Replacing Gray Hydrogen with Renewable Hydrogen at the Consumption Location Using the Example of the Existing Fertilizer Plant

Andrea Dumančić (), Nela Vlahinić and Minea Skok
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Andrea Dumančić: Faculty of Economics and Business, University of Rijeka, 51000 Rijeka, Croatia
Nela Vlahinić: Faculty of Economics and Business, University of Rijeka, 51000 Rijeka, Croatia
Minea Skok: Energy Institute Hrvoje Požar, 10000 Zagreb, Croatia

Sustainability, 2024, vol. 16, issue 15, 1-33

Abstract: The production and use of hydrogen are encouraged by the European Union through Delegated Acts, especially in sectors that are difficult to decarbonize, such as the industrial and transport sectors. This study analyzes the possibility of partial decarbonization of the existing plant in the petrochemical industry, with a partial transition from natural gas to renewable hydrogen, as a precursor to the adoption of the hydrogen economy by 2050. This study was based on the example of a plant from the petrochemical industry, namely an existing fertilizer plant. Namely, in the petrochemical industry, hydrogen is produced by steam-reforming natural gas, which is needed in the process of producing ammonia, one of the basic raw materials for mineral fertilizers. By building an electrolyzer at the location of the existing fertilizer plant, it is possible to obtain renewable hydrogen, which enters the ammonia production process as a raw material. The electricity from which hydrogen is produced in the electrolyzer is provided through Power Purchase Agreement contracts concluded with electricity producers from 12 wind power plants. The results of this study show that the production of renewable hydrogen at the location of the analyzed plant is not profitable, but due to the specificity of the process of such an industry, the high consumption of natural gas, and large savings in CO 2 emissions which can be achieved by the production of renewable hydrogen, investment is needed. With a 370 MW electrolyzer, about 31,000 tons of renewable hydrogen is produced, which represents about 50% of the hydrogen needs of the analyzed plant. By producing renewable hydrogen for part of the needs of the analyzed plant, a saving of about 300,000 tons of CO 2 emissions is achieved in relation to the production of gray hydrogen, which contributes to the partial decarbonization of the analyzed plant. The authors are aware that the current market opportunities do not allow the profitability of the investment without subsidies, but with the advancement of technology and a different price ratio of electricity, natural gas, and CO 2 emissions, they believe that such investments will be profitable even without subsidies.

Keywords: gray hydrogen; petrochemical industry; fertilizer factory; renewable hydrogen; partial decarbonization (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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