissa P.P. & Rochedo, Pedro R.R. & Castelo Branco, David A. & Júnior, Mauricio F.H. & Szklo, Alexandre &, 2012. "Energy-related climate change mitigation in Brazil: Potential, abatement costs and associated policies," Energy Policy, Elsevier, vol. 49(C), pages 430-441.
    6. Joshi, Jignesh M. & Dalei, Narendra N. & Mehta, Pratik, 2021. "Estimation of gross refining margin of Indian petroleum refineries using Driscoll-Kraay standard error estimator," Energy Policy, Elsevier, vol. 150(C).
    7. Aragão, Amanda & Giampietro, Mario, 2016. "An integrated multi-scale approach to assess the performance of energy systems illustrated with data from the Brazilian oil and natural gas sector," Energy, Elsevier, vol. 115(P2), pages 1412-1423.
    8. Castelo Branco, David A. & Szklo, Alexandre & Gomes, Gabriel & Borba, Bruno S.M.C. & Schaeffer, Roberto, 2011. "Abatement costs of CO2 emissions in the Brazilian oil refining sector," Applied Energy, Elsevier, vol. 88(11), pages 3782-3790.
    9. Castelo Branco, David A. & Gomes, Gabriel L. & Szklo, Alexandre S., 2010. "Challenges and technological opportunities for the oil refining industry: A Brazilian refinery case," Energy Policy, Elsevier, vol. 38(6), pages 3098-3105, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mathias, Melissa Cristina & Szklo, Alexandre, 2007. "Lessons learned from Brazilian natural gas industry reform," Energy Policy, Elsevier, vol. 35(12), pages 6478-6490, December.
    2. Rahimpour, M.R. & Mirvakili, A. & Paymooni, K., 2011. "A novel water perm-selective membrane dual-type reactor concept for Fischer–Tropsch synthesis of GTL (gas to liquid) technology," Energy, Elsevier, vol. 36(2), pages 1223-1235.
    3. Philipp Pattberg & Johannes Stripple, 2008. "Beyond the public and private divide: remapping transnational climate governance in the 21st century," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 8(4), pages 367-388, December.
    4. Steven Brakman & Charles van Marrewijk & Arjen van Witteloostuijn & Charles van Marrewijk, 2009. "Market Liberalization in the European Natural Gas Market - The Importance of Capacity Constraints and Efficiency Differences," CESifo Working Paper Series 2697, CESifo.
    5. Gavenas, Ekaterina & Rosendahl, Knut Einar & Skjerpen, Terje, 2015. "CO2-emissions from Norwegian oil and gas extraction," Energy, Elsevier, vol. 90(P2), pages 1956-1966.
    6. Jinshan Zhu & Hui Yao & Yingkai Tang & Liyong Wang, 2015. "An econometric analysis of sub-national Clean Development Mechanism performance in China," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1137-1153, October.
    7. Jinshan Zhu, 2014. "Assessing China's discriminative tax on Clean Development Mechanism projects. Does China's tax have so many functions?," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(3), pages 447-466, March.
    8. Olivier Massol & Stéphane Tchung-Ming, 2009. "Stratégies coopératives dans l'industrie du GNL : l'argument de la rationalisation est-il fondé ?," Working Papers hal-02469480, HAL.
    9. Castelo Branco, David A. & Szklo, Alexandre & Gomes, Gabriel & Borba, Bruno S.M.C. & Schaeffer, Roberto, 2011. "Abatement costs of CO2 emissions in the Brazilian oil refining sector," Applied Energy, Elsevier, vol. 88(11), pages 3782-3790.
    10. Massol, Olivier & Tchung-Ming, Stéphane, 2010. "Cooperation among liquefied natural gas suppliers: Is rationalization the sole objective?," Energy Economics, Elsevier, vol. 32(4), pages 933-947, July.
    11. Bryan, Elizabeth & Akpalu, Wisdom & Yesuf, Mahmud & Ringler, Claudia, 2008. "Global carbon markets: Are there opportunities for Sub-Saharan Africa?," IFPRI discussion papers 832, International Food Policy Research Institute (IFPRI).
    12. Stefan Schleicher & Claudia Kettner-Marx & Angela Köppl & Barbara Anzinger & Bernhard Cemper & Andreas Türk & Andreas Karner, 2011. "Analysis of Options to Move Beyond 20 Percent Greenhouse Gas Emission Reductions. Background and Evaluation of Impact Documents," WIFO Studies, WIFO, number 41607, April.
    13. Jinshan Zhu, 2017. "Assessing China’s price review policy on Clean Development Mechanism projects," European Journal of Law and Economics, Springer, vol. 43(2), pages 285-316, April.
    14. Sam Fankhauser & Cameron Hepburn, 2009. "Carbon markets in space and time," GRI Working Papers 3, Grantham Research Institute on Climate Change and the Environment.
    15. Claudia Kettner-Marx & Daniela Kletzan-Slamanig & Angela Köppl, 2012. "The EU Emission Trading Scheme. National Allocation Patterns and Trading Flows," WIFO Studies, WIFO, number 44139, April.
    16. Ugo Bardi & Alessandro Lavacchi, 2009. "A Simple Interpretation of Hubbert’s Model of Resource Exploitation," Energies, MDPI, vol. 2(3), pages 1-16, August.
    17. Silvério, Renan & Szklo, Alexandre, 2012. "The effect of the financial sector on the evolution of oil prices: Analysis of the contribution of the futures market to the price discovery process in the WTI spot market," Energy Economics, Elsevier, vol. 34(6), pages 1799-1808.
    18. Mohamed Amine BOUTABA, 2009. "Does Carbon Affect European Oil Companies' Equity Values?," EcoMod2009 21500018, EcoMod.
    19. Mo, Jian-Lei & Schleich, Joachim & Zhu, Lei & Fan, Ying, 2015. "Delaying the introduction of emissions trading systems—Implications for power plant investment and operation from a multi-stage decision model," Energy Economics, Elsevier, vol. 52(PB), pages 255-264.
    20. Lai, N.Y.G. & Yap, E.H. & Lee, C.W., 2011. "Viability of CCS: A broad-based assessment for Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3608-3616.

    More about this item

    Keywords

    Oil refinery CO2 taxation Brazil;

    JEL classification:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:12:p:5519-5529. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.