Blue hydrogen emissions under the microscope as a transition fuel | S&P Global Market Intelligence

2021-12-13 19:30:28 By : Ms. Christine lu

Thank you for your interest in S&P Global Market Intelligence! We noticed that you have indicated that you are a student. Through existing partnerships with academic institutions around the world, you may already have access to our resources. Please contact your professor, library or administrative staff to receive your student login information.

At this time, we are unable to directly provide free trials or product demonstrations to students. If you find that our solutions are not available to you, we encourage you to promote a first-class learning experience at your university, which will help you long after you complete your degree. We apologize for any inconvenience this may cause.

Fill out the form so we can connect you with the right person.

If your company is currently subscribed to S&P Global Market Intelligence, you can register as a new user to access the platforms covered by your license on the Market Intelligence platform or S&P Capital IQ.

One of our representatives will contact you shortly to help you start the demonstration.

We have generated a verification code for you

Blue hydrogen emissions under the microscope as a transition fuel

Q&A: Data Center: Energy Pig or Sustainability Assistant?

Insight Weekly: US stock performance; bank merger risk; COVID-19 vaccine manufacturer's revenue

S&P Capital IQ Pro | powered by expert insights

Next Technology | Episode 41: The Role of the Internet of Things in Energy and Utilities

As a key lever for global decarbonization, the so-called blue hydrogen has sparked controversy between scientists and energy experts in recent weeks, questioning the green certificate of this so-called low-carbon fuel.

Blue hydrogen is seen as a more sustainable alternative to the traditional emission-intensive "gray" hydrogen made from natural gas, and it uses carbon capture technology to curb greenhouse gas emissions. Oil and gas giants BP PLC and Equinor ASA and power producer Uniper SE are all pursuing blue hydrogen production projects, while natural gas heavy industrial powers such as the United Kingdom and the Netherlands attach great importance to fuel in their decarbonization plans.

But a recent scientific study on the climate benefits of blue hydrogen has sparked a wide-ranging debate about the advantages of this technology, which is often seen as a transitional solution to the journey to a “green” hydrogen economy. Renewable energy provides power.

American researchers have found that compared with using natural gas, blue hydrogen generates 20% more carbon emissions in the heating process. Part of the reason is that additional electricity is needed to run carbon capture equipment. If natural gas is used, it will lead to greater methane leakage and increased carbon emissions.

A few weeks after the study’s release, co-author Robert Howars, a Cornell University professor of ecology and environmental biology, told Standard & Poor’s Global Market Intelligence that he had not yet seen a convincing rebuttal to his argument. He said on September 3: “When we make mistakes, we scientists will change our minds [but] no one points out the papers we missed,” he added, adding that resistance comes from those who invest in the oil and gas industry or those who have Blue Hydrogen’s "emotional or intellectual entanglement".

"I think [criticism] is the people who have bought this blue hydrogen story," Howarth said.

Transition fuel or technology lock-in?

Howarth's research has sparked a more fundamental debate about the concept of blue hydrogen as a transition fuel. Martin Tengler, a hydrogen energy analyst at the research company BloombergNEF, said that the typical life of blue hydrogen facilities will be at least 30 years. Many facilities proposed by the European Union will achieve net zero emissions by 2050 and will be put into use in the second year. Half of this decade.

"If your life cycle is 30 years, then you have 10 years left after 2050, when your facilities can be used, but you need to purchase offsets to reach net zero," Tengler said in an interview. "But what if everyone does this? We can't plant another planet full of trees."

At the same time, it is expected that as early as 2030, green hydrogen made from renewable energy and electrolysis will compete with blue hydrogen in cost, he said.

The debate surrounding the pursuit of blue and green hydrogen, and the possible roles of these two fuels, has caused disagreements in the energy sector.

European power companies have focused most of their energy on green hydrogen, and the hydrogen strategies of countries such as Germany and France prioritize electrolysis. "In the long run, green hydrogen is the only sustainable solution," a spokesperson for Germany's RWE AG said in an email. "We believe that blue hydrogen is a supporting factor for some countries to establish a market."

Keith Anderson, CEO of Scottish Power Ltd., also emphasized the concern of the utility company owned by Iberdrola SA for green hydrogen, targeting users in industries that are difficult to electrify, such as industrial processes and heavy transportation. "We believe that zero means zero," he said in an email.

In contrast, the British and Dutch governments have included blue hydrogen in their national strategies. The Dutch gas company Gasunie Bbl BV stated that its natural gas infrastructure will be "color-blind" and may require intermediate solutions to complete the energy transition. "Ultimately, we believe that the future is the future of green hydrogen," a company spokesperson said in an email.

The chairman of the British hydrogen lobby even resigned because of the organization's support for blue hydrogen.

"You have an obligation to remain neutral [as chairman], and the honest answer is that I am not neutral," said Chris Jackson, who resigned from the British Hydrogen and Fuel Cell Association in August, in an interview. "I don't think blue hydrogen has a big chance."

Jackson is the chief executive officer of Protium Green Solutions Ltd., a green hydrogen developer. In view of the increase in natural gas prices, he believes that blue hydrogen is an uneconomical choice. He said that by the end of this decade, he will make green hydrogen cheaper anyway.

Celia Greaves, chief executive of the British Hydrogen Energy Association, said that supporting blue hydrogen now will pave the way for expanding green hydrogen production. "All blue hydrogen projects currently underway in the UK set high standards for carbon capture, and removing more than 95% of the carbon dioxide from this process is considered a minimum," Greaves said in an email.

"Live at peace" with blue hydrogen

Proponents believe that blue hydrogen is a pragmatic solution in view of the growing demand to solve the problem of decarbonization in various areas considered difficult to achieve electrification.

Michael Liebreich, founder, chairman and CEO of the Bloomberg New Energy Foundation, said: "This is why I compromised with blue hydrogen. I simply can't see fast enough green hydrogen production and enough Low environmental impact to meet demand.” Consulting firm Liebreich Associates posted on LinkedIn on September 13.

He added that aligning the technology with net zero would require a higher carbon capture rate of well over 90% and very low fugitive methane emissions.

In their study, Howarth and co-author Mark Jacobson, a professor of civil and environmental engineering at Stanford University, assumed the methane leakage rate of the gas was 3.5% and the carbon capture potential was as high as 90%. They described these numbers as conservative or generous to the blue hydrogen business.

The green hydrogen electrolyzer at the RWE plant in Germany. Source: ITM Power PLC

Criticisms of the study focused on Howarth and Jacobson's assumptions about methane leakage (they estimated between 1.5% and 4.3%) and the carbon capture rate.

The Norwegian think tank SINTEF stated that the study exaggerated the methane leakage rate and pointed out that European gas production emissions are as low as 0.23%, citing the oil and gas climate initiative.

A spokesperson for Equinor in Norway stated that Howarth and Jacobson’s carbon capture levels are based on “outdated and inefficient” steam methane reforming (SMR) technology, with an overall carbon dioxide capture rate of 76%. The spokesperson stated in an email to S&P Global Platts that more modern SMR technology and autothermal reforming or ATR can achieve conversion rates of 95% or higher.

Howarth called the methane leakage rate "a common finding" and added that the methane science in the United States is much more advanced than in Europe. "Europeans shouldn't think they can do better. You just don't seem to work so hard," he said.

Tengler of BloombergNEF said his team's assumption of the blue hydrogen plant's capture rate is 60% to 90%. "Even at 90% of the research hypothesis, this is still not enough for net zero," he said.

ATR uses oxygen to drive the reaction, rather than burning methane in SMR, and is described as a more carbon-efficient hydrogen production process. But Stanford University researcher Jacobson pointed out that ATR needs more equipment and electricity to produce the same output as SMR. “Most importantly, there is no free lunch here,” he said in a webinar organized by Green Energy Group on September 7.

According to this study, there are only two blue hydrogen plants in operation in the world, operated by Royal Dutch Shell of Canada and Texas Air Products. Carbon capture technology is still relatively expensive and lacks a record of commercial-scale projects.

"If it can't be done, then the blue hydrogen is gone," Liebreich wrote. "But I'm really not sure... how we can reach net zero in any time frame consistent with the Paris Agreement [climate change] while maintaining human progress."

More importantly, Howarth believes that the world's demand for hydrogen is exaggerated. "Globally, we use twice as much nitrogen fertilizer as we should. Instead of looking for blue hydrogen there, why not look for other methods?" he said. Even in the emission-intensive steel production, he saw room for more direct electrification using renewable energy. "I don't believe hydrogen is so important."

Tengler said that policymakers should first "consider whether hydrogen is needed first. Many industries are more electrified."

Throughout Europe and other regions, policy makers have decided to support hydrogen energy, and a national strategy covering many gigawatts of capacity has been agreed. The European Commission’s hydrogen strategic goal is to reach 40 GW of electrolyzer capacity by the end of this decade, but it also leaves room for “low-carbon” systems including blue hydrogen. East Asian countries such as Japan and South Korea also plan to import large amounts of blue hydrogen in the coming decades, and this technology is becoming more and more popular in the United States.

Data from Platts Analytics shows that, driven by the growth of hydrogen-powered commercial vehicles, by 2030, the demand for hydrogen fuel in major European markets will increase by 30%. Platts Analytics estimates that by then, blue hydrogen will account for 7% of the supply, of which 27% will be green and 63% will be gray.

So, does the research of Cornell University and Stanford University miss the spirit of the times? "Yes, we were late," Howard said. "Sometimes science affects policy, sometimes not...I hope our research comes out sooner, but policymakers should ask more questions."

S&P Global Platts reporter James Burgess contributed to this story. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.