In our mission to curb global warming quickly and dramatically reduce our carbon emissions, hydrogen is clearly part of the answer. When Energy Ministers from the G20 nations met in July, they put electrolytic (green) hydrogen and CCS-enabled hydrogen centre stage and consensus among all the ministers was that it should form the basis of the next COP.
Hydrogen has three important roles in our journey to net zero – decarbonising hard-to-abate sectors like steel and glass making, balancing the power grid that will be increasingly dependent on renewables; and as a building block for sustainable fuels and chemicals. Scaling up hydrogen production at pace is crucial but the drive to expand its use can get bogged down in debates about colours. The focus needs to be on building a sustainable hydrogen economy and helping customers understand how to access hydrogen in the most cost-effective and timely way to meet their sustainability needs.
The best way to achieve the scale up of hydrogen production is to be technology agnostic – embracing both CCS-enabled (blue) hydrogen and electrolytic (green) hydrogen production to ensure growing demand can be met quickly and sustainably.
Electrolytic (green) hydrogen will play a crucial role in decarbonising our energy mix and we should continue to increase its capacity. It is encouraging to see ongoing investment and more renewable capacity added to our energy system as this will help bring the overall cost of clean hydrogen down.
However, this alone will not be enough. Large scale electrolytic hydrogen project announcements are becoming more commonplace, but the number of these projects reaching final investment decision (FID) is limited by project financing and supply chain bottlenecks that make electrolytic hydrogen slower to scale in the near term. For example, there is only one gigawatt-scale electrolytic hydrogen project that has successfully reached FID – the 2.2 GW NEOM project in Saudi Arabia – so other routes are needed to meet demand.
There is also not enough renewable energy to meet our immediate needs for increased hydrogen. To put the scale of the task into context, on a global basis, replacing all fossil fuel derived hydrogen that is currently used with electrolytic (green) hydrogen would require all the solar and wind power generation capacity currently in operation - and we will need much more hydrogen to meet demand for new uses. BloombergNEF (BNEF) estimates hydrogen demand in 2050 will be five times what is today.
This is where CCS-enabled (blue) hydrogen comes in to complement electrolytic (green) hydrogen. It is ready to scale up now and can meet our immediate needs to reduce CO₂ emissions, while electrolytic hydrogen will take longer to scale. In 2023, CCS-enabled hydrogen is also less expensive, around 60% of the cost of electrolytic hydrogen, although the cost of electrolytic hydrogen is expected to fall longer term.
Both will have a long-term role in our energy mix to diversify our supply, protect the market from price fluctuations, and boost energy security. To continue making strides towards net zero, the debate around hydrogen needs to move away from colours and focus on lifecycle carbon intensity to encourage the right behaviour and avoid unintentionally slowing down the energy transition.
Today most hydrogen is produced from natural gas via steam methane reforming (SMR). While this technology has been used in industry for decades, its design is not optimised to produce hydrogen that meets stringent carbon intensity standards. As a result, SMR is not an economically efficient way to produce the large volumes of low carbon intensity hydrogen that are needed for the energy transition.
To meet this challenge, Johnson Matthey (JM) offers autothermal reforming (ATR) and autothermal reforming with gas-heated reforming (ATR-GHR) flowsheets within its LCH™ technology for CCS-enabled hydrogen and ammonia production. These flowsheets enable customers to meet carbon intensity standards cost effectively for new CCS-enabled hydrogen and ammonia plants by enabling carbon capture rates of 99%+ at a much lower cost than is possible with SMR. Our innovative ATR-GHR flowsheet is highly efficient and has the potential to deliver the lowest levelized cost of hydrogen (LCOH) for customers by minimising natural gas usage. All our technologies have already been proven at scale, reducing risk for customers.
To further grow the hydrogen market, a harmonised global certification is essential. A hydrogen trade market is crucial if hydrogen is to reach its full potential as a tool for decarbonisation because hydrogen production ability is not equally spread across the globe – it depends on availability of renewables and CO2 storage. To be able to trade hydrogen, the hydrogen market requires a standardised certification system that identifies the associated carbon footprint, and other sustainability criteria.
Cross-industry partnerships will help manage risk and enable the whole industry to scale up. While government has many of the levers to stimulate the hydrogen economy, the industry has an important role to play in driving innovation and cost reduction, directing investment to the correct areas, and ensuring the sector has the necessary skills for the future.
JM is investing across the hydrogen space to support the growing market. We are partnering with our customers, our supply chain, and other technology players to help the whole hydrogen economy scale together. Our partnership with Plug Power will help meet growing demand for fuel cells and electrolysers. We are working with Diffusion Alloys to scale up production of the coated components deployed in JM’s CCS-enabled hydrogen offering. We are working with technology players like Honeywell UOP to provide an integrated offer for customers, making it easier for them to do business with us. And of course, we work in partnership with our customers to offer the optimal process for their set-up, their geography, and their end need or product.
The hydrogen economy is an essential part of the solution to reach net zero. To maximise its potential, we need to move beyond colours and focus on carbon intensity; governments need to support project economics in the near term; and the industry needs to work collaboratively on scaling up to meet this challenge.
This article was originally published in H2 View.
1. Unleashing the power of hydrogen for the clean energy transition (worldbank.org)
2. BNEF Net Zero Scenario 2022 (Temperature rise by 2050: 1.77 °C)