Carbon intensity of global crude oil trading and market policy implications

Abstract

Abstract The energy mix transition has accelerated the need for more accurate emissions reporting throughout the petroleum supply chain. Despite increasing environmental regulations and pressure for emissions disclosure, the low resolution of existing carbon footprint assessment does not account for the complexity of crude oil trading. The lack of source crude traceability has led to poor visibility into the “well-to-refinery-entrance” carbon intensities at the level of granular pathways between producers and destination markets. Using high-fidelity datasets, optimization algorithms to facilitate supply chain traceability and bottom-up, physics-based emission estimators, we show that the variability in global “well-to-refinery-entrance” carbon intensities at the level of crude trade pathways is significant: 4.2–214.1 kg-CO2-equivalent/barrel with a volume-weighted average of 50.5 kg-CO2-equivalent/barrel. Coupled with oil supply forecasts under 1.5 °C scenarios up to 2050, this variability translates to additional CO2-equivalent savings of 1.5–6.1 Gigatons that could be realized solely by prioritizing low-carbon supply chain pathways without other capital-intensive mitigation measures.