Pathways to green/blue methanol: exploring 16 different approaches incorporating electrolyzer, Allam cycle, and steam methane reforming

Abstract

Efforts to reduce greenhouse gas emissions necessitate a decrease in natural gas consumption. This also applies to grid electricity and blue H2, both of which are major energy sources derived from natural gas. This study explores the strategic use of natural gas—specifically through grid electricity sales and blue H2 production—to ensure economic feasibility in the transition to green methanol, which offers potential for CO2 storage and utilization. Two primary oxy-fuel combustion-based approaches are investigated to reduce the levelized cost of methanol (LCOM): (i) power generation via the Allam cycle and (ii) blue methanol production through steam methane reforming. Each of these methods is combined with five different types of electrolyzers, resulting in 16 distinct production pathways. Energy efficiency, carbon efficiency, and economic feasibility—including carbon tax considerations—are analyzed and compared across these pathways. Additionally, the sustainability of the process is assessed based on LCOM results, incorporating economic data from six countries as well as projected technological advancements. The electrolyzer achieves a high efficiency of over 60 % when integrated with SMR. However, in terms of specific carbon emissions, the Allam achieves below −1.0 tCO2/tMeOH. The integration of the Allam cycle with an H2O/CO2 co-electrolyzer demonstrates the highest potential across various scenarios. The findings of this study provide new insights and benchmarks for leveraging natural gas in the transition to green methanol. Notably, reducing LCOM through grid electricity sales presents an alternative pathway for green methanol production without dependence on blue hydrogen infrastructure. © 2025 Elsevier B.V.