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Hydrogen is a key part of BP's drive to deliver decarbonization solutions, and a "massive" opportunity for the company, Vice President for Hydrogen Market Development Sally Prickett said in an interview at S&P Global Platts Hydrogen Markets Europe Conference Nov. 25.

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"We see hydrogen as a really important vector in decarbonizing some of the particularly difficult-to-decarbonize areas of industry and transport," Prickett told Platts.

"In a net-zero world, we can see clean hydrogen delivering about 16% or even more of the energy mix, which is about the same as natural gas in today's energy mix. So the opportunity is absolutely massive," she said.

Over the next 10 years BP would invest in both electrolysis and gas reforming with CCS-based production pathways "to drive the technology and the costs down, and allow the rest of the industry to build," she said.

Prickett emphasized a partnership approach to developing the market, targeting sectors where the potential for decarbonization was greatest. These included refining, chemicals, high-temperature industrial heat, steel production and heavy transport.

Viable business models

BP has several electrolyzer projects centered around some of its European refineries, as well as a large-scale blue hydrogen project in Teesside that's part of an industrial decarbonization cluster in the UK.

"We have an opportunity to really leverage that captive demand, our own demand, to anchor early projects to manage some of that risk to be able to develop those early projects," Prickett said.

But the company was pursuing demand opportunities beyond its own needs.

"We've committed to deliver 10% of clean hydrogen into our core markets, and those core markets include Europe," she said.

Developing hydrogen projects around industrial clusters would help build scale and lower costs, she said, adding that support mechanisms and business models from policy makers were also critical.

"The mechanisms around incentivizing and creating a sustainable business model are really important. I think a difference in 2021 versus 2020 is we're really seeing those actions starting to take shape," Prickett said.

"Whether it's contract for difference mechanisms, or things like the EU's renewable energy directive II or renewable fuel credit in the UK, we're actually seeing the opportunity to create viable business models for these early projects," she said.

Carbon pricing models for hydrogen production, as well as the right regulations and consistency on certification of hydrogen would also facilitate the development of the market.

"There are lessons to be learned, not just from gas and LNG, but across multiple industries. But I think we do have something quite different here with hydrogen, and we can't just take the rule book that was written for other industries," she said.

Selected BP hydrogen projects

Project Capacity (MW) Location Country Technology Partners In service date
H2Teesside 1,000 Teesside UK Blue BP, Shell, Equinor 2027
GetH2 300 Lingen Germany Green RWE, Nowega, BP, OGE 2026
H2-Fifty 250 Rotterdam Netherlands Green BP, Nouryon, Port of Rotterdam 2025
Lingen Refinery 60 Lingen Germany Green BP, Orsted 2023
Castellon 20 Castellon Spain Green BP, Iberdrola, Enagas 2023

Source: S&P Global Platts Analytics Hydrogen Production Asset Database; BP; GetH2

International trade

BP sees opportunities around trading and shipping hydrogen and its derivatives such as ammonia.

"The opportunity for hydrogen and its derivatives to be a molecule to move clean energy from places that have abundant advantaged resources -- whether that be wind and sun or whether it be natural gas and CCUS availability -- to the demand centers such as Europe, which probably can't self-supply at the kind of ambition that's being talked about today, is incredibly exciting," Prickett said.

"We do think that ammonia is a really interesting energy vector, particularly where it can be used as an end fuel as well," such as power generation or the marine sector, she added.

"We're already see starting to see molecules move on the water, and testing and developing technologies. I think the scale-up comes towards the end of this decade, but we'll see more and more players and projects working to enable these solutions."

The company hoped to integrate its large-scale renewable power pipeline, targeting 50 GW of renewable development by 2030, with hydrogen projects, along with leveraging its trading and shipping capability to drive costs down, Prickett said.

S&P Global Platts assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur12.49/kg ($14.00/kg) Nov. 25 (Netherlands, including capex), based on month-ahead power prices, while values in potential exporting region the Middle East were just $2.63/kg (Qatar).

Heavy transport applications

Hydrogen was a likely solution for decarbonizing heavy-duty transport such as trucks or the marine sector, Prickett said.

"We see the potential for significant growth over the next 10 years," she said.

"BP's energy outlook says the energy demand across transportation is going to double by 2050. So the energy demand is there. We need to drive efficiencies down in order to help decarbonize that energy, but we also need the alternative fuels" where electrification wasn't an effective solution, she added.

BP has committed to delivering at least 50 hydrogen refueling stations for heavy-duty transport by 2030.