Cost-Effective Locations for Producing Fuels and Chemicals from Carbon Dioxide and Low-Carbon Hydrogen in the Future

Abstract

This study investigates the cost and climate change mitigation potentials of fuels and chemicals from CO2 and low-carbon hydrogen produced in four sites with favorable conditions for renewable energy generation, located in Iceland, The Netherlands, Spain, and Chile. We investigate eight different chemicals, i.e., Fischer-Tropsch fuels, methanol, methane, dimethyl ether, ammonia, urea, olefins, and aromatics, considering two temporal horizons, i.e., the near future (by 2035) and the long-term future (post-2035). For hydrogen production, we explore alkaline water electrolysis, proton exchange membranes, and solid oxide electrolyzer cells. As carbon feedstock, we focus on CO2 produced via low-temperature solid adsorption direct air capture (LT DAC). Additionally, we investigate CO2 from high-temperature aqueous absorption DAC and point-source capture. We find that optimal renewable energy sites like the ones considered in this study have the potential to offer competitive costs for carbon capture and utilization (CCU) processes. These routes, when compared to the current price of their fossil-based counterparts, could achieve long-term future cost ratios ranging from 1 to 6.5 times, with a cost per ton of CO2eq avoided estimated between 150 and 750 €/t. In conclusion, this research provides valuable insights into the techno-economic feasibility of relying on fuels and chemicals via CCU processes as an energy policy strategy.