Techno-Economic Analysis of Flare Gas to Hydrogen: A Lean and Green Sustainability Approach

The increasing demand for hydrogen has made it a promising alternative for decarbonizing industries and reducing CO₂ emissions. Although mainly produced through the gray pathway, the integration of carbon capture and storage (CCS) reduces the CO₂ emissions. This study presents a sustainability method that uses flare gas for hydrogen production through steam methane reforming (SMR) with CCS, supported by a techno-economic analysis. Data Envelopment Analysis (DEA) was used to evaluate the oil company’s efficiency, and inverse DEA/sensitivity analysis identified maximum flare gas reduction, which was modeled in Aspen HYSYS V14. Subsequently, an economic evaluation was performed to determine the levelized cost of hydrogen (LCOH) and the cost–benefit ratio (CBR) for Nigeria. The CBR results were 2.15 (payback of 4.11 years with carbon credit) and 1.96 (payback of 4.55 years without carbon credit), indicating strong economic feasibility. These findings promote a practical approach for waste reduction, aiding Nigeria’s transition to a circular, low-carbon economy, and demonstrate a positive relationship between lean and green strategies in the petroleum sector.