A Techno-economic Analysis of Ethylene Decarbonization in India

Abstract

The decarbonization of India’s chemical sector is crucial for India to achieve its net-zero targets. The production of ethylene, a key building block of the chemical industry, currently relies on fossil fuel combustion to supply high-temperature heat, contributing approximately half of India’s chemical sector emissions and prompting significant interest in exploring decarbonization strategies. This thesis builds a bottom-up techno-economic model evaluating four decarbonized approaches to supply industrial heat for ethylene production: a) electrification through grid connection, b) electrification through captive renewable energy, c) green hydrogen combustion, and d) blue hydrogen combustion. These pathways are evaluated based on the calculated levelized cost of carbon abatement (LCCA), feasibility considerations, and technoeconomic assumptions specific to the Indian context, with a sensitivity analysis conducted to identify the key drivers affecting pathway viability. The two electrification pathways with captive renewable energy and grid connection exhibited comparable base-case LCCAs of $136/tCO2 and $146/tCO2, respectively. The blue hydrogen pathway demonstrated a slightly higher LCCA of $213/tCO2, while the green hydrogen pathway exhibited the highest LCCA of $534/tCO2. The electrification through captive renewable energy pathway appears to be best suited for India given its lowest cost of carbon abatement and lower dependence on highly uncertain risk factors. The robust, immediate value proposition of the electrification pathway found in this study differs from the academic consensus, offering surprising implications for the decarbonization of India’s ethylene sector.