The Port of Rotterdam expects the first plant for hydrogen produced from natural gas and refinery fuel gas under the H-vision initiative to be ready by the end of 2026, but stressed the need for policies to help support such fossil-based, or "blue", hydrogen projects.
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The results of a feasibility study showed in July 2019 that Rotterdam had the opportunity to develop itself into a major hub for the production, uptake and trading of hydrogen, and that a fossil-based hydrogen plant could be built by 2026.
The partners in the H-vision program include the Port of Rotterdam, gas producers including Equinor, BP, Shell, and ExxonMobil, and other gas industry players such as storage operators TAQA and Vopak, and grid operator Gasunie.
It had been hoped that a final investment decision on the project would be taken in 2021.
"Policy instruments have been lagging behind until now as there is no arrangement to financially support low-carbon/blue hydrogen when this is applied as fuel," a spokesman for the Port of Rotterdam said May 3.
"This gap requires clarification in the near future and we are in discussion on this with the government," the spokesman said.
"We still aim to have the first plant operationally ready at the end of 2026, but at the moment I don't have a detailed timeline, including FID, that I can share," he said.
In the meantime, he said, the H-vision project was making "good progress."
"A further step toward concrete implementation has been taken including technology, integration in the industry cluster, the required infrastructure and finance details," he said.
Under the H-vision initiative, a first hydrogen production plant with a capacity of approximately 750 MW is expected to be completed by late 2026.
A second hydrogen plant can increase the total capacity to over 1,500 MW.
The main focus of the H-vision program is the production of hydrogen using natural gas and refinery fuel gas, while the CO2 that is released during production will be captured and stored in depleted gas fields under the North Sea.
"The blue hydrogen obtained by these means can subsequently be used as a low-carbon energy carrier in industrial processes in order to generate high temperatures or to produce electricity," it said.
The production of blue hydrogen will be an important step to help industry cut emissions during the period when there is insufficient renewable electricity generation to produce large volumes of clean hydrogen.
According to the project developers, H-vision would be able to realize a "substantial" CO2 reduction in the short term, with savings set to increase from 2.2 million mt in 2026 to 4.3 million mt in 2031.
"When considered in relation to the total CO2 emissions of Rotterdam's industrial sector in 2018 (26.4 million mt), the adoption of blue hydrogen as an energy carrier for industrial purposes will result in an emission reduction of 16%," it said.
The price per tonne of CO2 saved ranges from Eur86 to Eur146 -- excluding ETS credits, it said.
The construction of the H-vision hydrogen installations is estimated to involve an investment of approximately Eur1.3 billion, while including the required infrastructure and technical adaptations at the industrial users' end, the total investment is estimated to be around Eur2 billion.