Could Blue Hydrogen Accelerate Transition To Green?

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

Every mode of transportation is considering hydrogen and hydrogen-based fuels such as e-methanol to decarbonize freight. But there is debate about whether hydrogen needs to be green right away or if the industry should use blue hydrogen until the cost of green hydrogen becomes more economical.

Green hydrogen is produced using renewable electricity that powers electrolyzers to split water into hydrogen and oxygen. Blue hydrogen is produced using natural gas reformation, but its carbon dioxide emissions are captured and stored. Blue hydrogen has potential to help ramp up demand for and production of green hydrogen, but there are worries about keeping natural gas in the loop.

Demand signals, speeding up the sustainable transition

Using blue hydrogen as green hydrogen gains ground would send demand signals to potential green hydrogen producers and likely speed up the transition as hydrogen-powered trucks, locomotives, aircraft and vessels are developed.

"The primary benefit of investing in downstream technology is to act as a demand driver — a signal that pulls forward and provides producers with a clear signal to de-risk some of those investments, which you have to do to drive down costs," said Tyler Cole, director of carbon intelligence at FreightWaves.

Blue hydrogen could help solve the chicken-and-the-egg problem — producers are hesitant to invest in green hydrogen production, and companies are hesitant to invest in vehicles that run on hydrogen before sufficient supplies of hydrogen are available. 

"It's not perfect, but maybe it's good enough while we wait for the green fuels to actually make it into the mix," Torben Nørgaard, head of energy and fuels at Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, told FreightWaves. 

What is the industry waiting for? It's waiting for economies of scale and technological advances to bring down the cost and increase the availability of green hydrogen.

Federal and subnational investments in infrastructure and green hydrogen technologies could speed up the transition. The Department of Energy's Hydrogen Earthshots Initiative has a target to reduce the cost of green hydrogen to $1 per kilogram by 2030, an 80% reduction from current costs. 

"What I've noticed is that hydrogen kind of gets that rap, but electric vehicle charging doesn't really get that rap as much. No one's saying, ‘All chargers need to have green power tomorrow,'" Kimberly Okafor, strategic business development manager at Trillium, said during a Fuels Institute webinar.

The majority of EVs are charged on the grid, which is powered by a mixture of energy sources such as natural gas, coal and renewable energy. But there is little debate about whether EVs are a good investment because as the grid gets greener, so does the electricity powering EVs. The EV industry is focusing on infrastructure and technology as renewable energy gains ground. 

In the same way, Okafor said there should be less focus on whether hydrogen is green right away and more focus on developing hydrogen technologies.

"Sometimes folks, whether it be policymakers or legislators or whatever, put hydrogen in kind of a bucket to where it needs to be green on day one. All of it needs to come through solar and wind, and all of it has to happen today," Okafor said.

"Instead of going for the green hydrogen on day one, let's get what we can get that makes economic sense and have a goal to get to that white horse in the end," Okafor said.

Potential issues with blue hydrogen

Cole said one potential risk of using gray or blue hydrogen is "locking in emissions by investing in infrastructure or providing extended life to assets that should be retired." 

Aside from extending hydrogen-related emissions, limited capital could be a potential reason why switching to green hydrogen right away would be important. If the industry believes it has limited funds, it may prioritize spending on the greatest emissions-reduction solutions available, which would put green hydrogen before any other hydrogen production techniques, Cole said.

There's one major environmental obstacle to using blue hydrogen: methane leaks, according to Nørgaard. Because blue hydrogen is produced using natural gas, there is a risk of methane being leaked into the atmosphere from upstream or during transportation. "That is something that needs to be addressed for this to make sense," he said.

Nørgaard noted that it's also important to make sure captured and stored carbon dioxide does not escape into the atmosphere when producing blue hydrogen.

Future of blue, green hydrogen

Blue fuels such as blue hydrogen are less expensive and easier to scale because they can often reuse existing infrastructure, Nørgaard said. "That's why they work."

He said there are several challenges such as fugitive methane emissions to consider before using blue fuels, but using blue hydrogen could help scale hydrogen-powered fleets that would be ready to operate on green hydrogen as soon as it becomes available.

"We have an opportunity to accelerate the transition if we can make the blue fuels work," Nørgaard said. 

Cole said he is bullish on hydrogen and predicted that about 100,000 over-the-road trucks could be running on green hydrogen by 2030 in the U.S. In terms of carbon reduction, he said that may not be considered a huge success, but ramping up from virtually zero to 100,000 hydrogen-powered trucks in the U.S. would be "pretty impressive" in a decade.

Nørgaard said, "The challenge to the industry is that we don't have that much time. We need to start the transition and really decarbonize aggressively. We want to have a fully decarbonized industry by 2050. But it's not just the end target at 2050 that matters. It's also the route toward that, the pace at which we decarbonize that matters." 

Click here for more FreightWaves articles by Alyssa Sporrer.

Related Stories:

Cummins will make green hydrogen technologies in $47M Chinese joint venture

F3 chat: Hydrogen as a fuel is finding new supporters

Report: Shipping energy mix needs 70% green hydrogen-based fuels by 2050

Cummins gets $5M boost from DOE to advance hydrogen efforts

Image provided by Freightwaves

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.