At the recent World Hydrogen Summit, industry experts argued that Europe needs to incorporate blue hydrogen into its energy strategy to meet short-term decarbonization targets more cost-effectively.
Blue hydrogen, produced using natural gas with carbon capture, offers a scalable and potentially lower-cost alternative to green hydrogen, which relies on renewable energy sources.
David Burns, Vice President of Clean Energy at Linde, emphasized that focusing exclusively on green hydrogen might delay significant CO2 reductions. Blue hydrogen can be developed more rapidly and at a larger scale than green hydrogen, which is constrained by the current capabilities of electrolysers. John Gunn from Bechtel highlighted that achieving the same scale with green hydrogen would require massive investments in electrolysis infrastructure, which may not be feasible in the near term.
Burns pointed out that while the elements of blue hydrogen production have been tested at scale, the carbon capture and storage (CCS) component remains a challenge. Despite this, the cost of blue hydrogen production in regions like the US, where natural gas prices are low, is considerably cheaper compared to Europe. However, the high cost of natural gas in Europe means that importing blue hydrogen might be more economical than producing it domestically.
The effectiveness of CCS technology is crucial for blue hydrogen to be considered a clean energy source. However, flagship projects like Shell’s Quest and Chevron’s Gorgon have captured less than half of the emissions from their facilities. Additionally, capturing the remaining emissions from the flue stack in steam methane reformers (SMRs) is energy-intensive and costly.
Building the necessary CCS infrastructure in time to meet 2030 decarbonization targets is another significant hurdle. Rafael Fejervary from SLB warned that permitting for CO2 sequestration wells in the US can take five to six years, which could delay project timelines.
The economics of blue hydrogen production may not favor Europe due to high feedstock costs and the need for offshore CO2 storage. Burns and Fejervary both noted that developing CCS infrastructure is cheaper outside Europe, making regions with lower costs and onshore storage options more competitive.
Upstream methane emissions are a significant concern, particularly in the US where emissions are notoriously high. Burns highlighted that high-quality methane with low upstream emissions is essential for blue hydrogen to achieve low carbon intensity. Europe could have an advantage in this area, potentially offsetting some cost disadvantages with cleaner feedstock.
Most current CCS projects use CO2 for enhanced oil recovery (EOR), which critics argue could lead to more greenhouse gas emissions than the CO2 stored. This dual use of fossil fuels for hydrogen production and EOR raises questions about the overall environmental impact of blue hydrogen.
