[SMM Analysis] Analysis of Breakthrough in Methanol Production Technology via Hydrogenation of Carbon Dioxide Captured from Flue Gas at 10,000 mt-Scale Power Plants

Recently, China's first 100,000 mt-scale pilot plant for capturing carbon dioxide from power plant flue gas and hydrogenating it to produce methanol successfully passed a 72-hour continuous performance test. This milestone marks significant progress in China's carbon capture, utilization, and storage (CCUS) technology. This achievement not only demonstrates the power of technological innovation but also provides strong technical support for achieving the "dual carbon" goals. The following will provide an in-depth analysis from three aspects: the principle of hydrogen + carbon dioxide synthesis of methanol, the sources of raw materials, and the future technological prospects.

I. Principle of Hydrogen + Carbon Dioxide Synthesis of Methanol

Methanol (CH₃OH) is an important basic chemical raw material widely used in plastics, synthetic fibers, dyes, pesticides, pharmaceuticals, and other fields. Traditionally, methanol is mainly produced from fossil fuels such as natural gas or coal, a process that not only consumes significant resources but also generates greenhouse gas emissions. In contrast, synthesizing methanol from hydrogen and carbon dioxide is an environmentally friendly alternative.

This process is based on catalytic chemistry principles, where hydrogen and carbon dioxide are converted into methanol under high-temperature and high-pressure conditions using specific catalysts. The reaction formula is: 3H₂ + CO₂ → CH₃OH + H₂O. This process not only enables the resourceful utilization of carbon dioxide but also reduces greenhouse gas emissions, aligning with the concept of sustainable development.

II. Sources of Hydrogen and Carbon Dioxide in Methanol Synthesis

1. Hydrogen Sources : Hydrogen, as one of the key raw materials for methanol synthesis, has diverse sources. Under current technological conditions, hydrogen is mainly produced through water electrolysis, natural gas reforming, and biomass gasification. Among these, water electrolysis is a clean and pollution-free method, especially suitable for regions rich in renewable energy (e.g., wind and solar energy). Moreover, with technological advancements, the cost of hydrogen production via water electrolysis is gradually decreasing and is expected to become the mainstream method in the future.

2. Carbon Dioxide Sources : Carbon dioxide is primarily sourced from power plant flue gas and industrial waste gas. For example, carbon dioxide can be separated from power plant flue gas using capture technology and then used for methanol synthesis. This process not only reduces carbon emissions from power plants but also enables the resourceful utilization of carbon dioxide. According to data from this pilot plant, the average carbon dioxide capture rate exceeds 95%, with a maximum capture rate of over 99%, demonstrating the high efficiency of this technology.

The synthesis of methanol using hydrogen (especially green hydrogen, which is produced via water electrolysis powered by renewable energy such as wind and solar) and carbon dioxide has a cost gap compared to traditional coal-based or natural gas-based methanol production methods. Below is a cost analysis of the two methanol synthesis methods and a prediction of when costs might converge:

III. Cost of Hydrogen + Carbon Dioxide Synthesis of Methanol vs. Traditional Methanol Production

Cost of Hydrogen + Carbon Dioxide Synthesis of Methanol

According to specific cost calculations, the current production cost of methanol synthesized from hydrogen and carbon dioxide is approximately 3,950 yuan/mt (this figure may vary depending on different calculation conditions and assumptions). Among these, raw material costs account for about 85% of the total production cost, making it the primary cost; fixed costs account for about 10%; and process costs account for the smallest proportion.

• Raw Material Costs : These mainly include the costs of hydrogen and carbon dioxide. Hydrogen costs are influenced by green electricity prices, while carbon dioxide costs are relatively low but are also affected by capture and purification processes. According to publicly available information, hydrogen costs are one of the main expenses in the methanol synthesis process, whereas carbon dioxide prices, though fluctuating, are relatively lower compared to hydrogen.
• Process Costs : These include the consumption of catalysts, electricity, circulating cooling water, and process gases. The performance of catalysts significantly impacts methanol selectivity and single-pass conversion rates, thereby affecting overall process costs.
• Fixed Costs : These mainly consist of labour, depreciation, administrative, and sales expenses.

Cost of Traditional Methanol Production

Coal-Based Methanol: The price of raw coal is relatively stable but is influenced by market supply-demand relationships, transportation costs, and other factors. Coal-based methanol production is a mature process but involves high carbon emissions.

Natural Gas-Based Methanol: Natural gas prices are highly volatile, and thus the cost of natural gas-based methanol production fluctuates accordingly.

The cost of traditional methanol production varies depending on raw material type, production process, equipment depreciation, labour costs, and other factors. Generally, the cost of coal-based methanol is approximately 1,953 yuan/mt when coal prices are 800 yuan/mt.

Prediction of Cost Convergence

Currently, the cost of hydrogen + carbon dioxide synthesis of methanol is higher than that of traditional methanol production methods. However, with technological advancements, economies of scale, reductions in renewable energy costs, and improvements in carbon capture technology, the cost of hydrogen + carbon dioxide synthesis of methanol is expected to gradually decrease.

Specifically, the following developments will help reduce methanol synthesis costs:

1. Reduction in Green Electricity Costs : With continuous advancements in PV and wind power technologies and the expansion of installed capacity, the cost of green electricity will continue to decrease. This will directly lower hydrogen production costs, thereby reducing raw material costs for methanol synthesis.
2. Reduction in Carbon Capture Costs : As carbon capture technology improves and scales up, the cost of capturing carbon dioxide will also gradually decrease, helping to lower one of the raw material costs for methanol synthesis.
3. Improvement in Catalyst Performance : Enhancing catalyst performance will increase methanol selectivity and single-pass conversion rates, thereby reducing process costs.
4. Policy Support : Government support policies for the new energy and chemical industries, such as tax incentives and financial subsidies, will also help reduce methanol synthesis costs to some extent.

Considering the above factors, it is expected that in the coming years, driven by technological advancements and cost reductions, the cost of hydrogen + carbon dioxide synthesis of methanol will gradually approach and potentially surpass the cost of traditional methanol production methods. However, the exact timeline depends on the pace of technological progress, the strength of policy support, and changes in market demand, among other factors. Nevertheless, it is certain that with the growing global demand for carbon reduction and clean energy, the cost reduction and large-scale application of hydrogen + carbon dioxide synthesis of methanol will be an irreversible trend.

IV. Future Prospects of This Technology

1. Policy Support and Market Demand : As global attention to climate change intensifies, governments worldwide are introducing policies to promote the development of CCUS technology. Meanwhile, with the depletion of traditional fossil fuel resources and the growing awareness of environmental protection, the market demand for clean energy and low-carbon products is also increasing. This provides a broad market space for the development of hydrogen + carbon dioxide synthesis of methanol technology.

2. Technological Innovation and Cost Reduction : With continuous technological advancements and the application of large-scale production, the cost of hydrogen + carbon dioxide synthesis of methanol is expected to decrease further. For example, optimizing catalyst performance, improving reaction efficiency, and reducing energy consumption can significantly lower production costs. Additionally, as renewable energy-based hydrogen production technology matures and costs decrease, the cost of hydrogen as a raw material will also drop significantly, further driving the development of this technology.

3. Industry Chain Extension and Diversified Applications : In addition to being a chemical raw material, methanol can be further converted into other high-value-added products such as formaldehyde, acetic acid, and dimethyl ether. This will help extend the industry chain, increase product value, and expand application fields. Meanwhile, as the technology continues to mature and the market expands, hydrogen + carbon dioxide synthesis of methanol technology is expected to be applied and promoted in more fields.

In summary, hydrogen + carbon dioxide synthesis of methanol technology, as an environmentally friendly and resource-efficient chemical production method, has broad development prospects. In the future, with policy support, market promotion, continuous technological innovation, and cost reduction, this technology is expected to play an increasingly important role in achieving the "dual carbon" goals.

Written by: SMM Hydrogen Energy Analyst Xin Shi - 13515219405 (WeChat same)