Decentralized market mechanisms for multi-product industrial symbiosis in eco-industrial clusters with application to power-to-hydrogen integration

Eco-industrial clusters advance circular economies through industrial symbiosis, yet implementation faces challenges including centralized optimization models, ambiguous by-product valuation, and information privacy concerns. To address these challenges, this paper introduces a market-driven framework establishing multiple local energy markets within clusters, enabling transparent commodity valuation and individual profit maximization. It develops a competitive equilibrium model formulated as a Mixed Complementarity Problem (MCP) derived from Karush–Kuhn–Tucker conditions of each entity’s optimization. Applied to GreenLab Skive in Denmark, the framework enhances power-to-hydrogen (PtH) facility economics by integrating valuable by-products into multi-product trading alongside hydrogen sales. Results demonstrated 5.71% social welfare increase and improved PtH profitability through expanded economically viable operating hours. External economic factors prove crucial. Power purchase agreements and district heating network connectivity significantly influence symbiotic success. In fact, the decentralized approach overcomes traditional barriers while maintaining rigorous mathematical foundations, offering practical pathways for implementing industrial symbiosis in eco-industrial clusters.