Hydrogen: Momentum More Important Than Hue

Building infrastructure and achieving scale is more important for the development of hydrogen as a low-carbon energy source than debating whether that hydrogen should be "blue" or "green," experts told the recent Energy Intelligence Forum.

Saudi Aramco's Chief Technology Officer Ahmad al-Khowaiter told the Forum that the industry should focus on producing "low-carbon energy at low cost.”

"To kick-start the market it is critical that we have a minimum scale to create the pipelines needed to lower the cost of transport, and create the ships," he said.

Scale can be attained by extracting hydrogen from hydrocarbons "because we already have the facilities and technology," al-Khowaiter said.

Hydrogen made from fossil fuels without capturing the resulting carbon dioxide emissions is called "grey," but if the emissions are captured, it is called "blue."

"Green" hydrogen — preferred by environmentalists and some policymakers — uses renewable power to extract hydrogen from water in a carbon-free process.

Grey-to-Blue-to-Green

Air Products CEO Seifi Ghasemi told the Forum that grey and blue hydrogen could play a useful role in a gradual transition toward green hydrogen.

"It is totally impractical to think that we can get to green hydrogen for all our energy uses in the next 10 or 15 years, so it is better to make blue than grey hydrogen because at least you capture the carbon dioxide," he said.

Ghasemi also said that progress toward developing hydrogen as a commercially viable source of energy might happen "faster than we think."

Satoshi Asawa, Vice President of Upstream Oil & Gas at Japan's Jogmec, said abundance and cost are the primary considerations for energy-importing countries.

"From the perspective of consuming countries ... abundant and low-cost energy resources would be more required rather than colors," he told the Forum.

Japan has pledged to become a carbon-neutral country by 2050 but it is at a natural disadvantage when it comes to solar or wind power, which has prompted it to look at ammonia and blue hydrogen to rein in its emissions, Asawa said.

Ammonia can be used both directly as a carbon-free fuel or as a vehicle for storing hydrogen.

The European Approach

"In Germany and the Netherlands, we have projects that are more focused on green hydrogen enabled by the integration with renewable power," Louise Jacobsen Plutt, BP's head of hydrogen and carbon capture, told the Forum.

"In places like the UK, the policy and strategy are geared more towards a combination of both," she said.

"It is really about picking the best solution for the area based on what the customer wants and government support and then deploying those technologies," she added.

Northeast Asia's Potential

Aramco already supplies the bulk of its crude oil to customers in Northeast Asia and views that region as a natural market for future hydrogen sales.

"We believe we will continue to supply energy but in a low-carbon form, to Japan and [South] Korea. Perhaps also China," al-Khowaiter said.

He sees demand emerging across the board, from transport and power generation to petrochemicals.

"Given the [limited] renewable energy capacity in Northeast Asia, it will probably not be able to cover its full needs and it will have to supplement with maybe alternative energies that might be hydrogen-based," he said.

Al-Khowaiter made similar comments earlier this year about Japan and South Korea probably emerging as the first major markets for hydrogen in the coming decade.

Aramco has already shipped blue ammonia to Japan, and last year it signed a deal with Air Products and Acwa Power for the development of a $5 billion green ammonia plant in Saudi Arabia.