BLUE HYDROGEN

During early stages of the energy transition, the use of BLUE HYDROGEN (i.e. grey hydrogen with carbon capture and storage [CCS]) could facilitate the growth of a hydrogen market. Around three-quarters of hydrogen is currently produced from natural gas. Retrofitting with CCS would allow the continued use of existing assets while still achieving lower GHG emissions. This is an option is to produce hydrogen with lower GHG emissions while reducing pressure on the renewable energy capacity installation rate to produce green hydrogen. Notably, industrial processes like steel production may require a continuous flow of hydrogen; blue hydrogen could be an initial solution while green hydrogen ramps up production and storage capacity to meet the continuous flow requirement.

However, blue hydrogen has limitations that have so far restricted its deployment: it uses finite resources, is exposed to fossil fuel price fluctuations, and does not support the goals of energy security. Moreover, blue hydrogen faces social acceptance issues, as it is associated with additional costs for CO2 transport and storage and requires monitoring of stored CO2. In addition, CCS capture efficiencies are expected to reach 85-95% at best,2 which means that 5-15% of the CO2 will still be emitted. And these high capture rates have yet to be achieved.

In sum, the carbon emissions from hydrogen generation could be reduced by CCS but not eliminated. Moreover, these processes use methane, which brings leakages upstream, and methane is a much more potent GHG per molecule than CO2. This means that while blue hydrogen could reduce CO2 emissions, it does not meet the requirements of a net-zero future. For these reasons, blue hydrogen should be seen only as a short-term transition to facilitate the uptake of green hydrogen on the path to net-zero emissions.