Breaking and re-forming the chemical industry: Optimizing the transition from fossil-based clusters to net zero: Optimizing the transition from fossil-based clusters to net zero

Abstract

The chemical industry accounts for around 10% of global greenhouse gas emissions, making it a critical sector in the transition to net-zero emissions. Like chemical reactions that break and reform bonds, the industry itself must fundamentally restructure by replacing fossil-based feedstocks and fuels with sustainable alternatives. This transformation is particularly challenging due to high energy intensity, reliance on fossil carbon, tight integration within industrial clusters, narrow profit margins, long-lived capital assets, and global competition. Yet the sector remains indispensable, supplying materials that underpin global value chains. This dissertation develops an open-source, multi-scale optimization framework to support strategic decision-making for net-zero chemical clusters. The framework integrates three analytical levels: the plant level, capturing detailed process design and operations; the cluster level, representing shared utilities, by-product exchanges, and infrastructure; and the system level, linking clusters to the national energy system. A mixed-integer linear programming formulation enables simultaneous optimization of investment and operation at high temporal resolution, accounting for interdependencies within clusters and with external infrastructure. Long-term brownfield investment decisions are modeled through a rolling-horizon approach reflecting a myopic investor perspective. A hard link to a national energy system model ensures cross-scale consistency and reveals trade-offs and synergies between local feasibility and national climate objectives. Results show that flexible operation of electrified plants, particularly through expanded operating envelopes, improves both cost and emission performance at plant and system levels. While cluster integration can constrain operational flexibility, it enhances cost-effective CO2 mitigation. Infrastructure availability emerges as a key bottleneck, highlighting the need for early, coordinated investments in electricity and CO2 networks. Substantial emission reductions are achievable using near-market technologies that combine electrification, green hydrogen, and carbon capture and storage. However, absolute zero emissions are not feasible with these options alone. Achieving net-zero requires alternative fossil-free feedstocks, such as bio-based and synthetic carbon, whose competitiveness depends strongly on future policy frameworks, creating uncertainty about the long-term feedstock mix. Feedstock-flexible technologies, including electric steam methane reforming and methanol-to-olefins, consistently emerge as low-regret options that enhance system resilience. Technologies capable of exploiting low-cost variable electricity or feedstocks, such as CO2 electrolyzers, also offer strategic value. Overall, the analysis demonstrates that legacy assets strongly shape transition pathways, but net-zero chemical clusters are technically feasible and economically viable under supportive policy conditions. Early coordination between industrial and national strategies substantially reduces costs and accelerates emission reductions, whereas delayed action increases long-term expenditures. Methodologically, the framework bridges process- and system-level modeling; strategically, it identifies robust and cost-effective technology pathways. While uncertainty remains, postponing investment in anticipation of clarity is counterproductive. Timely deployment of flexible, low-regret technologies combined with coordinated infrastructure development provides the most resilient pathway toward climate-neutral chemical clusters.