(243b) Low-Carbon Methanol Production Routes Via Hydrogen Electrolysis: Techno-Economic and Life Cycle Analyses

The most common process for methanol (MeOH) production is currently steam methane reforming (SMR) using natural gas (NG), a fossil fuel, as the feedstock. Even with carbon capture and sequestration (CCS) of the tail gas CO2 from natural gas SMR MeOH plants, the cradle-to-gate carbon intensity (CI) of this methanol is still approximately 1 kg CO2e / kg MeOH. Several lower-carbon alternatives have been proposed which do not use NG as the feedstock and instead combine captured CO2 and renewably produced H2. These alternatives are more expensive to produce than conventional SMR methanol, mainly due to the high production costs of renewable H2. One alternative MeOH production route is the CO2 hydrogenation process, which currently has plants producing MeOH at up to 110,000 t/y [1]. This route generally utilizes CO2 from CCS of stack gasses from existing industrial plants, such as natural gas combined cycle (NGCC) power plants. A combined techno-economic analysis (TEA) and life cycle analysis (LCA) of these two processes (natural gas SMR and CO2 hydrogenation) was conducted to determine the conditions necessary for the methanol produced from CO2 hydrogenation to become economically competitive with conventional SMR-produced methanol. The TEA/LCA utilized several renewable technology assessment tools developed at the National Renewable Energy Laboratory (NREL), particularly:

• Hybrid Optimization and Performance Platform (HOPP) – used to design optimal hybrid wind/solar/electrolysis plants to minimize the cost of green hydrogen
• The Annual Technology Baseline (ATB) – an annually-updated set of projections of capital costs of different electricity production technologies
• H2A Hydrogen Production Analysis models
• Cambium – a model of marginal grid electricity costs/emissions for several scenarios, including:
  • “Mid-case”: Central estimates for technology costs, fuel prices, and demand growth
  • “High Natural Gas Prices”: the same set of base assumptions as the first scenario, but where natural gas prices are drawn from the AEO2022 Low Oil and Gas supply scenario.

The result of this TEA/LCA, shown in Figure 1 below, found that the CO2 hydrogenation route would reduce methanol CI by approximately half, but increase production costs by more than 150% in the “mid-case” scenario for plants coming online between 2030 and 2050. To be economically competitive with SMR-produced methanol would require a CO2 emissions price of more than $500/t CO2e. This is well above the Biden administration’s value for the social cost of carbon of $51/t CO2, as well as the EPA’s recent proposal of $190/t CO2. For CO2 hydrogenation-based MeOH to be economically competitive by 2050, with a more reasonable CO2 emissions price would require both the “High National Gas Prices” scenario as well as higher-than-expected technology development for green hydrogen, enough to bring green H2 production costs down to $1/kg H2 by 2050.

Another MeOH production route, currently under development by NREL, would instead utilize direct reactive capture and conversion (RCC) of CO2 from flue gas in a series of pressure swing reactors (PSRs) utilizing dual functional materials (DFM) catalysts. This process is being developed at the NREL lab scale and is being modeled in ASPEN at the same scale as the CO2 hydrogenation process. A comparative TEA/LCA of this RCC process will be presented at AiCHE.

Figure 1. Methanol TEA and LCA, comparing the conventional SMR and CO2 hydrogenation routes. Line color indicates the methanol production technology, and line style indicates the feedstock price/technology development scenario simulated. Top left: cost of producing methanol (both routes); top right: cost of producing renewable hydrogen for CO2 hydrogenation-based methanol, bottom left: methanol carbon intensity (both routes); bottom right: CO2 emissions price required for CO2 hydrogenation-based methanol to overcome the production cost gap with SMR-based methanol.

[1] carbonrecycling.is/projects#projects-shunli