The Biden administration’s goal of reducing the cost of clean hydrogen by 80pc, to $1/kg, in a decade is “very feasible”, according to Flor de la Cruz, senior research analyst for hydrogen at consultancy Wood Mackenzie.

That is because the US Department of Energy (DOE), which unveiled the goal in its hydrogen “earthshot” in June, includes blue hydrogen in its definition of clean hydrogen. The scheme aims to reduce costs and accelerate breakthroughs in the clean hydrogen sector.

Most recently announced hydrogen policies elsewhere in the world have focused solely on green hydrogen, which is more expensive to produce. Green hydrogen costs about $5/kg, the DOE notes, while Wood Mackenzie puts the US cost at $5-$7/kg.

“Other countries have a very clear strategy, but the US still hasn’t issued that” Cruz, Wood Mackenzie

Most hydrogen is produced with thermal conversion using fossil fuels as a feedstock, typically natural gas, and steam methane reforming (SMR) technology, notes de la Cruz. This ‘grey hydrogen’ costs about $1.50/kg. With carbon capture and storage (CCS), which has yet to be commercialised, that price tag might rise to $2/kg, she says, but costs could fall as CCS technology develops.

The DOE’s goal of '111'—$1 for 1kg of hydrogen in one decade—is therefore feasible because SMR technology is already mature, Cruz says, noting that every refinery in the US that processes natural gas has an SMR plant.

Blue hydrogen’s critical role

Some have criticised the EU’s hydrogen strategy for being too focused on green hydrogen without using blue hydrogen in the near-term to build out transport and distribution infrastructure.

And a recent report from Deloitte found blue hydrogen must play a critical role in establishing a hydrogen economy in the EU.

According to the DOE’s Hydrogen Programme Plan, the department is pursuing hydrogen production using a number of technologies—including carbon capture, utilisation and storage, extracting hydrogen from biomass and waste-stream resources, and splitting water using electrolysis.

On 7 July, the DOE announced $52.5mn in funding for 31 projects to advance next-generation clean hydrogen technologies and support the earthshot programme. These projects focus on bridging technical gaps in hydrogen production, storage, distribution and utilisation technologies—including fuel cells—to hasten decarbonisation of the electricity sector by 2035.

$5/kg – Green hydrogen in US

The funding includes $36mn from the DOE’s Office of Energy Efficiency and Renewable Energy and $16.5mn from its Office of Fossil Energy and Carbon Management.

“These projects will put us one step closer to unlocking the scientific advancements needed to create a strong domestic supply chain and good-paying jobs in the emerging clean hydrogen industry,” says Secretary of Energy Jennifer Granholm.

US hydrogen market lagging

Cruz described the US as lagging compared with other markets globally, although there is strong interest in fuel cell vehicles. But she added federal policy lacked specifics, such as electrolyser installations, volume of production or total funding goals.

“Other countries have a very clear strategy, but the US still has not issued that,” she says.  “We know what you want but you do not say how to get there.” Germany, for example, has committed to 5GW of electrolysers installed by 2030 and €9bn ($10.7bn) of funding, while the EU aims to have 40GW of electrolysers by 2030.

If the $1/kg goal is achieved, the DOE’s reference scenarios that suggest at least a fivefold increase in clean hydrogen use as a result. A US industry estimate shows the potential for a 16pc reduction in CO₂ emissions by 2050 below current levels as well as $140bn in revenues and 700,000 jobs by 2030.

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Author: Ros Davidson