Phillips 66 is exploring opportunities to fill gaps in the electric vehicle supply chain at a high level with government, after ramping up production of vital battery feedstocks.
Synthetic graphite production, a “fortuitous” legacy of steelmaking support, has increased 160 per cent in the past few years, with dedicated products for anodes in lithium ion batteries now produced at the Humber Refinery.
Initial capability to support getting 500,000 vehicles on the road is now at 1.3 million, forming a key strand of its vision to become the refinery of the future.
Read more: COP26 ambition and asks set out by Humber leaders ready to lead the world to Net Zero
But while battery manufacturing and car-building exists in the UK, the production of cells to make up the sets remains offshore.
“A real focus for the Humber Refinery is the EV battery coke that really stands us alone, not just in the UK but in Europe as the only producer of that,” Mike Wailes, director of European strategy for Phillips 66 said.
“We do see strong demand in EV, and we want to be part of that. Fortuitously, previously part of steel manufacturing, we make very specialist graphites, at a global scale from Humber Refinery, and we started to see five years ago that people we were selling them to were selling them on to EV manufacturers. We realised quickly there was an opportunity there, and we configured that, and we have blends and grades that we make specifically for EVs now, things that sustain the power charge longer.
“We are a world-scale producer, already making the equivalent of 1.3 million vehicles a year of EV battery coke, and unfortunately, there is not really the supply chain in the UK.
"We are shipping it out to China, and we are starting to see the [battery manufacturing] announcements, in Sunderland and with Jaguar Land Rover, and we want to see the UK value chain filled out. We don’t want to be shipping our product out to China to be manufactured into cells then shipped back to someone who puts it into a vehicle battery.
“We are speaking to the UK government on that opportunity, and we will see where that comes out.
“Unless you can do it in-house, we are going to be exporting to the Far East, and then re-importing.”
Addressing The Waterline Summit - the Humber’s huge decarbonisation showcase - he said: “We are looking at that value chain and how far we want to go.
"Right now it is components of a battery, and then you have the precious metals and things like that. All those sections, the milling, shaping, graphitisation, getting into the fuel cells and then the actual battery itself.
“A lot of the gaps in the value chain between end production and raw products we have here are very energy intensive and are done in China because power is cheap and environmental regulations are more lax.
“The graphitisation is a huge energy consumer, and if you are going to do these steps, you are going to need the business model like you have for hydrogen and carbon capture. So far we have not really seen that. It will be interesting to see how funding for EVs is deployed, but if we are really going to see the domestic content we have signed up to, we are going to have to fill in the EV gaps. It is at a very high level at the minute.”
As reported, magnet metal processing is coming to Saltend, another key element.
Should formative proposals emerge, it could lead to significant investment and further employment, with the refinery - a huge driver of the regional economy - already employing more than 1,000 people.
Decarbonising the products and decarbonising the asset
Already with more than 50 years production under its belt, this adapted stream is a key strand in Phillips 66's vision for the Humber beyond 2050.
Explaining the wider approach, Mr Wailes said: “The refinery of the future is a concept we have started to develop, around what a refinery needs to be to be relevant in 2050.
“We are going to transition out of crude, we are going to be producing products that the public want, decarbonised products, and we are going to decarbonise the asset.
“You have renewable power and green hydrogen going in at the front end, and the back end you want the decarbonised products.
“It is three core pieces; we have already started the transition into new feeds, waste oils, processing bioorganic waste - problematic waste that would typically go to landfill. We are going to see a demand for a circular economy for plastics, you don’t just decarbonise the fuel, you decarbonise the plastics that the UK and globe needs, so it is about recycling those non-recyclable plastics, and a refinery is a multi-billion pound conversion asset.
“We have got 50 units on site, all of them do different things to convert molecules and whether it is crude going into the front end or other feedstocks, we can still use that asset base.”
And carbon capture and storage is seen as key to achieving it all, with the South Killingholme site sitting on both the track one Zero Carbon Humber pipeline and V Net Zero, a project committed to as part of the Humber Zero plan ahead of the former gaining forerunner status this week.
“The hot spot is Immingham, two refineries and power stations, sat at the crux of two pipelines, that have been premised for the region,” Mr Wailes said, looking at the potential.
“That is world-scale, we are looking at eight million tonnes a year with very high capital efficiency because of the scale of the carbon that you can get in one combined area.
“We have Zero Carbon Humber, part of East Coast Cluster, and you have got V Net Zero, we are very well positioned with access to those two pipelines.”
For blue hydrogen, Uniper sits next door, while Phillips 66 is also a partner in Gigastack - with Orsted, ITM Power and Element Energy. It is looking to tap into electrolysis using the world’s largest offshore wind farm, currently in construction.
“We view that as a rapid deployment opportunity, and we’re trying to move that forward with the government as we wrap up the work we are currently doing,” Mr Wailes said.
“It is a 100MW design, a long way through detailed design, producing non-hydrocarbon hydrogen.
“What we bring is industrial scale demand offtake. We have that ability, we are using a lot of hydrogen today, we are able to refuel industrial scale furnaces at the refinery.”
That could green up the EV value chain proposal, while another gap is also addressed - the reduction of emissions in conventional fuel.
“There is a need to fill the gap with what we have today,” Mr Wailes said. “A lot of vehicles have combustion engines, so it is about decarbonising those fuels.
"We have been able to produce fuels that are audited independently then checked by the Department for Transport, and those greenhouse gas reductions are in the region of 90 to 95 per cent, versus a hydrocarbon molecule, so the vast majority of the GHG is being taken out of the road fuel today.
“We are feedstock agnostic, we’re not producing oil and gas, we’re indifferent to what comes in, and that’s a big incentive that we can change and reduce our crude consumption.
“We do a lot of work with the DFT, the Road Transport Fuel Obligation crop cap is an important piece driving us to waste fuels, and that gets in to development fuels.
“It came into law in 2019, no-one has been able to produce them, that really is zero value problematic waste being converted into chemically identical fuels, and we have started to do that as the first commercial producer at any scale. We first stated to do that at the start of 2021, got that accredited by the DFT a few months ago, it is probably not something you’d expect an oil refinery to be doing, but we are converting real problematic waste streams and making the first development fuels at scale, and that’s going into diesel and gasoline.
“We also process waste oils, we started in 2017 and tripled capacity last year.
The latter has been welcomed by Gaynor Hartnell, chief executive of the Renewable Transport Fuel Association.
She said: “We really need to strive and be as ambitious as we can in the time we have these internal combustion engines on the road.
“All the while we have internal combustion engines on the road we want to get them less polluting - not prolonging their life - making them better.”
She is keen to see a focus on tailpipe emissions rather than demonising the traditional motor, with concerns over heavy transport transition.
Launched a year ago, membership has tripled in size, with Phillips 66 as well as Greenergy, Vivergo and Velocys all on board in the Humber region.
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