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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Why Is There So Much Hype About Hydrogen

Renewable energy sources can help lower emissions from electricity generation, but they have limitations when it comes to other sectors. Wind and solar, for example, can’t help much with the decarbonization of energy-intensive industries such as steel-making, marine fuels, or heavy-duty transportation.   So industries and governments are looking at alternative fuels that could make those hard-to-decarbonize sectors less polluting as the world grapples with reducing greenhouse gas emissions.

In recent years, hydrogen has gained a lot of momentum. It now features in nearly every strategy of Big Oil and can be seen in many government plans for industry decarbonization.  

Governments, international organizations, and oil and gas supermajors say that blue hydrogen (hydrogen plus carbon capture and storage) and green hydrogen (hydrogen made of water electrolysis using electricity from solar or wind) could be the key to helping the decarbonization of emission-intensive industries in the energy transition. 

“Green Hydrogen Will Be An Essential Factor In Making The Energy Transition A Success”

Hydrogen will play a prominent role in lowering the carbon emissions from energy-intensive industries, according to German utility giant RWE, which has pledged to become carbon neutral by 2040. 

“What makes us so optimistic is that, currently, hydrogen is the only technical solution to decarbonize parts of… energy intensive industry, aviation, maritime, but also heavy-duty transportation,” RWE’s incoming chief executive Markus Krebber told CNBC’s Joumanna Bercetche earlier this month. 

RWE is discussing a regulatory framework with the German government to potentially “kickstart” a hydrogen economy, Krebber told CNBC. 

Related: Google, Samsung, BMW And Volvo Support Ban On Deep-sea Mining
The German utility is boosting its renewable power generation, which will - someday - help with green hydrogen production. 

By the end of next year, RWE aims to expand its portfolio of wind and solar power plants to more than 13 gigawatts (GW) from over 9 GW now, the company said in its 2020 earnings release this month. 

“RWE is convinced that, in addition to the further expansion of renewables, green hydrogen will be an essential factor in making the energy transition a success. The company is participating in some 30 hydrogen projects,” it said. 

“Hydrogen will replace fossil fuels in many industrial processes and will be used in transportation in cases where batteries are unsuitable. This is why we are proactively developing a hydrogen economy, both in Germany and beyond,” says RWE. But RWE acknowledges that substantial investments will be needed to make green hydrogen and related infrastructure a cost-viable solution on an industrial scale. 

Green Vs Blue Hydrogen

Despite the promises of green hydrogen, most of today’s hydrogen production comes from natural gas reforming and coal gasification, with significant associated CO2 emissions, the International Energy Agency (IEA) says.

Green hydrogen is still prohibitively expensive for industrial-scale operations. Therefore, many oil and gas majors, while ultimately aiming to become green hydrogen producers, are now betting on the so-called blue hydrogen, which is still produced from natural gas, but with carbon capture and utilization or storage (CCUS) to remove the emissions from making the hydrogen.  

“Coupling conventional technologies with CCUS is still the main route for low-carbon hydrogen production and will likely remain so in the short to medium term because production costs are lower than for other low-carbon technologies such as electrolysis,” the IEA said in a report last year. 

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Green or blue, Big Oil has recently bet big on hydrogen as part of the offering of low-carbon energy solutions to help curb emissions and decarbonize energy-intensive industries where emissions are hard to abate.

Big Oil Bets Big On Hydrogen

French supermajor Total looks to become a large producer of clean hydrogen one day, chairman and chief executive Patrick Pouyanné said at an event last month. Total and energy provider Engie have applied for subsidies which, if obtained, would allow them to build the largest green hydrogen facility in France that will use only solar power to produce hydrogen.

Engie is also partnering with Norway’s giant Equinor to explore the potential of producing blue hydrogen in Belgium, the Netherlands, and France.

Spain’s Repsol, which like the other European majors has pledged net-zero emissions by 2050, said in February that it would rely on four main pillars in its transformation: energy efficiency, the circular economy, renewable hydrogen, and capture and use of CO2. 

BP, Shell, and Eni are also developing green hydrogen projects.  

BP said this month it had started developing plans for what would be the largest hydrogen project in the UK, aiming to produce 1 GW of blue hydrogen by 2030. 

Shell is leading several hydrogen projects worldwide, including the NortH2 project in the Netherlands, expected to be the largest European green hydrogen project by 2040. In December 2020, RWE and Equinor joined the NortH2 partner consortium. 


Shell also bets on hydrogen as one of the fuels that could help cut emissions in the shipping industry. 

“We believe liquid hydrogen to be advantaged over other potential zero-emissions fuels for shipping, therefore giving a higher likelihood of success,” the supermajor said in its 2020 report ‘Decarbonising Shipping: Setting Shell’s Course.’  

It’s not only the European majors that aim to boost their position in the emerging hydrogen economy.  

ExxonMobil said on its Investor Day this month it was positioned to succeed in hydrogen, noting that low-carbon hydrogen from natural gas with CCS has cost and scale advantages versus alternatives. 

Chevron is now looking to invest in low-carbon technologies such as hydrogen and carbon capture, utilization, and storage in itsPlan to Deliver Higher Returns, Lower Carbon.” 

Until technologies and scale allow green hydrogen to compete with other forms of hydrogen in terms of costs, the world’s top oil and gas companies are betting on blue hydrogen to potentially develop a solution for decarbonizing energy-intensive industries.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on April 01 2021 said:
    There is so much hype about hydrogen because it is now in vogue to talk about it. Even the claim that green hydrogen will be an essential factor in making energy transition a success is hype built upon hype.

    Hydrogen is overwhelmingly produced from natural gas in what is known as blue hydrogen while green hydrogen in miniscule amounts is produced by electrolysis powered by electricity. Both of them are expensive to produce and both of them need far more energy to produce than they will eventually give. If this is the case, wouldn’t be cheaper, more cost-effective and logical to use natural gas directly thus bypassing hydrogen?

    A gradual energy transition wouldn’t succeed without major contributions from natural gas and nuclear energy. As such, the notion of zero emissions is an illusion.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • George Kafantaris on April 01 2021 said:
    There is no fight with the fossil fuels. Indeed, the only way for us to effectively fight climate change is with the help of fossil fuels. Renewable energy from the sun and the wind are simply not enough. They are not even enough to satisfy our increasing appetite for power.
    Nuclear and hydro can certainly help but even these two are not enough. The only way we can make up for the balance of the power we need is with blue hydrogen that is made from natural gas using carbon capture and storage. There is lots and lots of natural gas all over the world to help us do this, including right here in the United States and nearby Canada. Aside from blue hydrogen, we can also make ammonia to power airplanes and ships; and to make fertilizer and steel. Indeed, ammonia will become the medium to transport the hydrogen itself since it holds 150% more hydrogen than even liquid hydrogen. So yes, fossil fuels are the necessary partners in our Herculean efforts at decarbonization — and integral ones too — if we are to make a dent on climate change. And we must make a dent — or else.
  • Daniel Williams on April 02 2021 said:
    There is no hype around hydrogen. From Australia to Chile, Morocco to Albania, Brazil and Uruguay - and then countries such as Spain planning 67GW (equivalent to most of the UK electricity grid); the hydrogen economy is approaching fast. Asia will be producing hydrogen vehicles at a scale to rival the approaching wave of battery vehicle megafactories - and the cost of hydrogen will be low.

    Oil companies (in the West) have been slow at first, but as net zero targets start to come into force (30-37% emissions reduction in the EU by 2030 for passenger and freight vehicles by 2030 respectively); they will be less reticent to further the continuing decline in their existing asset base. Profits are down, and are unlikely to return after the past decade of ever-diminishing investment.

    All these factors are discussed in detail within my book; 'Planet Zero Carbon - A Policy Playbook for the Energy Transition', which is available now on Amazon.

Leave a comment

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