The comparison between on-site nitrogen production and CO2 purchasing for breweries comes down to a trade-off between initial investment versus operational costs. On-site nitrogen generators require a higher initial investment (€10,000-€50,000) but offer lower operational costs (approximately €0.10-€0.20 per m³), while CO2 purchasing has minimal start-up costs but higher ongoing expenses (€1-€3 per kg). For medium to large breweries, the payback period for in-house nitrogen production is typically 1-3 years, after which the cost benefits become significant.
What are the costs and benefits of on-site nitrogen production versus CO2 purchasing?
When comparing on-site nitrogen production versus CO2 purchasing for breweries, you face a trade-off between short and long-term costs versus operational benefits. This choice has a direct impact on your brewing process and business operations.
On-site nitrogen production is characterized by:
- Higher initial investment in equipment and installation
- Lower operational costs in the long term
- Independence from external suppliers
- Constant availability without supply risks
CO2 purchasing, on the other hand, offers:
- Minimal initial investment
- Higher operational costs due to ongoing purchases
- Dependency on suppliers and their price fluctuations
- Need for storage space and risk of leakages
The optimal choice strongly depends on your production volume, available space, and long-term strategy. For small breweries with limited usage, CO2 purchasing can be cost-effective, while larger operations often benefit more from in-house nitrogen production.
What are the initial investment costs for on-site nitrogen production?
The acquisition of an on-site nitrogen generation system for a brewery requires a significant initial investment that varies between €10,000 for smaller systems to €50,000 or more for larger installations. These costs are determined by your specific needs and capacity requirements.
The main investment components include:
- Nitrogen generator – The core component that converts air into nitrogen (€8,000-€40,000)
- Air compressor – Necessary to supply the generator with compressed air (€2,000-€10,000 if not already present)
- Filtration systems – Essential for pure nitrogen production (€1,000-€3,000)
- Storage tank – For buffering produced nitrogen (€1,500-€5,000)
- Installation and piping – Costs for integrating into your existing system (€1,000-€5,000)
Additionally, you must consider potential adjustments to your electrical installation and possible permits. These investments may seem substantial but should be weighed against long-term savings and operational advantages.
How do the operational costs compare between nitrogen production and CO2 purchasing?
The operational costs between in-house nitrogen production and CO2 purchasing differ significantly in structure and scale. With on-site nitrogen production, you primarily pay for electricity, with costs between €0.10-€0.20 per m³ of nitrogen, while CO2 purchasing typically costs €1-€3 per kg, excluding tank rental and delivery costs.
The main operational cost items for on-site nitrogen production are:
- Electricity consumption (largest cost item, approximately 70-80% of operational costs)
- Periodic maintenance and filter replacements (10-15% of operational costs)
- Incidental repairs and spare parts
For CO2 purchasing you need to consider:
- Purchase costs per kg CO2 (main cost item)
- Delivery and transportation costs
- Rental costs for storage tanks or bottles
- Costs for detecting and repairing leakages
- Administrative burdens for orders and supplier management
A medium-sized brewery can spend between €5,000-€15,000 annually on CO2, while the operational costs for comparable nitrogen production capacity typically range between €1,500-€4,000. This difference increases as your production volume grows.
When is the payback period reached when investing in in-house nitrogen production?
The payback period for an investment in on-site nitrogen production is between 1 and 3 years for most breweries, depending on your current CO2 consumption and operational circumstances. This period becomes shorter as your gas consumption increases or CO2 prices rise.
The key factors influencing your payback period are:
- Your current annual expenses on CO2
- The size of your investment in nitrogen generation equipment
- Your production volume and production frequency
- Electricity costs in your region
- Any available subsidies for energy-saving technologies
For a typical medium-sized brewery spending €10,000 annually on CO2 and investing in a nitrogen generator of €25,000, the payback period can be approximately 2.5 years. Larger breweries with higher consumption can sometimes recoup this investment within 12 months.
An accurate ROI calculation must account for all cost factors, including maintenance, energy consumption, and equipment lifespan (typically 10-15 years). After the payback period, you realize significant cost savings that directly contribute to your profitability.
What non-financial benefits does on-site nitrogen production offer for breweries?
Besides the financial advantages, on-site nitrogen production offers various operational and strategic benefits that aren’t directly visible in cost calculations but add significant value to your brewery.
The main non-financial benefits are:
- Supply security – No dependency on external suppliers, delivery times, or limitations
- Continuity of the brewing process – No production stops due to gas shortages or supply problems
- Greater control over gas quality – Consistent purity for quality beer production that contributes to product quality
- Improved safety – Fewer risks associated with storage of large quantities of CO2
- Sustainability – Lower CO2 footprint through reduced transport and less leakage
- Marketing advantage – Opportunity to position your brewery as innovative and environmentally conscious
Many brewers also report an improved working environment by eliminating cylinder changes and reduced concerns about gas deliveries during peak production times. The ability to produce exactly the required amount of nitrogen when needed also offers flexibility during production fluctuations.
What is the best choice for your specific brewery?
The optimal choice between on-site nitrogen production and CO2 purchasing depends on your specific situation and future plans. For a well-considered decision, you must evaluate several key factors.
On-site nitrogen production is likely your best option if:
- Your brewery produces more than 5,000 liters of beer per month
- You have a long-term perspective (3+ years)
- Continuity and independence are important values in your business operations
- You have sufficient space for the installation
- Sustainability is an important part of your business philosophy
CO2 purchasing may be more suitable when:
- Your production volume is small or very irregular
- You have limited investment capacity in the short term
- Your brewery is still in the startup phase with uncertain future prospects
- You have very limited technical support on site
A detailed analysis of your specific situation is essential for the right decision. Factors such as production volume, growth plans, available space, and energy costs all play a role. We recommend having a customized cost calculation made that takes your specific circumstances into account.
For breweries pursuing continuity, cost efficiency, and sustainability, on-site nitrogen production typically offers the best long-term solution. Contact us for personalized advice and a cost-benefit analysis tailored to your brewery to make the right decision.
