BAZAN Group
BAZAN Group, operating through Oil Refineries Ltd., is Israel's preeminent integrated energy conglomerate specializing in oil refining and petrochemical production, situated in the Haifa Bay industrial zone.[1] With a daily crude oil processing capacity of 197,000 barrels, it generates fuels, polypropylene, polyethylene, and aromatics, fulfilling over 70% of the nation's domestic petroleum requirements while exporting the balance primarily to eastern Mediterranean markets.[2] The group encompasses subsidiaries Carmel Olefins Ltd. and Gadiv Petrochemical Industries Ltd., enabling synergistic operations that position BAZAN as a cornerstone of Israeli industry and a high-complexity facility ranked 9 on the Nelson Complexity Index.[1][2] Despite its economic significance and adherence to Euro V emission standards, BAZAN has encountered environmental challenges, including criminal charges for air pollution violations and structural failures such as a cooling tower collapse.[3][4] In June 2025, the Haifa complex suffered damage from an Iranian missile strike, claiming three lives and necessitating partial shutdowns, though operations have since partially resumed with full restoration anticipated.[5][6]History
Founding and Pre-State Operations (1930s–1948)
The Haifa oil refinery, precursor to the BAZAN Group, was established under the British Mandate for Palestine by Consolidated Refineries Limited (CRL), a joint venture between Royal Dutch Shell and the Anglo-Iranian Oil Company (now BP), to process crude oil arriving via the newly operational Kirkuk-Haifa pipeline from Iraq.[7][8] Construction of the initial refining units commenced in October 1938 near the pipeline terminal in Haifa Bay, undertaken primarily by the American engineering firm M.W. Kellogg Company, with construction support provided by Solel Boneh, the Jewish Agency-affiliated labor federation's building cooperative.[9][10] The first unit entered operation in November 1939, enabling initial refining of Iraqi crude into gasoline, kerosene, and other products, though full complex completion extended into the early 1940s amid World War II disruptions.[10][8] Operations during the 1940s relied on a mix of pipeline-supplied oil from Kirkuk—accounting for roughly half the feedstock—and tanker imports of crude from ports like Tripoli, reflecting the refinery's strategic role in regional energy supply under British oversight.[11] By mid-1943, the facility employed approximately 1,000 workers, positioning it as one of Palestine's largest industrial sites and a hub for both Arab and Jewish labor, with the Palestine Arab Workers Society maintaining a notable presence amid Mandate-era labor tensions.[12] The refinery's output supported military demands during the war, including aviation fuel, but faced supply constraints post-1945 due to geopolitical shifts in Middle Eastern oil transit. As the Mandate unraveled in 1948, escalating violence prompted CRL to halt operations on April 12, 1948, with a short resumption in July under provisional arrangements before permanent closure amid the Arab-Israeli conflict; Iraqi oil flows via the pipeline ceased entirely by late April.[13][10] This pre-state phase laid the infrastructural foundation for Israel's subsequent energy independence efforts, though CRL's British ownership underscored foreign control until nationalization post-independence.[8]Post-Independence Nationalization and Expansion (1948–1980s)
Following Israel's declaration of independence in May 1948, the Haifa refinery, previously operated by Consolidated Refineries Ltd. (CRL) under British ownership, had ceased full operations on April 12, 1948, amid regional hostilities and strikes.[13] It briefly resumed in July 1948 but remained largely idle until mid-1950, when British companies agreed to partial-capacity operations using imported crude oil, primarily from Iran, to circumvent the Arab oil boycott.[14] This arrangement processed about 25% of pre-1948 throughput by 1949, supporting Israel's nascent energy needs despite supply constraints.[15] Pressures from the Arab League boycott on firms trading with Israel prompted the British government to divest from CRL, culminating in the sale of the Haifa refinery to the State of Israel in 1958, with formal agreement in 1959.[7] [16] Renamed Oil Refineries Ltd. (ORL) in 1959 and later confirmed in 1972, the facility transitioned to full state ownership, rejecting earlier parliamentary motions for outright nationalization without compensation, such as a 1950s Communist proposal targeting partial Shell ownership.[8] [17] Under government control, ORL invested in upgrades to modernize obsolete infrastructure, expanding refining capacity to process heavier crudes and meet rising domestic demand. A pivotal expansion occurred in the late 1960s with the completion of the Eilat-Ashkelon pipeline in 1968, enabling direct transport of Iranian crude oil to Haifa and boosting throughput to near-full capacity by August 2, 1968.[18] This infrastructure, developed to evade maritime blockades, facilitated further plant enhancements through the 1970s, including secondary units for higher-value products. By the 1980s, ORL had begun integrating petrochemical operations, leveraging refining byproducts for basic chemical production, though full-scale diversification awaited later decades; these efforts solidified the site's role as Israel's primary energy hub amid global oil shocks.[8]Privatization and Modern Restructuring (1990s–Present)
In the 1990s, Israel's government pursued energy market liberalization to reduce state monopolies, including deregulating fuel imports and establishing price linkages to global benchmarks, which eroded the protected status of state-owned refineries like Oil Refineries Ltd. (ORL) and prompted efficiency-driven reforms.[19] These measures, implemented amid broader fiscal stabilization efforts since 1990, exposed ORL to competitive pressures and set the stage for privatization by diminishing its import barriers, such as exclusive access to Haifa's refining port.[20] By the early 2000s, the government restructured ORL by splitting it into separate Haifa and Ashdod entities to promote rivalry and enhance sale value, repurchasing shares from private holders like Israel Corporation between 2002 and 2005 for approximately $120 million to facilitate divestment.[21] In September 2006, the Ashdod refinery was privatized and sold to Paz Oil for $676 million, marking the first major divestment in the sector.[21] The Haifa operations, rebranded as BAZAN Group (formerly ORL), followed in February 2007 with Israel's largest-ever public offering, generating $1.57 billion as the state fully exited ownership; control passed to a consortium including Israel Corporation (initially around 33.5%) and other investors, with shares listed on the Tel Aviv Stock Exchange under the symbol "BAZAN."[22][2] Post-privatization restructuring focused on vertical integration and operational consolidation. In 2009, BAZAN merged with Carmel Olefins Ltd. to streamline petrochemical production, followed in 2010 by full acquisition of Haifa Basic Oils Ltd., consolidating refining inputs and reducing external dependencies.[23] These moves enhanced supply chain efficiency amid competitive duopoly with Paz Oil, though they drew scrutiny for potential environmental trade-offs in Haifa Bay. Ownership evolved further, with Israel Petrochemical Enterprises Ltd. acquiring a controlling stake from Israel Corporation for NIS 550 million in a complex transaction, positioning it as the primary shareholder alongside public holdings of about 51.5%.[24] Ongoing modernization includes facility upgrades for compliance and capacity, such as advanced refining technologies commissioned around 2012, adapting to global shifts toward lower-emission operations.[2]Corporate Structure and Operations
Core Refining and Petrochemical Facilities
The BAZAN Group's core facilities form an integrated refining and petrochemical complex in Haifa Bay, Israel, processing crude oil into fuels and chemical feedstocks.[1] The refinery handles multiple crude types through units for distillation, vacuum processing, and catalytic cracking at temperatures up to 900°C and pressures of 180 atmospheres.[25] Refining capacity reaches a maximum of 197,000 barrels per day, equivalent to 9.8 million tons annually, with typical utilization around 90%.[25] This yields outputs including gasoline, diesel, kerosene, liquefied petroleum gas, and bitumen, alongside naphtha and other intermediates supplied to on-site petrochemical operations.[25] Petrochemical production leverages refinery byproducts and natural gas, with subsidiaries such as GADIV Petrochemical Industries Ltd. generating over 500,000 tons yearly of aromatics like benzene and xylene, aliphatic solvents, and intermediates for plastics, paints, and pharmaceuticals.[26] Carmel Olefins Ltd. adds polymer capabilities, producing approximately 450,000 tons of polypropylene and 170,000 tons of polyethylene per year.[1] Overall aromatics output approximates 580,000 tons annually, supporting downstream applications in textiles, automotive components, and chemicals.[1] The complex's design enables synergistic feedstock flows, enhancing efficiency and product diversity.[25]Subsidiaries and Integrated Entities
The BAZAN Group, through its parent company Oil Refineries Ltd., maintains full ownership of key subsidiaries focused on petrochemical production, which are operationally integrated with the core refining complex in Haifa Bay to enable efficient feedstock utilization and product synergy.[2] These entities process refinery outputs into higher-value chemicals and polymers, contributing to the group's vertical integration in the energy and materials sectors.[2] Carmel Olefins Ltd., 100% owned by BAZAN, operates facilities for producing olefin-based polymers, including polypropylene and polyethylene, with applications in plastics manufacturing for packaging, automotive parts, and consumer goods.[2] This subsidiary leverages propylene feedstock derived from the adjacent refinery processes.[2] Gadiv Petrochemical Industries Ltd., also 100% owned, specializes in aromatic petrochemicals such as benzene, paraxylene, orthoxylene, and toluene, which are essential feedstocks for downstream industries like synthetic fibers, solvents, and resins.[2] Its production is tightly coupled with the refinery's naphtha cracking units for optimal yield.[2] [27] Carmel Olefins further owns Ducor Petrochemicals B.V., a fully consolidated entity located in Rotterdam, Netherlands, with an annual polypropylene production capacity of 180,000 metric tons, expanding BAZAN's global footprint in polymer markets.[2] [28] The subsidiaries function as integrated extensions of the Haifa refinery, sharing infrastructure for utilities, storage, and logistics, which enhances operational efficiency and reduces costs through captive supply chains.[2] This structure supports BAZAN's position as Israel's primary integrated refining and petrochemical hub, processing up to 197,000 barrels of crude oil daily to feed downstream operations.[2]Products and Technological Capabilities
Refined Petroleum Outputs
The BAZAN Group's Haifa refinery processes crude oil into a range of refined petroleum products, with a maximum capacity of approximately 197,000 barrels per day, equivalent to 9.8 million tons annually, operating at an average utilization rate of around 90%.[25] The refining process involves distillation at high temperatures up to 900°C and pressures up to 180 atmospheres, followed by catalytic cracking and finishing treatments to meet product specifications, yielding a Nelson Complexity Index of 9 out of 10 for advanced processing capabilities.[25] Key outputs include liquefied petroleum gas (LPG), primarily used for cooking, heating, and vehicle fuel, separated at boiling points around 20°C.[29] Naphtha, distilled at approximately 50°C, serves as a feedstock for petrochemicals, polymers, paints, and chemicals.[29] Gasoline (petrol), produced for motor vehicles with boiling points up to 100°C, adheres to low benzene levels of 0.55%, below the 1% regulatory standard achieved through optimized hydrotreating.[29] Kerosene, refined at around 170°C for use as jet fuel in aviation, meets international aviation standards.[29] Diesel fuel, distilled at approximately 270°C for heavy vehicles, cars, and heating, includes a green diesel variant (B7 blend) introduced in 2022 incorporating biodiesel components.[29] Heavier fractions yield fuel oil at 500°C for shipping and industrial heating, and bitumen for road paving, roofing, and marine fuels.[29] These products supply domestic markets in Israel for transport, industry, agriculture, and households, with portions exported to regional Mediterranean countries and beyond.[25] Production volumes vary with crude slate and demand, but the refinery's integration with downstream petrochemical units enhances yield efficiency for lighter fuels like gasoline and diesel.[30]Petrochemical and Polymer Productions
The petrochemical operations of the BAZAN Group are integrated with its refining activities in Haifa Bay, primarily through subsidiaries Carmel Olefins Ltd. (CAOL) and Gadiv Petrochemical Industries Ltd., producing key intermediates and downstream products derived from crude oil fractions. CAOL operates a steam cracker unit with an annual capacity of 240,000 metric tons of ethylene and 160,000 metric tons of propylene, serving as feedstocks for polymer manufacturing.[31] These olefins represent core petrochemical outputs, with ethylene and propylene used both internally and externally as building blocks for plastics and chemicals.[32] Gadiv focuses on aromatics production, manufacturing benzene, toluene, mixed xylene, orthoxylene, paraxylene, phthalic anhydride, and solvents such as Solgad series products, with an annual output exceeding 500,000 metric tons of petrochemicals.[33] The facility processes approximately one million tons of reformate and 100,000 tons of dripolene annually to yield these compounds, which are supplied to industries for resins, solvents, and further chemical synthesis.[34] Benzene and toluene, for instance, are key raw materials in plastics and adhesive production, while xylenes support polyester and coating applications.[33] Polymer production is handled by CAOL, established in 1989 and acquired by BAZAN in 2009, making it Israel's sole producer of polypropylene (PP) and low-density polyethylene (LDPE).[35] The company operates a four-line LDPE cluster with a total capacity of 180,000 tons per year and two-line PP facilities, utilizing advanced polymerization technologies for standard and specialty grades under trademarks like Ipethene® for LDPE and Capilene® for PP.[28][36] PP accounts for about 66% of polymer output, with LDPE comprising the remainder, serving approximately 350 domestic and 200 international customers in the plastics sector for packaging, films, and molded goods.[35] Recent initiatives include plans for renewable feedstock integration to produce bio-based olefins and polyolefins, aiming to expand sustainable polymer capacities.[36]Financial Performance
Historical Trends and Key Metrics
BAZAN Group's financial performance has been characterized by high volatility, primarily influenced by global oil price fluctuations, refining crack spreads, and geopolitical events affecting energy markets. From 2016 to 2024, adjusted consolidated EBITDA varied significantly, reaching a low of $121 million in 2020 amid the COVID-19-induced demand collapse and a high of $776 million in 2022 driven by surging prices following Russia's invasion of Ukraine. The nine-year average adjusted EBITDA during this period was $493 million, underscoring the cyclical nature of the refining sector.[37] Net income mirrored these swings, with profits of $441 million in 2022 contrasting losses or minimal gains in earlier downturns, such as the post-2014 oil price crash that strained operations in the mid-2010s. Revenue followed suit, peaking at $10.8 billion in 2022 before contracting to $8.3 billion in 2023 and $7.5 billion in 2024, attributable to normalizing margins (from $14.9 per barrel in 2023 to $10.2 in 2024), deferred maintenance, and impacts from the Israel-Hamas war. Operating profit declined from $594 million in 2022 to $224 million in 2024, reflecting higher costs and lower throughput.[30][37] Debt metrics improved over time through refinancing, asset sales, and profitability cycles. Net financial debt fell from $617 million in 2022 to $452 million in 2024, with leverage (net debt to EBITDA) reducing from highs above 7x in 2013 to around 2-3x by the late 2010s, aided by financial restructuring and operational efficiencies. Equity remained stable, supporting dividend payouts during profitable years despite persistent capital-intensive maintenance needs.[30][38]| Year | Adjusted EBITDA ($M) | Refining Margin ($/barrel) | Net Income ($M) |
|---|---|---|---|
| 2016 | 427 | 7.1 | - |
| 2017 | 552 | 8.8 | - |
| 2018 | 507 | 8.0 | - |
| 2019 | 416 | 6.8 | - |
| 2020 | 121 | 3.4 | - |
| 2021 | 511 | - | - |
| 2022 | 776 | - | 441 |
| 2023 | 727 | 14.9 | 408 |
| 2024 | 396 | 10.2 | 113 |
Recent Results (2020s)
BAZAN Group's financial performance in the 2020s fluctuated significantly due to global oil market volatility, geopolitical events, and operational factors. In 2020, adjusted EBITDA stood at $121 million, reflecting reduced demand from the COVID-19 pandemic that curtailed refining volumes and sales.[37] Recovery followed in 2021 with adjusted EBITDA rising to $511 million amid rebounding energy prices.[37] The period peaked in 2022, driven by elevated refining margins following Russia's invasion of Ukraine, which disrupted global supplies and boosted crack spreads; adjusted EBITDA reached $776 million, while net profit was $441 million on revenues approximating $10.4 billion.[37][30] Performance moderated in 2023, with adjusted EBITDA at $727 million and net profit at $408 million, as margins normalized despite ongoing regional tensions from the Israel-Hamas war that increased logistics costs and delayed maintenance.[37][30] In 2024, results weakened further to adjusted EBITDA of $396 million and net profit of $113 million on revenues of $7.542 billion, impacted by a major periodic maintenance shutdown (costing $95 million plus $55 million in lost profits), lower global refining margins, and export disruptions including a temporary suspension of trade with Turkey.[37][30][39] The board approved a $50 million dividend, representing 75% of the year's profit.[39]| Year | Revenue ($M USD) | Adjusted EBITDA ($M USD) | Net Profit ($M USD) |
|---|---|---|---|
| 2020 | Not specified | 121 | Not specified |
| 2021 | Not specified | 511 | Not specified |
| 2022 | ~10,400 | 776 | 441 |
| 2023 | ~8,000 | 727 | 408 |
| 2024 | 7,542 | 396 | 113 |
Innovations and Strategic Initiatives
Research and Development Focus Areas
The BAZAN Group's research and development efforts, coordinated through its centralized R&D unit and innovation arm Bnnovation (established in 2019), emphasize advancements in refining and petrochemical processes, with a strategic pivot toward sustainability and low-carbon technologies.[23][40] Key priorities include optimizing production efficiency via linear planning systems—computerized models for crude oil and product mix allocation—and synergy projects integrating materials across facilities to reduce energy intensity, which improved from an index of 112 in 2008 to 98 by 2018.[41][23] A primary focus area is green polymers and circular economy solutions, particularly at subsidiary Carmel Olefins, where the R&D team of 15 researchers develops customized polypropylene and polyethylene variants for industries like automotive and agriculture, alongside low-carbon footprint products incorporating domestic waste powders.[41][30] This includes 11 patents for unique polymer compositions as of 2024, supporting targets of 15% green polymer sales by 2025 and 30% by 2030, backed by planned investments of USD 170–240 million through 2030.[30] Initiatives encompass chemical and mechanical recycling, such as the 2022 acquisition of VPM Plast (76% stake, capacity 12,000 tons/year) and Carmel Eco (full acquisition by September 2024, 10,000 tons/year), plus consortia like CIRCLE (concluded 2022) for recycled composites and SMART (concluded 2023) for antimicrobial agro-materials.[23][30] Hydrogen and alternative fuels represent another core domain, with up to USD 50 million allocated by 2030 for commercial production and infrastructure, positioning BAZAN as a leader in Israel's hydrogen ecosystem.[41][23] Projects include collaborations with H2Pro for green hydrogen electrolysis, development of compression systems (supported by Ministry of Energy grants), and operational milestones like Israel's first hydrogen fueling station at Yagur Junction (with Sonol, under construction as of 2022), a hydrogen-powered truck purchase, and bus orders.[41][30] The Hydrogen Valley initiative with Nesher municipality, Technion, and Israel Railways further integrates hydrogen into transport and industry.[30] Refining innovations target clean fuels and emissions reduction, leveraging the hydrocracker facility (operational since 2013) to boost diesel and kerosene yields while adapting to standards like IMO 2020 for low-sulfur fuels.[23] Efforts incorporate Industry 4.0 tools for predictive maintenance and digitization to lower the carbon footprint, alongside USD 680 million invested from 2007 to 2024 in environmental technologies such as advanced burners and odor treatment.[30] Bnnovation facilitates open innovation through the Environmental Sustainability Innovation Lab (ESIL, launched 2020 with EDF Renewables and Johnson Matthey), investing in 14 ventures by 2024 and partnering with the Israel Innovation Authority on startups in clean energy and sustainable plastics.[41][30][40]Partnerships and New Ventures
In 2019, BAZAN Group established Bnnovation, an internal innovation platform dedicated to fostering startups and technologies in clean energy, sustainable plastics, and related fields through direct investments, collaborations, and ecosystem development.[42] Through Bnnovation, BAZAN has pursued targeted investments, including a $2 million stake in Feelit Technologies in December 2022 to advance vibration-sensing technology for efficient and sustainable manufacturing processes.[43] In August 2023, BAZAN invested in APERIO Systems' Series A-II round to support optical inspection innovations applicable to industrial operations.[44] More recently, in October 2025, BAZAN and Bnnovation committed funds to Gain, a deep-tech firm developing AI-driven procurement solutions to optimize supply chain efficiency.[45] A pivotal new venture occurred in August 2025 when BAZAN acquired a 52% stake in U.S.-based Cantium for $100 million, marking the company's entry into upstream oil production in the Gulf of Mexico and diversifying beyond refining and petrochemicals.[46] This strategic investment aims to secure raw material supplies and integrate production with BAZAN's downstream capabilities, with Cantium operating mature offshore fields producing approximately 20,000 barrels per day.[46] On the partnership front, BAZAN signed a memorandum of understanding (MOU) with UAE-based Mazrui International in November 2020 to facilitate polymer imports to Israel, enhancing supply chain resilience amid regional normalization efforts. In April 2023, BAZAN collaborated with Continental AG to explore sustainable mobility solutions, focusing on advanced materials and low-carbon technologies aligned with both firms' decarbonization goals.[47] Additionally, BAZAN's 2023 ESG initiatives included joint ventures with industry leaders for gray hydrogen production and delivery, supporting industrial applications while planning transitions to greener variants.[29] These efforts reflect BAZAN's broader strategy to leverage alliances for technological advancement and market expansion.[48]Environmental and Regulatory Landscape
Pollution Challenges and Health Impacts
The BAZAN Group's Haifa Bay refinery complex emits substantial quantities of air pollutants, including benzene, nitrogen oxides, sulfur dioxide, and particulate matter (PM2.5 and PM10), which have historically exceeded permitted levels and contributed to the area's ranking as Israel's highest emitter of industrial pollutants.[49][50] A 2021 Ministry of Environmental Protection study estimated the annual health costs of industrial and vehicular pollution in Haifa Bay at approximately NIS 1.3 billion (about $400 million USD at the time), primarily from respiratory and cardiovascular effects.[49] Specific incidents, such as a 2023 benzene leak during tank evacuation and multiple air pollution violations between 2010 and 2022, have prompted regulatory actions, including convictions and fines totaling over NIS 13 million ($3.6 million USD) since 2015 for exceeding emissions permits and improper waste handling.[50][51][52] Epidemiological studies have identified associations between Haifa Bay's industrial air pollution—predominantly from petrochemical sources like BAZAN—and elevated health risks, particularly cancer and respiratory conditions, though establishing direct causation remains challenging due to confounding factors such as smoking and socioeconomic variables. A 2010 spatial analysis in Science of the Total Environment correlated higher modeled air pollution concentrations (including PM and NO2) with increased cancer incidence rates across 143 Haifa Bay neighborhoods, finding statistically significant gradients where pollution hotspots aligned with elevated lung, bladder, and childhood leukemia cases.[53] Similarly, a 2015 study in British Journal of Medicine and Medical Research estimated that chronic exposure to metals and air pollutants from the refinery area contributed to 16% of Haifa's cancer cases (780 out of 4,860 over a decade), with lung cancer rates 50% above national averages in proximity zones.[54] A 2023 peer-reviewed analysis in Environmental Health examined adolescence exposure in the Haifa Bay Area and reported a 7-16% higher young-adulthood cancer incidence (including lymphomas and leukemias) among those in high-pollution sub-districts compared to lower-exposure groups, attributing risks to petrochemical emissions.[55] Respiratory health impacts are also documented, with Haifa Bay exhibiting asthma prevalence rates up to 20% higher than national figures, linked to PM2.5 and volatile organic compounds from refinery flaring and processing.[56] A 2022 government inter-ministerial report, drawing on Ministry of Health registry data, found 6-17% elevated cancer risk for individuals aged 16-20 exposed during childhood in Haifa versus national baselines, alongside increased allergies and asthma hospitalizations; the report reinforced hypotheses of industrial pollution's role but noted ongoing debates over attribution to specific emitters like BAZAN.[57][58] State Comptroller audits have highlighted systemic underreporting of emissions and delays in mitigation, with Haifa Bay's disease incidence (e.g., certain cancers and chronic respiratory issues) consistently 10-50% above national medians per Ministry of Health surveillance from 2010-2023.[58] While BAZAN has contested direct liability, claiming reductions in benzene emissions (e.g., 66% drop from 2018 to 2022 baselines), independent monitoring confirms persistent exceedances during malfunctions, such as the August 2021 refinery outage releasing uncontrolled pollutants.[59][60]Mitigation Investments and Sustainability Measures
BAZAN Group has invested over USD 545 million from 2009 to 2022 in enhancing operational efficiency and environmental performance, including emission reduction technologies.[29] These efforts encompass the installation of flue gas recirculation systems to lower nitrogen oxide emissions and expansions in wastewater treatment capacity using membrane bioreactor technology, with NIS 2.5 million allocated in 2023 alone.[59][29] A flocculation facility at subsidiary Gadiv, completed in 2023, processes benzoic acid waste to minimize emissions and treatment costs.[29] Air pollution mitigation includes significant reductions in key pollutants: benzene emissions dropped 91% from 2016 to 2023, reaching levels below 0.35 tons annually by 2023, while non-methane volatile organic compounds decreased 68% over the same period.[29] Sulfur oxide emissions fell 37% and nitrogen oxides 33% between 2016 and 2022.[59] These measures positioned BAZAN in the top 10th percentile of refineries for lowest environmental impact, as benchmarked against European standards, ahead of the 2024 target.[29][59] Water management initiatives feature an industrial effluent reclamation facility operational since 2017, reclaiming 60% of effluents and saving 2.5 million cubic meters of potable water annually.[59] Overall water consumption declined 12% from 2016 to 2023, with total suspended particulate matter in discharges reduced to 19,701 kg in 2023 from 23,609 kg the prior year.[29] Hazardous waste generation decreased 52% over 2016-2023, supporting circular economy goals like zero landfilling of isododecane waste by 2023.[29] Sustainability measures extend to greenhouse gas reductions, with Scope 1 and 2 emissions targeted for a 19% cut by 2030 relative to 2015 levels in Israeli operations.[29] A 10-year agreement for 50 MW of green electricity, commencing in 2025, is projected to avoid 140,000 tons of CO2 emissions by 2026.[59] BAZAN launched Israel's first hydrogen fueling station in 2023 and initiated green diesel production from used cooking oil in 2024, alongside USD 50 million planned investments in hydrogen solutions by 2030.[29] Polymer sustainability targets include 30% green, recycled, or biobased products by 2030, bolstered by acquisitions like VPM for 12,000 tons annual recycling capacity.[59][29]Controversies
Environmental Litigation and Fines
In 2015, the Israeli Ministry of Environmental Protection indicted three BAZAN facilities, including the crude oil refinery, for environmental violations such as accumulating approximately 28,000 tons of hazardous waste sludge and failing to properly manage emissions.[61] Subsequent convictions and fines followed, with BAZAN facing four separate cases by 2022 for air pollution and permit breaches, resulting in court-imposed penalties totaling NIS 7.3 million alongside NIS 3.6 million in administrative sanctions from the ministry.[62] By September 2022, BAZAN and its subsidiaries had been indicted five times in seven years for pollution offenses, with the latest charges alleging 15 air pollution incidents across 10 facilities from 2017 to 2021, including exceedances of permitted emission levels for substances like nitrogen oxides and volatile organic compounds.[63] The October 2022 indictment extended to senior executives for oversight failures in these events, which BAZAN contested as lacking intent.[62] In October 2021, the Ministry imposed a NIS 895,420 fine on BAZAN for violating hazardous substance permit conditions at its Haifa port operations, involving improper handling that risked soil and water contamination.[64] Gadiv Petrochemical Industries Ltd., a BAZAN affiliate, received a NIS 634,300 penalty in November 2020 for similar emissions exceedances in Haifa Bay.[65] The Haifa Magistrate's Court convicted BAZAN, Carmel Olefins Ltd., and Gadiv in May 2024 for severe air pollution and emissions permit violations, fining BAZAN NIS 2 million, Carmel Olefins NIS 1,018,500, and Gadiv NIS 732,500, with BAZAN additionally committing to NIS 1 million in remediation funding.[52][66] These cases primarily involve regulatory enforcement under Israel's Clean Air Law, focusing on operational lapses in monitoring and control systems rather than deliberate misconduct, though repeated violations have prompted stricter oversight.[63]| Date | Entity | Violation Type | Fine Amount (NIS) | Source |
|---|---|---|---|---|
| July 2015 | BAZAN facilities | Hazardous waste accumulation, emissions failures | Not specified in indictment (subsequent fines applied) | [61] |
| November 2020 | Gadiv Petrochemical | Emissions exceedances | 634,300 | [65] |
| October 2021 | BAZAN (Haifa port) | Hazardous substance permit breaches | 895,420 | [64] |
| May 2024 | BAZAN, Carmel Olefins, Gadiv | Air pollution, emissions violations | 2,000,000 (BAZAN); 1,018,500 (Carmel); 732,500 (Gadiv) | [52][66] |