Optimising green value chains for the chemical industry in Europe

Transforming Europe's basic chemical industries for climate neutrality necessitates strategic decisions about sourcing green ammonia and methanol. Using a spatially detailed, techno-economic optimisation model for 72 industrial sites, we compare three distinct value chain setups: domestic production, hydrogen imports, and direct commodity imports. Direct commodity imports consistently emerge as the most cost-effective strategy for most countries, with average savings of 14 % for ammonia and 18 % for methanol in 2040. However, the picture is more diverse across the individual countries. Domestic ammonia production remains competitive in regions with abundant renewables like Southern Europe and Norway, while hydrogen imports offer strategic value for the largest industrial sites in Germany, the Netherlands, and hubs near the MENA region. On average, a fully domestic production of green ammonia would result in 15 % higher costs at European level equal to about 1.4 billion €/year - compared to commodity imports. At site level, the cost premium ranges between −13 % (domestic production is cheaper than imports) and +38 %. Our findings provide policymakers with a foundation to develop industrial transition strategies that balance cost efficiency and sovereignty in the ammonia/fertiliser and methanol/chemicals value chains. They underline the importance of European cooperation by deploying best wind and solar potentials and establishing European energy transport infrastructure as backbone of a competitive net-zero industry.