From Hydrocarbon Wealth to Low-Carbon Opportunity: Modeling Hydrogen Value Chain Deployment in Developing Fossil Fuel Economies

An integrated CLEWs–OSeMOSYS optimization model is developed to map credible hydrogen value-chain pathways for a fossil-fuel economy, linking electricity, industry, transport, water, and land. Using Iran as a case, we quantify least-cost deployments under business-as-usual, moderate (−35% CO₂), and ambitious (−55% CO₂) scenarios, with sensitivities on gas prices, export prices, and carbon penalties. Under current techno-economic conditions, the model finds that a gas- and CCS-dominated pathway constitutes the least-cost option for Iran, driven by low domestic gas prices and cost-effective carbon capture. Baseline results show electricity demand nearly doubling by mid-century and persistent gas reliance. With moderate and ambitious policies, low-carbon hydrogen (SMR/gasification with CCS) and green derivatives (ammonia, CCU-methanol) scale, steel shifts to EAF, and gas demand declines as anaerobic-digestion gas grows. Export prices > US$3,000 t⁻¹ trigger hydrogen exports and methanol synthesis; gas prices ≥ US$0.25 m³ accelerate renewable gas. Total system investment rises by roughly 18–24% in the moderate scenario and 35–42% in the ambitious scenario relative to the least-cost baseline. The framework highlights cross-sector trade-offs, showing how policy ambition and prices shape technology mix, export orientation, and domestic decarbonization. Findings offer a transferable tool for hydrocarbon-rich economies planning hydrogen-centered transitions.