Decarbonizing the Chemicals Industry with Electrolyzers

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Energy Capital Ventures

Decarbonizing the Chemicals Industry with Electrolyzers

Electrolyzers are quickly rising as one of the key technologies of the energy transition. We associate electrolyzers with green hydrogen but water electrolysis is only one of the many applications of electrochemistry in decarbonizing heavy industry. In fact, we can electrolyze CO₂ (carbon dioxide), N₂ (nitrogen) and other molecules - and sometimes co-electrolyze multiple molecules - to obtain green molecules such as synthetic Natural Gas or Sustainable Aviation Fuel (SAF). The provisions in the IRA, through the hydrogen production tax credit, the carbon sequestration / utilization tax credits, and the sustainable aviation fuel tax credits, are directly or indirectly subsidizing the chemical industry as well. Let’s see how.


In the race to achieve net zero by 2050, the chemicals industry is responsible for a very large portion of CO₂ emissions. According to the IEA, the chemicals industry is the largest industrial energy consumer and the third largest industry subsector in terms of direct CO₂ emissions, standing at close to 1 GtCO₂-eq. (out of a total of 37.12 GtCO₂ global annual emissions).

Exacerbating the issue is the fact that the chemicals industry is a hard-to-abate sector that currently lacks any mature decarbonization technologies: it relies heavily on fossil fuels as feedstock for chemical production and renewables cannot solve its high energy intensity. However, this presents, in itself, a huge opportunity for technological innovation: electrolysis.

100 million tons of hydrogen are produced annually, traditionally via steam methane reforming which emits high levels of CO₂ into the atmosphere (~10 tons of CO₂ per ton of H₂). As we covered in our prior blog posts What is Green Hydrogen? and The Economics of Green Hydrogen, water electrolysis is being rapidly developed to produce hydrogen via (ideally, but certainly not to be taken for granted) emission-free electricity. Below is a simple schematic of water electrolysis to produce Hydrogen and Oxygen.

How else are we using electrolyzers?

Beyond water splitting, the water electrolysis framework can be applied to CO₂ utilization. In CO₂ electrolysis, carbon dioxide and water are used as co-electrolyzers and converted into oxygen as well as chemicals and fuels such as syngas, ethylene and more.

The academic community is engaged and eager to develop this technology. However, in industry, enthusiasm for CO₂ electrolysis is less intense and large-scale commercialization has yet to be reached. A few examples of companies working to commercialize CO₂ electrolysis are Topsoe, Twelve, Cert and Air Company.

Like CO₂ electrolysis, the water electrolysis framework can be applied to nitrogen reduction. Again, there is strong enthusiasm in the literature for this technology, but there is yet to be large-scale commercialization. In the nitrogen reduction process, water and nitrogen are co-electrolyzed to produce oxygen and ammonia.

Steam methane reforming is the traditional process for producing ammonia. It is highly carbon intensive, accounting for about 400 million tons of CO₂ per year (Source: IEA) - that’s almost half of all petrochemical emissions! Electrolyzers for nitrogen reduction could be a new opportunity to transition to carbon-free ammonia production and decarbonize fertilizer production.

How else could we use electrolyzers?

In the same way that water electrolysis in hydrogen production has been leveraged for CO₂ and nitrogen electrolysis, electrolyzers can be applied to fuel and chemical production (special thanks to Dr. Swisher and Ashely at Mattiq for their recent report on this matter). By leveraging electrolysis, these industries can reduce emissions while, as production volumes increase and the technology matures, reduce costs.

  1. Sustainable Aviation Fuel (SAF)

The SAF market is rapidly growing and both the EU and US are setting minimum targets for SAF utilization in aviation, as the energy density of batteries or hydrogen systems are too low to enable (most) commercial flights. The IRA incentivizes its production with tax credits ranging from $1.25 to $1.75 per gallon, with additional state incentives that can be added to those to help defray the higher cost of SAF. However, the traditional SAF feedstock is minimal: plant oils and restaurant grease used to produce SAF today can only supply a small portion of the necessary fuel for the aviation industry.

Short chain carboxylic acids (sourced from lignin and biomass waste) can be co-electrolyzed with water in a process called “Kolbe Coupling” to produce useful, clean hydrogen as well as paraffins, a compound very close to the desired end product of jet fuel. Paraffins are long chain hydrocarbons which traditionally can only be sourced from fossil fuels; here, electrochemistry provides an alternative technique from a renewable feedstock to break free of the existing feedstock limitations.

  1. Hydrogen Peroxide (H₂O₂)

Hydrogen peroxide, used in the paper industry as a whitening agent and in the wastewater industry, is increasingly viewed as a “green oxidant” for other chemical processes but the current production technique has tremendous inefficiencies, requiring upwards of 260 liters of natural gas as a feedstock for 1 kg of H₂O₂ produced. Here, too, electrolysis has enormous opportunity to provide environmental and economic value: water and air can be co-electrolyzed in modular, “right-sized” reactors at the point-of-use to electrochemically produce hydrogen peroxide.

  1. Chemicals Production Direct Emission Avoidance

Oxygenate production contributes significant carbon dioxide pollution, accounting for 30% of total chemical industry emissions. Examples of oxygenates include compounds such as ethylene glycol (used to make antifreeze and brake fluids), ethylene oxide (used for household products like shampoo, disinfectants, and laundry detergents), and methanol (used to make clothing, for adhesives and paint, as a base material for plastics, and as a chemical agent in pharmaceuticals).

Electrochemistry can be used to selectively oxidize hydrocarbon feedstocks and eliminate the hundreds of million tons of direct CO₂ emissions from the oxygenate production process. Additionally, by co-electrolyzing water and a hydrocarbon feedstock not only is an oxygenate produced, but so is usable, clean hydrogen.


There is a massive opportunity to decarbonize the chemicals industry and address the sector’s  global emissions footprint with the development of electrolyzer technology. The advantage of having two reactions happening at the same time in the same reactor results in value-add at both of the electrodes. In each of the above cases, valuable chemicals or fuels are produced in carbon neutral, electrochemical processes in one of the electrodes, and in the other electrode, another valuable compound is produced, which is oftentimes hydrogen.

The academic literature is in support of the scientific viability of this technology. Tax incentives allow for it to be cost competitive with traditional, thermochemical processes. Now, it is time for private funding and startups to take the next step in developing this technology to the point where it is scalable and commercially feasible to decarbonize the chemicals industry. At ECV, we are big supporters of new ways of producing green molecules at scale and if you are working on solving these problems, we would love to hear from you!