Blue hydrogen serves as low-carbon bridge to green hydrogen future, experts say

Blue hydrogen will be critical to scaling-up the global hydrogen market as the cost of producing low-carbon supplies from renewable energy gradually falls through 2030 and beyond, according to energy system experts.

A new report by Columbia University's Center on Global Energy Policy, or CGEP, outlined the cost and process challenges facing green hydrogen, which is produced through electrolysis using zero-carbon power. Hydrogen produced from natural gas paired with carbon capture technology, known as blue hydrogen, can essentially function as a bridge to a hydrogen economy dominated by green supplies, panelists at an Aug. 26 CGEP webinar said.

Hydrogen demand could reach 530 million tonnes per year by 2050, yielding 6 billion tonnes per year in carbon abatement, panelists noted, citing projections from the Hydrogen Council, a consortium of companies that support hydrogen development. The cost of hydrogen will determine whether the fuel can deliver on that potential, according to Alex Zapantis, a general manager at Global CCS Institute, a carbon capture and storage think tank.

"Blue hydrogen is well positioned to kickstart that rapid scale-up because it's available, it's mature, and has been operating at meaningful scale quite literally for decades," Zapantis said.

Green hydrogen's cost problem

Zero-carbon energy is the main cost driver for green hydrogen production, which today averages $6-$12 per kilogram in most markets, the CGEP found. Meanwhile, the cost of blue hydrogen today is about $1.50-$2.40/kg, based on gas prices ranging from $3-$11/MMBtu, according to an earlier report from the Global CCS Institute.

The CGEP projected that despite efforts to slash green hydrogen costs, the fuel's mean levelized cost will be $4-8/kg in 2030 across three geographic groups: the U.S.; Europe; and China, Japan and India. In some parts of the U.S. and Europe, levelized costs of $2.30-$3.00/kg will be possible where cheap electricity and high capacity factors are available, according to the study the CGEP released Aug. 26.

Yet green hydrogen will likely be cheaper by 2040 and almost certainly by 2050, according to CGEP senior research scholar Julio Friedmann.

"So in the next 20 years, we see a role for both of these fuels, but in the long haul, green hydrogen is going to be the dominant producer of low-carbon hydrogen in the system," Friedmann said during the panel discussion. Friedmann previously oversaw U.S. Energy Department research and development into advanced fossil energy systems, carbon capture and storage, and carbon utilization.

Infrastructure challenges are underappreciated

In addition to cost hurdles, electricity and land requirements differentiate blue and green hydrogen, Zapantis said.

For instance, the proposed Asian Renewable Energy Hub project in northwest Australia would use 97 TWh of electricity and cover 5,750 square kilometers of land to produce 1.76 million tons per year of green hydrogen, Zapantis noted. To produce an equivalent amount of blue hydrogen would require 3-7 TWh of power and roughly 17 square kilometers of land as well as 500 kilometers of CO2 pipeline, Zapantis said.

Using that site for hydrogen production makes sense because it has "fantastic" renewable energy resources and no opportunity to connect to an established power grid, Zapantis said. However, where there is a grid nearby that draws power from fossil fuel generation, it makes more sense to feed new renewable power capacity into the grid, Zapantis noted. That would deliver greater emissions abatement than using the electric power to produce hydrogen to displace natural gas in a power plant, Zapantis said.

The infrastructure challenges of scaling-up green hydrogen production are underappreciated today, Friedmann said. The CGEP study found that producing 88 million tons of green hydrogen per year by 2030, in line with one International Energy Agency scenario, could cost $2.4 trillion and require 1,238 GW of new zero-carbon power generation capacity.

The cost of building out renewable power supplies, transmission lines and electrolyzers to fulfill 530 million tonnes of demand by 2050 could be on the scale of $14 trillion, Friedmann said. Using a blend of green and blue hydrogen could reduce that cost, Friedmann added.

Blue hydrogen emissions debate

Asked about a recent study that concluded that burning blue hydrogen produced through steam methane reforming carries higher life-cycle emissions than simply combusting gas, Friedmann said the CGEP's study assumed very different conditions.

The CGEP assumed 90% carbon capture from blue hydrogen projects, reflecting targets in recent project announcements and an emerging shift to auto-thermal reformation technology, Friedmann said. The CGEP also assumed less than 1% fugitive emissions from upstream production. Friedmann pointed to the Biden administration's recent moves to regulate upstream methane emissions and the gas industry's push to reduce leaks across the value chain.

With 90% or greater carbon capture, blue hydrogen production from natural gas could achieve a footprint of below 2 kg of carbon per kilogram of hydrogen production, according to the Global CCS Institute. That compares with carbon footprints of 8-9 kg and 22 kg for hydrogen production from natural gas without carbon capture and storage and coal gasification, respectively.

Friedmann said the CGEP would not recommend producing blue hydrogen under less stringent conditions and noted that its assumptions match those used by the International Energy Agency and the Intergovernmental Panel on Climate Change. "We're pretty confident that our initial assumptions are accurate and more representative of both the current and future practice," Friedmann said.

The CGEP recommended that policymakers take a colorblind approach to planning and analysis to determine whether blue or green hydrogen production best suited their geography, rather than picking a pathway before understanding the associated costs and challenges.