Mar 24, 2023 at 5:06 AMUpdate: 5 minutes ago
Industrial giants such as Shell, BP and chemical company Dow have a much greater climate impact than their competitors. The companies produce less efficiently, as a result of which they emit hundreds of thousands of extra tons of CO2 every year. This is evident from research by NU.nl.
It makes no difference to your car whether you buy petrol from a Shell, BP or Esso petrol station. But the climate impact of the refineries in which that fuel is made appears to vary considerably. For every ton of product from a Shell or BP refinery, significantly more CO2 is released into the air than from an ExxonMobil refinery. That is the company behind the brand name Esso.
This is evident from figures obtained by NU.nl with an appeal to the Open Government Act. The Dutch Emissions Authority (NEa) has been calculating the CO2 efficiency of the largest emitters in the Netherlands for several years now. This shows how greenhouse gas emissions relate to the production of a factory.
Until now, these figures have only been published per sector. But NU.nl also obtained the figures of individual factories that fall under the supervision of the NEa. For the first time, these provide an insight into the relative climate impact of the industry giants.
Big differences in efficiency
The major differences between the oil refineries are striking. In the years 2018 to 2021, BP performed more than 28 percent worse than the benchmark of the European Commission. That is an efficiency level based on the most climate-friendly companies in a sector.
Simply put: if 1 ton of CO2 goes into the air at BP, that is 0.72 ton at a highly efficient refinery that makes the same products.
Shell is 26 percent below the benchmark. The Zeeland refinery of Total and Lukoil is 17 percent below this and ExxonMobil ‘only’ 15 percent.
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900.000 ton CO2 extra
These differences may not seem large, but the enormous emissions of the Shell and BP refineries still involve considerable amounts of greenhouse gases. Together, oil refineries account for 6 percent of all CO2 emitted in the Netherlands.
If the Shell and BP refineries were to perform as efficiently as the EU benchmark, this would save around 1.7 million tonnes of CO2 emissions annually. Even if BP and Shell only matched the performance of competitor ExxonMobil, that would save about 900,000 tons of CO2 per year. This is evident from calculations by NU.nl that have been checked by the NEa. The decrease is equivalent to 5 percent of the total that the entire Dutch industry must achieve in 2030 in order to meet the cabinet’s climate goals.
With lower emissions, the oil companies would also save a lot of money. Because for their emissions above the EU standard, they have to purchase CO2 rights. These currently cost almost 90 euros per tonne of CO2.
‘Working on solutions’
BP did not respond to multiple requests for comment. A spokesman for Shell acknowledges that the company is “not doing well at the moment” in the figures of the NEa. “We are familiar with this and are therefore working on solutions.”
According to the spokesperson, the poor score is related to the heavy oil residues that Shell processes itself, which causes the company to emit more emissions. But the same goes for competitor ExxonMobil, which has a better score. According to the NEa, the efficiency figure already takes into account the complexity of refineries.
The refineries want to become more sustainable in the coming years by storing CO2 from their chimneys under the North Sea. The oil companies are also investing in sustainable hydrogen. This should lead to major reductions in emissions before 2030, although the best-known CO2 storage project is at risk of being delayed due to the nitrogen crisis. Ultimately, the oil companies want to start producing synthetic fuels. They do not cause any CO2 emissions.
“There is clearly work to be done,” concludes Kornelis Blok, professor of energy systems at TU Delft. “The results confirm my impression that little has been invested in energy saving in recent years. Companies often limit themselves to measures that pay for themselves very quickly, within one or two years. And the transition to low-CO2 fuel has yet to get under way. .”
There are also major differences among chemical companies
The figures show that there are also major differences within the chemical sector. Dow, the fourth-largest industrial emitter, scored about 25 percent worse than the benchmarks that apply to the company in 2021. Shell’s chemical branch in Moerdijk is 19 percent below that level. The companies at the Chemelot complex in Limburg are jointly barely 9 percent below the EU standard and are therefore relatively climate-friendly.
If Dow were to perform as well as the most efficient companies, this would in any case save many hundreds of thousands of tons of CO2 emissions per year. An exact number cannot be calculated on the basis of public figures, as the company has its own power station on site. This does not count towards the efficiency score, but towards the total emissions.
Most of Dow’s emissions come from the company’s steam crackers. In the future, they will run on hydrogen and gas turbines will be replaced by electric motors. For example, the company wants to emit 1.7 million tons of CO2 less in 2030. “This means that the efficiency will be well below the benchmark,” says a spokesperson.
Shell says it is currently installing new stoves in Moerdijk. These must reduce the emissions of the chemical branch by 10 percent. With this, according to a spokesman, the company wants to get “more firmly at the top of the sector”.
It is striking that Dow, Shell and Chemelot have not seen any clear efficiency improvements in recent years. Last year, the NEa already concluded that the same applies to Dutch industry as a whole.
Cabinet makes agreements with major emitters
Minister Micky Adriaansens (Economic Affairs and Climate) is working on tailor-made agreements with the twenty largest industrial emitters in the Netherlands. If companies make a binding agreement to become more sustainable before 2030, the government is prepared to support them with billions in subsidies from the climate fund.
Dow is one of the companies that have already signed a letter of intent with the minister. It is not yet clear how much subsidy the government is willing to grant. Adriaansens hopes to make a final appointment with Dow before the summer.
Shell, BP, ExxonMobil and various companies on the Chemelot site are also on the list of major emitters. Talks about climate agreements are still ongoing with those groups, the minister wrote to the House of Representatives last month.
Methanol producer scores well
Some large emitters are close to the European top, according to the new figures. In addition to Chemelot, steel factory Tata Steel and fertilizer manufacturer Yara are also not far below the European benchmarks: 7.6 and 3.1 percent respectively in 2021. Tata Steel is the largest industrial emitter of greenhouse gases in the Netherlands, Yara is number five.
Among the major emitters, methanol producer OCI in Delfzijl is the greenest. The company uses biogas instead of natural gas. As a result, in 2021 it even scored more than twice as good as the companies that are most efficient according to the EU. For example, more than 330,000 tons of CO2 have been emitted less. Companies in the Dutch paper sector also score relatively well.
Jos Cozijnsen, expert emissions trading at Climate Neutral Group, calls the efficiency figures “super interesting”. He emphasizes that the European emissions trading system forces companies to reduce emissions, because fewer and fewer CO2 allowances are available. In 2039, large industry will no longer be allowed to emit anything. “You can see that paper companies such as Smurfit Kappa already score better than the EU standard. That industry has been investing in efficiency for some time.”
About this research
NU.nl requested the CO2 efficiency scores of all 264 industrial installations that fall under the European emissions trading system. It concerns the years 2018 to 2021. In our reporting, we focus on the largest emitters in the Netherlands, because emissions there will also have to be reduced the most in order to meet the climate targets. Efficiency scores are calculated using confidential production figures. According to the NEa, these confidential figures can be derived from the efficiency score of some companies. Following advice from competition watchdog ACM, it was therefore decided not to publish individual annual scores for these companies, but only an average over the years 2018 to 2021. This is the case, for example, at four of the six oil refineries. Different companies fall under different European benchmarks depending on what products they make. That is why in this article we compare as many companies in the same sector as possible. The benchmarks are based on the 10 percent best performing companies in a given sector. For technical reasons, there are many companies in some sectors that perform at least as well as the benchmark, while in other sectors this is (almost) impossible. On the NEa site you can read more about the calculation method behind the benchmarks and efficiency scores. Outside the Netherlands, EU regulators have not yet published comparable efficiency scores. As a result, it is not possible, for example, to compare Tata Steel’s efficiency with direct competitors. They are all across the border. Two companies have formally objected to making their scores public. One of these is gas manufacturer Air Products, which ranks eleventh in the ranking of the largest industrial emitters. The other company is Electric Glass Fiber, a small fiber optic manufacturer from Groningen. While the appeal procedure is ongoing, their efficiency scores are not yet published.
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