May-2024

Blue hydrogen a low-carbon energy carrier: Part 1

Through the capture and storage of CO2 generated during hydrogen production, blue hydrogen can achieve carbon neutrality or even yield negative emissions.

Himmat Singh
Research Scientist

Article Summary

The global blue hydrogen (H2) market size is anticipated to grow at a compound annual growth rate (CAGR) of 14.8% in the present decade. The growing emphasis on clean hydrogen energy with low carbon content, rising usage of hydrogen fuel as an active propulsion system in the automotive industry, and speculation of blue hydrogen working as an enabler of green hydrogen are some reasons behind the growth of the market. Blue hydrogen has a strong role to play in the energy transition by helping to build a hydrogen market while continuing to lower emissions.

Like the green variety, blue hydrogen at present is expensive to produce compared to the traditional carbon-intensive production processes used today. By reducing blue hydrogen’s costs, companies could speed up hydrogen’s much-vaunted replacement of fossil fuels. European countries have been working on several projects to boost the adoption of blue hydrogen in various regions.

Part 1 is an overview of hydrogen and blue hydrogen in terms of their role in energy mix, estimated demand in the coming decades, and committed huge investments. The overview also covers emerging and matured blue hydrogen technologies, namely steam methane reforming (SMR), autothermal reforming (ATR), natural gas decomposition (NGD), and the newly introduced Shell SGP process.

Part 2 concludes in PTQ Q3 2024 with a detailed comparative assessment of cost, greenhouse gas (GHG) emissions, and other parameters relating to three mature technologies, with a brief appraisal of blue hydrogen market dynamics, end-use insights, and concluding remarks.

CO2-to-H2 ratio
Hydrogen is the most abundant element in the universe, and it could play an essential role in tomorrow’s energy mix, from fuelling all modes of transport to generating electricity and powering industry. Colours of hydrogen are increasingly used to distinguish different production methods and as a proxy to represent the associated environmental impact. Today, close to 95% of hydrogen production comes from fossil resources. As a result, the carbon dioxide (CO2) emissions from hydrogen production are quite high. Grey, black, and brown hydrogen refer to fossil-based production. Grey is the most common form of production and comes from natural gas, or methane (CH4), using steam methane reformation but without capturing CO2. It creates around 10 tons of CO2 for every ton of hydrogen produced. Therefore, there is a need to find a way to produce clean hydrogen that is less carbon intensive.

There are two ways to move toward cleaner hydrogen production. One is applying carbon capture and storage (CCS) for fossil fuel-based hydrogen production processes. Natural gas-based hydrogen production with CCS is referred to as blue hydrogen – a low-carbon energy carrier. CO2 storage is typically accomplished by injecting the gas into geological formations such as saline aquifers or depleted oil fields. Green hydrogen is produced by using electricity generated from renewable sources, such as wind and solar, to produce hydrogen via electrolysis.

The IEA estimates that the demand for hydrogen today is about 90 mtpa, almost all of which is used for ammonia production and refining and is forecast to reach about 200 mtpa by 2030 and more than 500 mtpa by 2050. There are other estimates as well, but they are at variance with the IEA. Meeting this demand will require an unparalleled transformation in how clean hydrogen is produced.

Europe and China have committed huge investments through to 2030 to lower carbon via blue and green hydrogen projects, for an estimated production capacity of more than 10 mtpa by 2030. However, this is far below the demand forecast, leaving a considerable need for further projects and investments. While green hydrogen may be the better economic option in some locations, blue hydrogen has an advantage in others, and therefore both are needed in the short and medium term. In short, both types of hydrogen reinforce each other’s strength.

To meet their Paris Agreement commitments, many countries are turning to blue hydrogen projects as a medium-term solution for hydrogen mass production while also developing green hydrogen for future production. The UK, for example, has prioritised driving the growth of blue hydrogen as part of its Ten Point Plan to reach its net zero ambitions.

Blue hydrogen shares similarities with grey hydrogen, the key difference being that instead of releasing CO2 into the atmosphere, it is captured and stored. Blue hydrogen has been a clear leader in the evolution of the hydrogen industry. Carbon capture technologies can be retrofitted onto existing hydrogen processes or integrated into new plants by design. Notable plans for hydrogen projects include Air Product’s announced plans for Europe’s largest blue hydrogen production plant, and RAG Austria says it has commissioned “the world’s first 100% hydrogen storage facility in a porous underground reservoir”. The global blue hydrogen market is projected to grow at a CAGR of 8.0% by 2033.

Further discussions relate to different ways to produce blue hydrogen using different technological paths, taking into consideration major innovations and challenges, with brief appraisal of blue hydrogen market dynamics, end-use insights, and concluding remarks (including future outlook).

Blue hydrogen technologies
Producing hydrogen in a carbon-neutral manner is challenging (and potentially expensive), but the many colourful means of producing hydrogen provide exciting opportunities. Once available, it can be used in almost every vertical in the energy space. This includes power generation, energy storage, e-fuels production for aviation and heavy road and rail transport, as well as cement and steel manufacturing, along with applications in other carbon-intensive industries.

Blue hydrogen, produced from fossil fuels with CO2 capture, is currently viewed as the bridge between the high-emissions grey hydrogen and the limited-scale zero-emission green hydrogen. Two recent reports on blue hydrogen production technologies highlight different commercially deployed and emerging hydrogen production processes from fossil fuels and biofuels, along with recent advancements in hydrogen storage and transport.

Progressive Energy1 for the Bacton Energy Hub (BEH) Hydrogen Supply Special Interest Group (SIG) documents technologies for blue hydrogen production from natural gas with CCS, along with the auxiliary process stages required. As many as 13 technologies have been listed, along with their readiness level. SMR and autothermal and POX processes are the mature processes, followed by one modified version of SMR and two modified versions of ATR. The remaining seven technologies are still at a low level of readiness.

The Hafenstorm report includes a comparison of the six main blue hydrogen production technologies, its 10-year market forecasts for 2023-2033, and supply chains, along with seven application areas, major innovations and projects. The report also examines applicable carbon capture, utilisation, and storage (CCUS) technologies and discusses the prospects and challenges of producing blue hydrogen. Blue hydrogen is going to grow due to global decarbonisation efforts in hard-to-abate sectors, such as oil refining and ammonia production.