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The iconic cooling towers of the Haifa oil refinery (before the collapse of one)

Key Information

BAZAN Group (BAZAN, Hebrew: בז"ן – בתי זיקוק לנפט בע"מ), formerly Oil Refineries Ltd. (ORL), is an oil refining and petrochemicals company located in Haifa Bay, Israel. It operates the largest oil refinery in the country. ORL has a total oil refining capacity of approximately 9.8 million tons of crude oil per year with a Nelson complexity index of 9.[3] ORL provides a variety of products used in industrial operations, agriculture and transportation.[4] ORL is Israel's largest integrated refining and petrochemical facility.[5] The company also provides storage and transportation services for oil fuel products, as well as electricity and steam to industrial customers in the region.[6]

The company is traded in the Tel Aviv Stock Exchange under the symbol ORL. Until 2020, it was a component of the Tel Aviv 35 Index.[7]

History

[edit]

The company's beginnings date back to the British Mandate for Palestine when Consolidated Refineries Limited (CRL), a joint venture of Shell and the Anglo-Iranian Oil Company (now BP),[8] started constructing a sprawling refinery complex which sat at the end of the British-built Mosul–Haifa oil pipeline which stretched from the oil fields near Kirkuk in then British-controlled Iraq.[9]

Construction of the first refinery unit started in 1938 and was carried out by the M. W. Kellogg Co. with assistance from Solel Boneh, with an annual capacity of two million tons of crude oil. Construction was completed in 1944, increasing the annual yield to four million tons of crude oil.[10]

During World War II, the complex supplied refined products to British and American forces operating in the Mediterranean and Middle East theatre, and was bombed many times during the early stage of the war,[11] by Italy.[12] Damage to the refineries was quickly repaired.[13][14]

On December 30, 1947, a group from the Irgun hurled two bombs from a passing car into a crowd of Arab workers, killing 6 and injuring 42. In response, Arab workers rioted, beating 39 Jewish workers to death and wounding 49. The two events became known as the Haifa Oil Refinery massacre.[15]

Due to concerns about the Arab League Boycott, the British Government sold CRL to the State of Israel in 1958 which then changed its name to Oil Refineries Ltd.[16][17][18]

Since then the complex has undergone significant expansion and upgrades. In the past, ORL also owned the Ashdod Oil Refinery in southern Israel and therefore as a company, it held a monopoly over oil refining in the country. This changed in 2006, when Israel's Government Companies Authority, headed by Eyal Gabbai started privatization processes.[19]

On August 1, 2006, the Ashdod facilities were sold to the Paz Oil Company for 3.5 billion ILS.[20] In February 2007, 44% of the shares were sold to institutional investors.[21] Following this, 46% were sold to the Ofer-Federman group at 3.30 ILS per share,[22] with the remaining shares sold in an IPO on the Tel Aviv Stock Exchange in 2007.[20][23] There were more than 5,500 requests to buy shares, an unprecedented number.[24]

The collapse of the eastern Bazan cooling tower, June 12, 2020
Haifa oil refinery after the collapse of the eastern cooling tower

The company's iconic and historic cooling towers were removed from service in 2008. One of the towers was converted into a visitor's center, which is open to the public for free, and include multi-sensory tours.[25] On June 12, 2020, the eastern cooling tower unexpectedly collapsed.[26][27]

In 2009 the Bazan Group and Olefins companies merged and in 2010 Haifa Basic Oils was fully purchased by Bazan.[28] In 2012 Bazan commissioned UOP's Unicracking strategies in its plants for production of liquid petroleum gas, naphtha, and kerosene.[29]

The facility was struck by two Iranian missile on 16 June 2025, during the Iran-Israel War. The attack caused a complete shutdown of the facility and resulted in the death of three employees. Bazan Company also reported heavy damage to the refinery's facilities and announced its temporary closure in a statement. The statement stated that the fire had not been extinguished until the day after the attack.[30]

More than 70% of ORL's products are distributed locally (for private and public purposes) and the rest is exported.[31] The company is a direct employer of 1,500 workers and an additional 2,000 contractors; the majority of employees are residents of Haifa and the northern region of Israel.[32]

Subsidiaries

[edit]
A 2019 photo of engineers at the BAZAN Group facility in Haifa

Carmel Olefins is Israel's sole manufacturer of petrochemical products that are used as raw materials for the plastics industry. Carmel manufactures standard and special grades of polypropylene (PP) as well as a broad range of low density polyethylene (LDPE) grades.[33]

Gadiv Petrochemicals, opened in 1974, manufactures and supplies a range of petrochemicals products including aromatic hydrocarbons, aliphatic solvents and intermediates for pharmaceutical, plastic, food and chemical industries.[34][35]

Haifa Basic Oils produces base oils and paraffin wax, exporting nearly 50% of its products to overseas companies.[28][36]

Partnerships and innovation

[edit]

In 2018 Bazan launched BNNovation, an innovation initiative to grow small and larger companies in the fields of energy, renewable energy, and industry.[37][38] In 2019, BNNovation was among the founders of ESIL Technologies, an international team operating a lab for cleantech innovation and environmental protection.[39][40] Also in 2019, Bazan won the tender to establish an environmental innovation lab in Haifa Bay together with the Israeli branch of EDF Renewables and Johnson Matthey.[41]

Partners include Haier Group Corporation[42][43] and Leumi Partners.[44]

On November 16, 2020, Bazan signed a MOU with the Emirati energy company Mazrui International to import polymers that are not made in Israel.[45] In November 2021, UBQ Materials signed with Bazan to provide climate-friendly thermoplastics for resin products.[46]

The burning torch of the oil refineries at Haifa, as seen from Givat Nesher

Environmental impact

[edit]

BAZAN Group's vast petrochemical plants have released significant amounts of pollution to the environment around Haifa Bay. The company has set goals to reduce air pollution,[47] including investing over a billion dollars to develop environmentally-friendly systems.[48]

Starting in March 2011, after being connected to the new national natural gas distribution grid, the plants switched to using natural gas[49] (rather than mostly fuel oil) as their main power source, thus greatly reducing the amount of air pollution emanating from the complex.[50] In 2012, the company also completed a hydrocracking unit.[51] The switch to natural gas was expected to save the company US$200 million per year in fuel and other costs.[52]

In 2014 ORL acquired systems for treating hazards related to smells and treating emissions of volatile organic materials.[53]

In 2020, ORL published its first report for Corporate Responsibility since 2011, including its achievements in reducing benzene emissions and facilitating healthier environmental conditions.[54]

In December 2020 BAZAN announced a $3.7 million project to create, compress and transport hydrogen with the ultimate goal of bringing hydrogen-fueled cars to Israel.[55]

In April 2021, a government CEO committee assigned to resolve Haifa's decline, suggested a full closure of Bazan group's facilities within 10 years, is required.[56]

In July 2021, Bazan presented plans to become the leading Israeli supplier of renewable energy and alternative fuels at a conference in Tel Aviv. The company announced it would make $1.5 billion in capital investments by 2030, and laid out a three-pronged strategy built in accordance with international ESG standards. The company announced a set objective of 15% green polymers by 2025 and 30% by 2030.[57][58]

See also

[edit]

References

[edit]
[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

BAZAN Group

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from Grokipedia
BAZAN Group, operating through Oil Refineries Ltd., is Israel's preeminent integrated energy conglomerate specializing in and production, situated in the industrial zone. With a daily crude processing capacity of 197,000 barrels, it generates fuels, , , and aromatics, fulfilling over 70% of the nation's domestic requirements while exporting the balance primarily to markets. The group encompasses subsidiaries Carmel Olefins Ltd. and Gadiv Industries Ltd., enabling synergistic operations that position BAZAN as a cornerstone of Israeli industry and a high-complexity facility ranked 9 on the . Despite its economic significance and adherence to Euro V emission standards, BAZAN has encountered environmental challenges, including criminal charges for violations and structural failures such as a cooling tower collapse. In June 2025, the 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.

History

Founding and Pre-State Operations (1930s–1948)

The Haifa , precursor to the BAZAN Group, was established under the British Mandate for Palestine by Consolidated Refineries Limited (CRL), a between Royal Dutch Shell and the Anglo-Iranian Oil Company (now ), to process crude oil arriving via the newly operational Kirkuk- from . Construction of the initial refining units commenced in 1938 near the pipeline terminal in , undertaken primarily by the American engineering firm M.W. Kellogg Company, with construction support provided by , the Jewish Agency-affiliated labor federation's building cooperative. The first unit entered operation in November 1939, enabling initial refining of Iraqi crude into , , and other products, though full complex completion extended into the early 1940s amid disruptions. Operations during the relied on a mix of pipeline-supplied oil from —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. By mid-1943, the facility employed approximately 1,000 workers, positioning it as one of '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. The refinery's output supported military demands during the war, including , 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. 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.

Post-Independence Nationalization and Expansion (1948–1980s)

Following Israel's in May 1948, the refinery, previously operated by Consolidated Refineries Ltd. (CRL) under British ownership, had ceased full operations on April 12, 1948, amid regional hostilities and strikes. 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 , to circumvent the Arab oil boycott. This arrangement processed about 25% of pre-1948 throughput by 1949, supporting Israel's nascent energy needs despite supply constraints. Pressures from the boycott on firms trading with prompted the British government to divest from CRL, culminating in the sale of the Haifa refinery to the State of in 1958, with formal agreement in 1959. Renamed Oil Refineries Ltd. (ORL) in 1959 and later confirmed in 1972, the facility transitioned to full , rejecting earlier parliamentary motions for outright without compensation, such as a 1950s Communist proposal targeting partial Shell ownership. Under government control, ORL invested in upgrades to modernize obsolete , expanding refining capacity to 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 and boosting throughput to near-full capacity by August 2, 1968. 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 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 hub amid global oil shocks.

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. These measures, implemented amid broader fiscal stabilization efforts since 1990, exposed ORL to competitive pressures and set the stage for by diminishing its import barriers, such as exclusive access to Haifa's refining port. By the early 2000s, the government restructured ORL by splitting it into separate and entities to promote rivalry and enhance sale value, repurchasing shares from private holders like between 2002 and 2005 for approximately $120 million to facilitate . In September 2006, the refinery was privatized and sold to Paz Oil for $676 million, marking the first major in the sector. The operations, rebranded as BAZAN Group (formerly ORL), followed in February 2007 with Israel's largest-ever , generating $1.57 billion as the state fully exited ownership; control passed to a consortium including (initially around 33.5%) and other investors, with shares listed on the under the symbol "BAZAN." Post-privatization restructuring focused on and operational consolidation. In , BAZAN merged with Carmel Olefins Ltd. to streamline production, followed in 2010 by full acquisition of Haifa Basic Oils Ltd., consolidating refining inputs and reducing external dependencies. These moves enhanced supply chain efficiency amid competitive duopoly with Paz Oil, though they drew scrutiny for potential environmental trade-offs in . Ownership evolved further, with Israel Enterprises Ltd. acquiring a controlling stake from for NIS 550 million in a complex transaction, positioning it as the primary shareholder alongside public holdings of about 51.5%. Ongoing modernization includes facility upgrades for compliance and capacity, such as advanced refining technologies commissioned around , adapting to global shifts toward lower-emission operations.

Corporate Structure and Operations

Core Refining and Petrochemical Facilities

The BAZAN Group's core facilities form an integrated and complex in , , processing crude oil into fuels and chemical feedstocks. The refinery handles multiple crude types through units for , vacuum processing, and catalytic cracking at temperatures up to 900°C and pressures of 180 atmospheres. Refining capacity reaches a maximum of 197,000 barrels per day, equivalent to 9.8 million tons annually, with typical utilization around 90%. This yields outputs including , diesel, , , and , alongside and other intermediates supplied to on-site operations. Petrochemical production leverages refinery byproducts and , with subsidiaries such as GADIV Petrochemical Industries Ltd. generating over 500,000 tons yearly of aromatics like and , aliphatic solvents, and intermediates for plastics, paints, and pharmaceuticals. Carmel Olefins Ltd. adds capabilities, producing approximately 450,000 tons of and 170,000 tons of per year. Overall aromatics output approximates 580,000 tons annually, supporting downstream applications in textiles, automotive components, and chemicals. The complex's design enables synergistic feedstock flows, enhancing efficiency and product diversity.

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 to enable efficient feedstock utilization and product synergy. These entities process refinery outputs into higher-value chemicals and polymers, contributing to the group's in the energy and materials sectors. Carmel Olefins Ltd., 100% owned by BAZAN, operates facilities for producing olefin-based polymers, including and , with applications in plastics for , automotive parts, and consumer goods. This subsidiary leverages propylene feedstock derived from the adjacent refinery processes. Gadiv Petrochemical Industries Ltd., also 100% owned, specializes in aromatic such as , paraxylene, orthoxylene, and , which are essential feedstocks for downstream industries like synthetic fibers, solvents, and resins. Its production is tightly coupled with the refinery's cracking units for optimal yield. Carmel Olefins further owns Ducor Petrochemicals B.V., a fully consolidated entity located in , , with an annual polypropylene production capacity of 180,000 metric tons, expanding BAZAN's global footprint in polymer markets. The subsidiaries function as integrated extensions of the refinery, sharing infrastructure for utilities, storage, and logistics, which enhances and reduces costs through captive supply chains. This structure supports BAZAN's position as Israel's primary integrated refining and hub, processing up to 197,000 barrels of crude oil daily to feed downstream operations.

Products and Technological Capabilities

Refined Petroleum Outputs

The BAZAN Group's refinery processes crude oil into a range of refined products, with a maximum capacity of approximately 197,000 barrels per day, equivalent to 9.8 million tons annually, operating at an utilization rate of around 90%. The refining process involves 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 of 9 out of 10 for advanced processing capabilities. Key outputs include (LPG), primarily used for cooking, heating, and vehicle fuel, separated at boiling points around 20°C. , distilled at approximately 50°C, serves as a feedstock for , polymers, paints, and chemicals. (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. Kerosene, refined at around 170°C for use as jet fuel in aviation, meets international aviation standards. 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. Heavier fractions yield fuel oil at 500°C for shipping and industrial heating, and bitumen for road paving, roofing, and marine fuels. These products supply domestic markets in for transport, industry, agriculture, and households, with portions exported to regional Mediterranean countries and beyond. Production volumes vary with crude slate and demand, but the refinery's integration with downstream petrochemical units enhances yield efficiency for lighter fuels like and diesel.

Petrochemical and Polymer Productions

The operations of the BAZAN Group are integrated with its refining activities in , 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 and 160,000 metric tons of , serving as feedstocks for manufacturing. These olefins represent core outputs, with and used both internally and externally as building blocks for plastics and chemicals. Gadiv focuses on aromatics production, manufacturing , , mixed , orthoxylene, paraxylene, , and solvents such as Solgad series products, with an annual output exceeding 500,000 metric tons of . 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 . and , for instance, are key raw materials in plastics and production, while xylenes support and applications. Polymer production is handled by CAOL, established in 1989 and acquired by BAZAN in 2009, making it Israel's sole producer of (PP) and (LDPE). 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 technologies for standard and specialty grades under trademarks like Ipethene® for LDPE and Capilene® for PP. PP accounts for about 66% of output, with LDPE comprising the remainder, serving approximately 350 domestic and 200 international customers in the plastics sector for , films, and molded goods. Recent initiatives include plans for renewable feedstock integration to produce bio-based olefins and polyolefins, aiming to expand sustainable capacities.

Financial Performance

BAZAN Group's financial performance has been characterized by high volatility, primarily influenced by global price fluctuations, crack spreads, and geopolitical events affecting energy markets. From 2016 to 2024, adjusted consolidated EBITDA varied significantly, reaching a low of $121 million in amid the COVID-19-induced demand collapse and a high of $776 million in driven by surging prices following Russia's invasion of . The nine-year average adjusted EBITDA during this period was $493 million, underscoring the cyclical nature of the sector. 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. 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. Debt metrics improved over time through , asset sales, and profitability cycles. Net financial fell from $617 million in to $452 million in , with leverage (net to EBITDA) reducing from highs above 7x in 2013 to around 2-3x by the late , aided by financial and operational efficiencies. Equity remained stable, supporting payouts during profitable years despite persistent capital-intensive maintenance needs.
YearAdjusted EBITDA ($M)Refining Margin ($/barrel)Net Income ($M)
20164277.1-
20175528.8-
20185078.0-
20194166.8-
20201213.4-
2021511--
2022776-441
202372714.9408
202439610.2113

Recent Results (2020s)

BAZAN Group's financial performance in the 2020s fluctuated significantly due to global market volatility, geopolitical events, and operational factors. In 2020, adjusted EBITDA stood at $121 million, reflecting reduced demand from the that curtailed refining volumes and sales. Recovery followed in 2021 with adjusted EBITDA rising to $511 million amid rebounding energy prices. The period peaked in 2022, driven by elevated refining margins following Russia's invasion of , 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. 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. 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 shutdown (costing $95 million plus $55 million in lost profits), lower global margins, and disruptions including a temporary suspension of trade with . The board approved a $50 million , representing 75% of the year's profit.
YearRevenue ($M USD)Adjusted EBITDA ($M USD)Net Profit ($M USD)
2020Not specified121Not specified
2021Not specified511Not specified
2022~10,400776441
2023~8,000727408
20247,542396113

Innovations and Strategic Initiatives

Research and Development Focus Areas

The BAZAN Group's efforts, coordinated through its centralized R&D unit and innovation arm Bnnovation (established in 2019), emphasize advancements in and processes, with a strategic pivot toward and low-carbon technologies. 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 , which improved from an index of 112 in 2008 to 98 by 2018. A primary focus area is polymers and solutions, particularly at subsidiary Carmel Olefins, where the R&D team of 15 researchers develops customized and variants for industries like automotive and , alongside low-carbon footprint products incorporating domestic waste powders. This includes 11 patents for unique compositions as of 2024, supporting targets of 15% sales by 2025 and 30% by 2030, backed by planned investments of USD 170–240 million through 2030. Initiatives encompass chemical and mechanical , 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 agro-materials. 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 ecosystem. Projects include collaborations with H2Pro for , development of compression systems (supported by grants), and operational milestones like Israel's first fueling station at Junction (with Sonol, under construction as of 2022), a -powered purchase, and bus orders. The Valley initiative with municipality, Technion, and further integrates into transport and industry. 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. Efforts incorporate Industry 4.0 tools for and to lower the , alongside USD 680 million invested from 2007 to 2024 in environmental technologies such as advanced burners and odor treatment. Bnnovation facilitates through the Environmental Sustainability Innovation Lab (ESIL, launched 2020 with and ), investing in 14 ventures by 2024 and partnering with the Innovation Authority on startups in clean energy and sustainable plastics.

Partnerships and New Ventures

In 2019, BAZAN Group established Bnnovation, an internal platform dedicated to fostering startups and technologies in clean energy, sustainable plastics, and related fields through direct investments, collaborations, and ecosystem development. Through Bnnovation, BAZAN has pursued targeted investments, including a $2 million stake in Feelit Technologies in December 2022 to advance vibration-sensing for efficient and sustainable processes. In August 2023, BAZAN invested in APERIO Systems' Series A-II round to support optical inspection innovations applicable to industrial operations. More recently, in October 2025, BAZAN and Bnnovation committed funds to Gain, a deep-tech firm developing AI-driven solutions to optimize efficiency. 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 and diversifying beyond refining and petrochemicals. This strategic investment aims to secure supplies and integrate production with BAZAN's downstream capabilities, with Cantium operating mature offshore fields producing approximately 20,000 barrels per day. On the partnership front, BAZAN signed a (MOU) with UAE-based Mazrui International in November 2020 to facilitate polymer imports to , enhancing amid regional normalization efforts. In April 2023, BAZAN collaborated with to explore sustainable mobility solutions, focusing on advanced materials and low-carbon technologies aligned with both firms' decarbonization goals. Additionally, BAZAN's 2023 ESG initiatives included joint ventures with industry leaders for gray and delivery, supporting industrial applications while planning transitions to greener variants. These efforts reflect BAZAN's broader strategy to leverage alliances for technological advancement and market expansion.

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. 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. 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. Epidemiological studies have identified associations between 's industrial —predominantly from sources like BAZAN—and elevated health risks, particularly cancer and respiratory conditions, though establishing direct causation remains challenging due to factors such as and socioeconomic variables. A 2010 spatial analysis in Science of the Total Environment correlated higher modeled concentrations (including PM and NO2) with increased cancer incidence rates across 143 neighborhoods, finding statistically significant gradients where pollution hotspots aligned with elevated lung, bladder, and cases. Similarly, a 2015 study in British Journal of Medicine and Medical Research estimated that chronic exposure to metals and from the area contributed to 16% of Haifa's cancer cases (780 out of 4,860 over a decade), with rates 50% above national averages in proximity zones. A 2023 peer-reviewed analysis in examined adolescence exposure in the 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 emissions. Respiratory health impacts are also documented, with exhibiting asthma prevalence rates up to 20% higher than national figures, linked to PM2.5 and volatile organic compounds from refinery flaring and processing. A government inter-ministerial report, drawing on registry data, found 6-17% elevated cancer risk for individuals aged 16-20 exposed during childhood in 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. State Comptroller audits have highlighted systemic underreporting of emissions and delays in mitigation, with 's disease incidence (e.g., certain cancers and chronic respiratory issues) consistently 10-50% above national medians per surveillance from 2010-2023. While BAZAN has contested direct liability, claiming reductions in benzene emissions (e.g., 66% drop from 2018 to baselines), independent monitoring confirms persistent exceedances during malfunctions, such as the August 2021 refinery outage releasing uncontrolled pollutants.

Mitigation Investments and Sustainability Measures

BAZAN Group has invested over USD 545 million from 2009 to 2022 in enhancing and environmental performance, including emission reduction technologies. These efforts encompass the installation of recirculation systems to lower emissions and expansions in capacity using technology, with NIS 2.5 million allocated in 2023 alone. A flocculation facility at subsidiary Gadiv, completed in 2023, processes waste to minimize emissions and treatment costs. Air pollution mitigation includes significant reductions in key pollutants: 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. emissions fell 37% and oxides 33% between 2016 and 2022. These measures positioned BAZAN in the top 10th of refineries for lowest environmental impact, as benchmarked against European standards, ahead of the 2024 target. Water management initiatives feature an industrial effluent reclamation facility operational since 2017, reclaiming 60% of effluents and saving 2.5 million cubic meters of annually. 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. generation decreased 52% over 2016-2023, supporting goals like zero landfilling of isododecane waste by 2023. 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. 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. BAZAN launched Israel's first fueling station in 2023 and initiated green diesel production from used in 2024, alongside USD 50 million planned investments in solutions by 2030. sustainability targets include 30% green, recycled, or biobased products by 2030, bolstered by acquisitions like VPM for 12,000 tons annual capacity.

Controversies

Environmental Litigation and Fines

In 2015, the Israeli Ministry of indicted three BAZAN facilities, including the crude , for environmental violations such as accumulating approximately 28,000 tons of sludge and failing to properly manage emissions. Subsequent convictions and fines followed, with BAZAN facing four separate cases by 2022 for and permit breaches, resulting in court-imposed penalties totaling NIS 7.3 million alongside NIS 3.6 million in administrative sanctions from the ministry. By September 2022, BAZAN and its subsidiaries had been indicted five times in seven years for offenses, with the latest charges alleging 15 incidents across 10 facilities from 2017 to 2021, including exceedances of permitted emission levels for substances like nitrogen oxides and volatile organic compounds. The October 2022 indictment extended to senior executives for oversight failures in these events, which BAZAN contested as lacking intent. 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 and . Gadiv Industries Ltd., a BAZAN affiliate, received a NIS 634,300 penalty in 2020 for similar emissions exceedances in . The Haifa Magistrate's Court convicted BAZAN, Carmel Olefins Ltd., and Gadiv in May 2024 for severe 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. These cases primarily involve regulatory 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.
DateEntityViolation TypeFine Amount (NIS)Source
July 2015BAZAN facilitiesHazardous waste accumulation, emissions failuresNot specified in indictment (subsequent fines applied)
2020Gadiv PetrochemicalEmissions exceedances634,300
October 2021BAZAN ( port)Hazardous substance permit breaches895,420
May 2024BAZAN, Carmel Olefins, GadivAir pollution, emissions violations2,000,000 (BAZAN); 1,018,500 (Carmel); 732,500 (Gadiv)

Geopolitical Risks and Security Incidents

The location of BAZAN Group's primary refining complex places it in a high-risk zone for geopolitical threats stemming from Israel's conflicts with in and Iran-backed proxies, given its proximity to the northern border and status as a strategic asset. has repeatedly targeted with rocket and missile barrages, viewing industrial sites like the refinery as legitimate military objectives due to their economic and logistical importance to . These risks have led to operational disruptions, heightened security measures, and elevated war risk insurance premiums for Israeli amid escalating regional tensions. During the 2006 Second Lebanon War, Hezbollah fired rockets into that landed near the oil refinery and adjacent gas storage tanks, killing eight civilians at a nearby train station and underscoring the vulnerability of the site to indirect hits from unguided munitions. No direct structural damage to the refinery was reported, but the attacks highlighted the potential for cascading effects, such as fires or explosions in hydrocarbon facilities. In October 2024, amid heightened cross-border exchanges, Hezbollah launched multiple rocket salvos at , with informed sources indicating strikes on or near the BAZAN refinery complex as part of broader assaults on the port city. These incidents caused no confirmed refinery damage but prompted temporary alerts and evacuations, reflecting ongoing exposure to short-range threats despite Israeli air defenses. Cybersecurity incidents have compounded physical risks, with pro-Iranian actors claiming responsibility for a distributed denial-of-service (DDoS) attack that rendered BAZAN's inaccessible for days in 2023, attributed to groups like Cyber Avengers and Anonymous Sudan in retaliation for Israeli actions. The attack did not disrupt core operations but exposed digital vulnerabilities in amid Iran's shadow war with . The most severe recent incident occurred on June 15, 2025, when Iranian ballistic missiles struck the BAZAN complex during a direct barrage, damaging pipelines, transmission lines, and a essential for steam and , resulting in the full shutdown of facilities and the deaths of three employees. The 197,000 barrels per day facility sustained significant but repairable harm, with partial reopening by late June after assessments confirmed no total operational collapse, though the event tested Israel's energy resilience and fueled debates over relocating high-risk assets southward. This attack, part of Iran's escalation following prior proxy conflicts, amplified geopolitical premiums on Israeli chemical and refining sectors, with insurers monitoring for further Iranian reprisals.

Economic and Strategic Significance

Contributions to Israeli Energy Independence

The BAZAN Group's refinery serves as Israel's primary domestic oil processing facility, enabling the country to refine imported crude into usable fuels and thereby bolstering self-sufficiency in liquid hydrocarbons, which complement domestic production. With a capacity of approximately 197,000 barrels per day—equivalent to about 9.8 million tons of crude annually—the facility distributes roughly 70 percent of its output to the Israeli market, including diesel, , and essential for transportation, industry, and defense. This infrastructure mitigates vulnerabilities associated with importing fully refined products, providing a strategic buffer against international interruptions. In 2024, BAZAN accounted for 65 percent of Israel's transportation diesel, 59 percent of , and 52 percent of supplies, highlighting its dominance in fulfilling critical domestic requirements. The company's high-complexity operations, rated 9 on the , allow for efficient production of high-value products from diverse crude sources, supporting economic resilience. BAZAN has demonstrated its strategic importance during conflicts, maintaining uninterrupted fuel supplies to the , Ministry of Defense, and broader economy following the , 2023, escalation. By postponing non-essential maintenance and prioritizing defense needs, it ensured continuity for and civilian , as detailed in its 2023 ESG report, which affirms BAZAN's role in upholding Israel's . Even amid 2024 disruptions, including an Iranian missile impact on ancillary , the group sustained the national and , preventing shortages. These efforts underscore BAZAN's function as critical national , reducing external dependencies in volatile geopolitical conditions.

Employment and Broader Economic Role

The BAZAN Group directly employs approximately 1,400 permanent workers in , primarily at its facilities, with an additional 1,000 contract workers engaged annually to support operations such as maintenance and specialized projects. These roles span , production, , and administrative functions, with the company offering competitive wages, welfare benefits, and programs under and personal contracts. As of 2024, total headcount stood at around 1,394 employees. Indirectly, BAZAN's operations sustain an estimated 16,300 jobs nationwide through supply chains, , and downstream industries, according to a 2022 assessment; an earlier 2018 BDO study pegged the figure at 14,400. This multiplier effect arises from the group's procurement of , as well as its role in fueling transportation and sectors that rely on its refined products and outputs. Economically, BAZAN contributes roughly 0.43% to Israel's GDP, equivalent to about NIS 8 billion in overall impact as of 2022, including direct output and induced activities. It accounts for approximately 2% of national industrial production and holds a dominant 62% share of Israel's capacity, enabling self-sufficiency in fuels and supporting export revenues from like polymers and aromatics. These activities position BAZAN as a foundational element of Israel's and chemical sectors, with revenues exceeding $4 billion annually in recent years, bolstering trade balances despite volatility in global markets.

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