Green hydrogen

For a colourless gas, hydrogen gets referred to in very colourful terms. According to the nomenclature used by market research firm Wood Mackenzie, most of the gas that is already widely used as an industrial chemical is either brown, if it’s made through the gasification of coal or lignite; or grey, if it is made through steam methane reformation, which typically uses natural gas as the feedstock. Neither of these processes is exactly carbon-friendly.

A purportedly cleaner option is known as blue hydrogen, where the gas is produced by steam methane reformation but the emissions are curtailed using carbon capture and storage. This process could roughly halve the amount of carbon produced, but it’s still far from emissions-free.

Green hydrogen, in contrast, could almost eliminate emissions by using renewable energy — increasingly abundant and often generated at less-than-ideal times — to power the electrolysis of water.

One of the paths to near-total decarbonization is electrifying the whole energy system and using clean renewable power. But electrifying the entire energy system would be difficult, or at least much more expensive than combining renewable generation with low-carbon fuels. Green hydrogen is one of several potential low-carbon fuels that could take the place of today’s fossil hydrocarbons.

Admittedly, hydrogen is far from ideal as a fuel. Its low density makes it hard to store and move around. And its flammability can be a problem, as a Norwegian hydrogen filling station blast highlighted in June 2019.

But other low-carbon fuels have problems too, not least of which is cost. And since most of them require the production of green hydrogen as a precursor, why not just stick with the original product?

Proponents point out that hydrogen is already widely used by industry, so technical problems relating to storage and transport are not likely to be insurmountable. Plus, the gas is potentially very versatile, with possible applications in areas ranging from heating and long-term energy storage to transportation.

The opportunity for green hydrogen to be applied across a wide range of sectors means there is a correspondingly large number of companies that could benefit from a burgeoning hydrogen fuel economy. Of these, perhaps the most significant are the oil and gas firms that are increasingly facing calls to cut back on fossil fuel production.

Several oil majors are among the players jostling for pole position in green hydrogen development. Shell Nederland, for example, confirmed in May that it had joined forces with energy company Eneco to bid for capacity in the latest Dutch offshore wind tender so that it could create a record-breaking hydrogen cluster in the Netherlands. Days later, BP’s solar developer Lightsource BP revealed that it was mulling the development of an Australian green hydrogen plant powered by 1.5 gigawatts of wind and solar capacity.

Big Oil’s interest in green hydrogen could be critical in getting the fuel through to commercial viability. Cutting the cost of green hydrogen production will require massive investment and massive scale, something the oil majors are uniquely positioned to provide.

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