Strategic low-carbon hydrogen supply chain planning under market price uncertainty

With the increased emphasis on decarbonization in recent years, there is a growing interest in the development of sustainable industrial supply chains. With its widespread applications, clean hydrogen holds immense potential to push forward the goal of a net-zero economy. For this reason, we develop mathematical models to optimize the design and planning of low-carbon hydrogen supply chains, specifically when the potential markets are willing to pay certain premiums for hydrogen of different levels of carbon intensity. We introduce the concept of a hydrogen supply chain with virtual distribution of carbon intensities, which allows more cost-effective supply chain operations compared with the conventional model in which different carbon intensities associated with a product can only be achieved through physical blending. Additionally, owing to the difficulty in predicting future hydrogen prices, we propose a multistage stochastic programming framework to account for uncertainty in market prices. The proposed model is applied to a network of hydrogen production plants and potential markets, highlighting differences in decisions across different scenarios.