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FEATURE: Blue hydrogen lifespan raises questions over carbon offsets


30-year lifespan for blue hydrogen projects

Could lead to reliance on unachievable offsets

Debate over CO2 capture rates, methane emissions

Lifecycle emissions from low-carbon hydrogen production are coming under scrutiny as policymakers set out long-term decarbonization pathways.

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Martin Tengler, a hydrogen analyst at research firm BloombergNEF, said the typical lifetime of blue hydrogen (methane reforming with carbon capture) facilities would be at least 30 years.

Many facilities proposed in the EU would be commissioned in the second half of this decade, raising questions over the need for significant carbon offsetting after 2050.

"If your lifetime is 30 years, you've got 10 years after 2050 when your facility is usable but you need to buy offsets to be net-zero," Tengler said. "But what if everybody does that? We cannot plant another planet full of trees."

The main proponent behind the HyNet hydrogen project in the UK told S&P Global Platts in September that blue hydrogen plants could typically be built on the basis of a 20-year life.

Chris Manson-Whitton, Director at Progressive Energy, said a long-term support mechanism similar to the UK's offshore wind regime could be needed to underpin such projects.

Operation beyond the term of a 15-year support regime would depend on the price of carbon emissions, he said.

"There is every expectation that by then, the cost of CO2 emissions under UK ETS will be such that it will be cheaper to purchase low carbon hydrogen, rather than pay for natural gas and the cost of emissions," Manson-Whitton said.

Lifecycle emissions

Researchers at Cornell and Stanford universities in the US published a study earlier this year finding that blue hydrogen produces 20% more carbon emissions in heat generation than using natural gas.

This is partly because of the additional power needed to run carbon-capture equipment, and the potential for methane leakages in natural gas production.

However, studies by S&P Global Platts Analytics and others have questioned some of the assumptions underpinning the report's conclusions.

Cutting-edge carbon capture technology being developed today, with CO2 capture rates from blue hydrogen projects of over 95%, make the technology a viable decarbonization pathway, they say.

The different conclusions are due to differing assumptions around methane leakage rates, and because the Cornell and Stanford study focused on two existing blue hydrogen plants in North America, while other analyses base their findings on new, emerging technology.

"Countries with access to low-leak sources of natural gas, which has been exploring policy options to include blue hydrogen, appear well-positioned to achieve significant emissions reductions from the widespread adoption of CCS in hydrogen production," Platts Analytics said in a report Aug. 17.

Blue hydrogen projects

The IEA said in its Global Hydrogen Review, published Oct. 4, that 16 projects producing hydrogen from fossil fuels with CCS were in operation, with a total output of 700,000 mt/year.

The United States and Canada accounted for the vast majority, with 80% of global blue hydrogen capacity.

Platts Analytics Hydrogen Production Asset Database shows current North American blue hydrogen production focused on the fertilizer, syngas and refining industries.

In Europe, oil and gas giants BP and Equinor and power producer Uniper are among those pursuing blue hydrogen production projects, while gas-producing powerhouses like the UK and the Netherlands have placed strong emphasis on the fuel in their decarbonization plans.

Celia Greaves, CEO of the UK hydrogen association, said supporting blue hydrogen now would pave the way for the ramp-up of green hydrogen production.

"All blue hydrogen projects currently underway in the UK are setting a high bar in terms of carbon capture with over 95% CO2 removal from the process considered a minimum," Greaves said in an email.

East Asian nations like Japan and Korea also plan to import large amounts of blue hydrogen in the coming decades, and the technology is gaining traction in the US as well.

Demand drivers

Driven by an uptick in hydrogen-powered commercial vehicles, demand for the fuel in Europe's key markets will grow by 30% by 2030, according to Platts Analytics.

At that point, blue hydrogen will make up 7% of the supply, with 27% green and 63% gray, it estimates.

Recent soaring gas and power prices have sent calculated costs for low-carbon hydrogen production up steeply, though costs are expected to fall dramatically in the medium term.

S&P Global Platts assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur14.62/kg ($16.90/kg) Oct. 7 (Netherlands, including capex).

PEM electrolysis production was assessed at Eur17.34/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur6.91/kg.

-- Camilla Naschert at S&P Global Market Intelligence contributed to this article