Europe will have to develop other forms of hydrogen alongside green hydrogen as it transitions to a decarbonised energy system, according to participants speaking at a PE Live webcast organised in association with professional services firm Deloitte today.

Green hydrogen is seen as the most important variety of the fuel because it can be produced without the use of fossil fuels. But it is significantly more expensive to produce than other forms of hydrogen. According to the EU’s own calculations in its hydrogen strategy, green hydrogen costs between €2.5/kg ($2.7/kg) and €5.5/kg depending on the price of electricity, while blue hydrogen costs around €2/kg and grey hydrogen around €1.5/kg.

Stepping stone

Because demand-side sectors need to be incentivised with available production, blue hydrogen may need to be a stepping stone towards a green hydrogen market, according to Helmie Botter, VP for hydrogen business development at energy network operator Gasunie.

“What we are trying to do in Europe is create supply for ourselves” Helmi, Deloitte

 “The aim will be to get to green, but we will need blue hydrogen for the market to develop,” she says.  “What we are aiming for is developing the value chain.” Once this value chain is developed, it is easier for other companies to link up to the existing network.

Grey hydrogen currently constitutes around 96pc of hydrogen production in the EU—around 8.2mn t/yr.

Governments need to start work today on the elements needed for both green and blue hydrogen if they are to add to this level of production and build out infrastructure, according to Tarek Helmi, a partner in Deloitte’s strategy and operations practice.

“There is enough demand for all colours of hydrogen, now is not the right time to be selective,” he says. “We need to start today on both elements.”

But further grey hydrogen production without carbon capture and storage should not be incentivised because it will simply displace emissions within the energy system, according to Andrea Ramirez Ramirez, professor of low-carbon systems and technologies at the Delft University of Technology. “There are certain things in the transition we should not allow—such as grey hydrogen,” she says.

There are two ways of creating blue hydrogen—steam methane reforming (SMR) with CCS, or auto-thermal reforming (ATR) with CCS. Without CCS, both of these technologies can be used to create grey hydrogen. CCS can be retrofitted to grey hydrogen production to turn it into blue hydrogen production. “I do think blue hydrogen can pick up really fast because there’s a retrofitting option,” says Ramirez. “The question is—will it stay in the mix?”

Green hydrogen production will undoubtedly ramp up, but it is unclear whether it will be to the levels required to decarbonise parts of the road transport sector and industry.

Imports

There is also the potential of imports from overseas. The Port of Rotterdam is part of a partnership that wants to import 500,000t/yr of green hydrogen in the form of ammonia. These imports could be competitive with EU production, according to Helmi.

“Europe has started the journey early on, but if you look at the economics of Chile or the Middle East it is going to be very difficult to compete [on cost],” he says. “However it is not just a competition story. What we are trying to do in Europe is create supply for ourselves.”

Helmi estimates that the delivered cost of green hydrogen in Europe could be around €3/kg in the form of ammonia or €5/kg in the form of liquid hydrogen.

The PE Live webcast, Hydrogen development to 2030, is available on demand here. 

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Author: Tom Young