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North American low-carbon hydrogen production to triple by 2030

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North American low-carbon hydrogen production is predicted to nearly triple by 2030, reaching 1.4 million tonnes per year (mtpa).

According to a GlobalData analysis titled North American Hydrogen Market – Overview, Demand, Policies, Deals, and Key Players, blue hydrogen will account for at least 85% of all low-carbon hydrogen produced.

“Due to low natural gas prices and an abundance of ideal sites for geological carbon storage, blue hydrogen generation in North America is among the cheapest in the world,” said Miles Weinstein, Energy Transition Analyst at GlobalData.

“However, the cost of producing blue hydrogen in the United States is $1.52/kg, compared to $1/kg for grey hydrogen. While Canadian costs are equal to those in the United States, Canada has a significant advantage in blue hydrogen, owing to existing natural gas extraction and carbon sequestration infrastructure, as well as financing for low-carbon vehicles and fuels.

“However, due to higher natural gas prices or, in certain circumstances, cheap renewable electricity, the capacity of green hydrogen plants greatly outpaces that of blue hydrogen plants in most other global regions.”

“While blue hydrogen is more expensive to create than grey hydrogen, tax subsidies for carbon capture and storage in the United States have effectively reduced the cost of blue hydrogen to $1.26/kg, with $1.11/kg expected by 2026. In Canada, a similar tax credit is now being considered.”

The growing popularity of hydrogen is evidenced by a recent increase in the number of hydrogen deals in North America. In terms of total reported deal value, 2021 is already a record-breaking year.

“Since collaborations are frequently an indication of impending projects,” Weinstein noted, “it’s possible that green hydrogen production in North America will increase.” Transportation, blue hydrogen, green fuels, fuel cells, and maritime cargo are other prevalent collaboration areas in North America.

“To lower CAPEX, a focused R&D effort will be required in the case of green hydrogen. Finally, the continued development of a hydrogen value chain provides assurance that the infrastructure required to meet rising demand will be in place.”

Arnes Biogradlija
Creative Content Director at EnergyNews.Biz

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