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Blue Hydrogen

We need “blue” hydrogen. And we need to get it right.

September 3, 2021 Work Area: Zero-Carbon Fuels

Hydrogen is essential to decarbonizing key parts of the economy. While “green” hydrogen could dominate in the long term, “blue” hydrogen can reduce emissions quickly in the near-term – if policy-makers reward appropriate performance.

The Intergovernmental Panel on Climate Change has warned us – again – that we need to reduce greenhouse gas (GHG) emissions to net zero by mid-century in order to avoid the most damaging impacts of climate change. This means that rapid and deep emission reductions are critical for both carbon dioxide and shorter-lived climate pollutants, especially methane. At the same time, the International Energy Agency tells us that CO2 emissions in 2021 are expected to grow about 5% over 2020 levels and will reach nearly pre-pandemic levels by the end of the year. The reason is simple: deployment of higher-emitting energy sources continues to outpace deployment of lower-emitting energy sources.

Despite the growth in emissions, there remain reasons for optimism. Data from the International Renewable Energy Agency indicates that global renewable electricity capacity grew by about 10% in 2020 (primarily driven by wind and solar). These are critical additions to clean electricity supplies for the growing world. But they are not enough, and clean electricity is not the only problem we need to solve. Energy consumption and emissions continue to grow in heavy trucking, international marine shipping, iron and steel, and industrial process heating (e.g., chemicals manufacturing), where replacement with clean electricity can be especially difficult.

Hydrogen is a solution for decarbonizing these hard-to-electrify sectors. Hydrogen is a potent energy carrier that contains no carbon and so emits no CO2 at its point of use. About 70 million tons per year of hydrogen are used around the world today, mostly as feedstock in oil refining and fertilizer production. Analysts estimate that between half a billion and one billion tons per year (or more) of hydrogen could be needed by mid-century, representing one quarter of global final energy demand in some decarbonization scenarios. Policy-makers in the U.S., Europe, and Asia have begun to focus on ensuring these hydrogen supplies are available to support decarbonization efforts. If hydrogen produced without significant greenhouse gas emissions is not available at large scale, these sectors are unlikely to fully decarbonize.

Unfortunately, very little hydrogen is freely available in nature. It must be manufactured using other primary energy and materials, and that production process can result in significant greenhouse gas emissions. Electricity can be used to split hydrogen from water (a process called electrolysis), and heat can be used to split hydrogen from hydrocarbons (a process called reforming, which also relies on some water). Although the technical details are complex and variable, the basic pathways are shown below. The vast majority of today’s hydrogen is produced by the reforming pathway (and by “gasification” of solid fuels, which is chemically similar).

Hydrogen use flow graphic

Greenhouse gas emissions can come from any of the stages shown, including the upstream production of gas and electricity, the hydrogen production site itself, and even downstream use in some cases. Of course, those emissions depend on the technology and practices employed at each stage. For the electrolysis pathway the largest emissions will generally come from electricity generation in the upstream stages. Unmanaged, these emissions can be significant. Combustion of fuels used in electricity generation in the upstream stage for an electrolyzer connected to the Texas power grid today would result in around 23 kilograms of CO2 for each kilogram of hydrogen produced. For the reforming pathway, the largest emissions could be from the upstream stages (primarily methane emissions from natural gas production) or from the production site itself. A new reformer site would emit around 9 kilograms of CO2 for each kg of hydrogen produced. Emission reductions through the process stages are possible with technology (such as carbon capture on reformers) and with operational practices (such as leak prevention in the natural gas production system and purchases of low-emitting electricity).

Renewable electricity combined with electrolysis can yield hydrogen with a very low lifecycle greenhouse gas footprint. Proposals to use renewable electricity for hydrogen production therefore are critical and worthy of significant public support. But it is risky to assume that electrolysis with renewable electricity can provide all the hydrogen volumes we might need by mid-century for decarbonization. To meet demand we need to develop other production pathways in parallel, including reforming based pathways with carbon capture, which are often called “blue” when referring to hydrogen fuel production. Here’s why:

  • Additionality: “Blue” hydrogen is low-carbon, but doesn’t rely on precious clean electricity. Despite the rapid growth in renewable electricity generation around the world, in aggregate it still has not kept pace with fossil-fueled electricity generation. Even in some regions where renewable generation is growing fast and fossil-fueled generation is shrinking, the grid is still relatively carbon-intensive and it could take decades before enough renewable electricity is available to fully displace fossil fuels. In these circumstances, using renewable electricity for hydrogen production can delay decarbonization of the grid. This is not uniformly true, of course. “Excess” or “curtailed” renewable generation can be used for hydrogen production without increasing the carbon intensity of the grid and might even reduce it when stored for later use, and high-value renewables located far from electric load centers can be used for large-scale production and export of hydrogen without adverse electricity system consequences. As a general matter, however, producing hydrogen with renewable electricity will increase the amount of renewable electricity we need to generate, and this increases other decarbonization challenges. Modeling performed for CATF indicates that to decarbonize the United States we may need around 20 times more wind and solar than we have today to serve direct loads (e.g., electric cars and home heating) and around 40 times more if renewable electricity is also used to produce all required hydrogen.
  • Development Pace: “Blue” hydrogen can reduce pressure on scarce land resources. Recent analysis by The Nature Conservancy suggests that wind energy in the United States may directly impact 40 times more land, per unit of energy produced, than conventional natural gas production. This measure includes both wind turbines themselves and the spacing between the turbines. Even assuming that carbon capture doubled the footprint of natural gas production (which appears unlikely), wind energy would still require 20 times more land than natural gas. And this land use is increasingly a source of delay, cost over-runs, and outright moratoria on renewable energy development. Using wind and solar generation to produce hydrogen, especially if it doubles the required capacity, could increase the rate at which communities become saturated with renewable energy extraction, threatening successful climate mitigation both in electricity and fuels production. Advanced renewables such as superhot rock geothermal may change this, but that development and deployment will take time. By producing energy from outside the electricity system, “blue” hydrogen could help conserve scarce land and accelerate the shift towards low-carbon energy without delays related to land requirements.
  • Costs: For now, “blue” hydrogen is less expensive than “green” hydrogen. Mainstream estimates of “blue” hydrogen production cost in regions with lower-cost natural gas are around $1.50 per kg or less. “Green” hydrogen is more than two times that amount today, and reductions will require significant improvements in electrolysis and very low-cost electricity. Many analysts expect that those low costs can be reached, at least in some regions of the world, but it could take several decades before costs that low are commonplace for “green” hydrogen production. During this period, however long, “blue” hydrogen will often be lower cost than “green”, and would allow us to extend our decarbonization investment dollar. In general, lower hydrogen costs will promote more rapid and deeper decarbonization, while allowing additional funds to be invested in infrastructure and other decarbonization needs.

Even though we need hydrogen from fossil fuels with carbon capture, that does not ensure that it will be adequately clean. In addition to very effective carbon capture from reforming, upstream methane emissions must be cut dramatically (relative to the average U.S. leak rate) to make this hydrogen a fuel that is compatible with decarbonization. Estimates of the greenhouse gas impact of “blue” hydrogen span a wide spectrum, primarily driven by assumptions about methane leak rates in the upstream natural gas supply chain and the efficiency of reformers in the production process (particularly the carbon capture portion of those processes). While some recent estimates of these impacts have been quite high, a much lower greenhouse gas footprint for “blue” hydrogen is feasible. We know this because measurements indicate that some gas fields in the U.S. have leak rates as low as 0.3%-0.4% – far lower than the current leak rate (probably in excess of 2%). And we know how strong regulations, based upon established state precedents, can drive much of the needed reductions. Reducing emissions from the natural gas value chain is not just feasible, it’s also politically popular.

Two bar graphs
Notes to figure: These cases are based on realistic assumptions for comparison purposes, using a simplified lifecycle analysis, as described below. “Natural gas” reflects combustion of natural gas (51 kg CO2 emitted per gigajoule gross heating value of natural gas consumed) plus leaks (0.35% of natural gas consumed is released upstream, assumed as 100% methane; 13.7 kg of natural gas required per gigajoule gross heating value) plus CO2 emissions associated with natural gas production and transmission (assumed here at 0.1 kg CO2 per kg natural gas). ”Green H2” reflects conventional low-temperature electrolysis using 52 kWh of electricity per kg of hydrogen produced, operated 90% of the time using non-emitting electricity and 10% of the time using electricity at Texas grid CO2 intensity (450 kg CO2 per MWh). “Blue H2” reflects SMR with 90% post-combustion CO2 capture, following IEA (2017) analysis, plus emissions from the natural gas supply as used in the “Natural Gas” case. Higher levels of carbon capture are feasible with more advanced technology. No credit has been taken for the small residual electricity production from this case. Emissions associated with equipment manufacturing and construction (such as photovoltaic panels, which can create a significant lifecycle footprint for solar power, for the “Green H2” case) have been omitted from all cases. The greenhouse gas impact of emitted hydrogen itself is also omitted, as these emissions would occur downstream of production sites and could be similar to those of methane leaks in natural gas delivery, which also are not included here, and would be similar for both “blue” and “green” pathways. Although not shown in the figure, based on IEA (2017) a methane reformer without carbon capture would result in emissions around 12 kg CO2-eq per kg of hydrogen, assuming a methane leak rate of 2.3% and a methane GWP of 34 (equivalent to 85 kg CO2-eq per GJ-HHV).

On the carbon capture side, reformers achieving 90% overall carbon capture or more can be built today using commercial technology. Combined, these lower methane leak rates and higher performance reformers with high levels of carbon capture can produce hydrogen that results in about an 80% reduction in greenhouse gas emissions compared to direct use of natural gas (for example, in industrial furnaces) – and even lower emissions than some hydrogen that might be considered “green”.

Production of “blue” hydrogen with a low greenhouse gas footprint is feasible today, and even lower levels are possible over time. Because hydrogen fuels are valuable precisely due to their greenhouse gas benefits, policymakers must tie incentives for hydrogen fuel production to lifecycle greenhouse gas performance, and industry must comply. A combination of standards, regulations and market mechanisms that reward the cleanest production are likely needed. Graduated or tiered incentives tied to lifecycle greenhouse emissions levels could accomplish this. Rigorous monitoring and verification of emissions associated with all production pathways will be required. In the end, if the “blue” hydrogen industry is to play a meaningful role in decarbonization, it will need to build and operate infrastructure that delivers on its full emission reduction potential.

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