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To maximize climate benefits, CATF finds, use low-carbon hydrogen where it will deliver significant emissions reductions

November 21, 2023 Work Area: Zero-Carbon Fuels

A new position paper from Clean Air Task Force establishes priority applications for low-carbon hydrogen, finding that it is best used to replace existing carbon-intensive hydrogen where no alternatives exist — including in crude oil refining, ammonia (e.g. fertilizers), methanol production, and steel/iron production. CATF also recommends low-carbon hydrogen to produce fuels for transportation applications that are difficult to electrify, including aviation fuel, marine shipping fuel, and heavy-duty trucking fuels. 

“Hydrogen’s qualities as a low-carbon energy carrier have made it an increasingly popular option in global decarbonization strategies,” says Magnolia Tovar Global Director for Zero-Carbon Fuels at CATF. “But it’s important we consider the economic realities of producing and transporting low-carbon hydrogen, and focus on the best, most practical use cases to maximize its climate benefit. That means cleaning up existing hydrogen production, and focusing on sectors that can’t be otherwise decarbonized.”  

The paper, A Realistic Assessment of Hydrogen for Decarbonization, identifies a limited set of priority sectors for the use of low-carbon hydrogen based on a summary assessment of its production, transportation, and delivery costs. It explains that: 

  • Virtually all hydrogen produced today – more than 99% – is made from fossil fuels or uses fossil fuel energy inputs, without carbon abatement. 
  • Large-scale hydrogen production facilities are capital intensive and require abundant supplies of clean electricity (in the case of water electrolysis) or highly effective carbon capture systems with other supporting infrastructure such as CO2 pipelines and geologic storage facilities (in the case of steam methane reforming with carbon capture and storage), in addition to strict methane emission control. 
  • Large-scale water electrolysis facilities would compete for clean electricity at a time when demand for renewable generation to decarbonize the power sector as a whole is high and growing. 
  • The cost of electricity is likely to play the most important role in driving down production costs electrolytic hydrogen, which is unlikely to fall below $3/kg H2 (Real USD 2022) on average for the foreseeable future. 
  • Hydrogen’s intrinsic physical properties make it such that maritime transport of hydrogen is costly and/or inefficient. 

“Given low-carbon hydrogen’s physical properties and potential costs, it is best used in applications where there are simply no other viable decarbonization options.” said Ghassan Wakim, Hydrogen Technology Director at CATF. “Ideally, the market, shaped by increasingly stringent decarbonization policies, can decide how the low-carbon hydrogen is used. But, industrial policy should encourage — or at least not discourage — future investments and markets for low-carbon hydrogen that take certain prioritizations into account.” 

The International Energy Agency (IEA) has estimated that future hydrogen demand could increase, from approximately 95 million tonnes per year at present to 430 million tonnes per year by 2050.  

Ghassan Wakim continues: 

“The main debate now should not center on whether it will be technically feasible to greatly expand low-carbon hydrogen production and use, but rather where and to what extent switching to low-carbon hydrogen can be an energy-efficient and cost-effective strategy for reducing greenhouse gas emissions, taking into account the availability of other decarbonization tools.” 

Read the report here for a detailed description of findings. Learn more about CATF’s work in this space here.  

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