Germany's Heide Raffinerie diverts ethanol to disinfectant producers, maintains focus on energy transition

London — Germany's Heide Raffinerie is redirecting deliveries of ethanol to disinfectant producers in response to the coronavirus outbreak, CEO Juergen Wollschlaeger said.

In the last two weeks, Heide loaded 15 trucks to supply around 550 cu m of ethanol to local disinfectant producers. Wollschlaeger said the refinery's logistics are not set up for this kind of operation as ethanol typically is delivered to the refinery by train and it is not a long-term business plan.

The refinery continues to blend ethanol into gasoline as its biofuel obligation remains in place. But the sharp drop in transportation fuel consumption has left excess ethanol, which can be diverted to meet the rising demand for disinfectants — for which ethanol is a key component.

Heide is a middle distillates refinery north of Hamburg with an annual crude refining capacity of 4.5 million mt. The refinery focuses on aviation fuel production, but also manufactures around 450,000 mt of petrochemical products per year, including olefins and aromatics.

As a result of the coronavirus outbreak, a planned turnaround that would have taken a quarter of its capacity offline has been postponed for six months.

Gasoline demand drop estimate overstated, biofuel blending obligations remain

Although restrictions on movement across Europe have seen transportation fuel consumption plummet, especially aviation fuel, Wollschlaeger said the oft-quoted 50-60% estimates on the decline in gasoline consumption in Germany are on the high side in his view. Wollschlaeger also said that within the middle distillates group, the slump in jet fuel consumption has been partly offset by relatively stable diesel consumption due to long haul, heavy duty transportation levels being maintained, while light heating oil demand has also picked up.

Wollschlaeger said there had been some discussions with the German authorities as to whether blending obligations would be maintained in the current circumstances, but there was limited appetite for any amendments, so mandates stand unchanged. The German mandate requires blenders to cut emissions by 6% in 2020 compared with 2010 levels.

Biofuel blending is mandated under Europe's Renewable Energy Directive, with the revised version, RED II, setting the framework up to 2030. RED II also allows green hydrogen to contribute toward meeting the bio-quota, but this still needs to be transposed into German legislation.

Heide sees green hydrogen opportunity

And while addressing the coronavirus outbreak, Heide has kept a keen eye on decarbonization.

The refinery is looking to cut its carbon dioxide production for its industrial operations using grey hydrogen for refined products desulfurization, and from early 2019 green hydrogen has been added to the mix for feedstock purposes.

"The goal is to have a 700 MW of electrolysis capacity installed by 2030, this would be enough to abate 1 million mt of CO2 per year by producing 100,000 mt of hydrogen ... and this is only at our facility," said Wollschlaeger.

To achieve its ambitions, Heide is part of the "Westkuste 100" consortium that includes EDF, Ørsted, Stadtwerke Heide, Thüga and thyssenkrupp Industrial Solutions, which have teamed up to advance the use of green hydrogen for industrial purposes.

The consortium submitted a proposal in early 2019 to the Federal Ministry of Economic Affairs and Energy to seek funds for the project. The outcome is expected to be known by the middle to end of 2020.

"The policy for green energy has yet to be fully developed in Germany," said Wollschlaeger, adding that "there's very good initiatives such as the ones promoted by the Ministry [of Economic Affairs and Energy], but lot of politicians are advocating for electrification while they are holding a dogmatic approach for new tech like hydrogen."

And to further add to the energy policy landscape, 40% of wind energy is curtailed, meaning that the government pays between Eur350 million and Eur370 million a year to stop wind turbines.

"There must be a better way to use this energy," Wollschlaeger said.

The push for developing green hydrogen production came from within Heide, which started its projects independently and without initial governmental funding.

"We believe that is the right path; the project stands on its own, it is commercially viable and we already see the benefits of having included green hydrogen in our processes. We only need to agree on policymaking," said Wollschlaeger.