There is an ever-stronger global consensus that clean hydrogen solutions will form a vital part of mankind’s transition to a future of sustainable energy. Clean hydrogen can help cut carbon emissions from both transportation and industrial sources. However, the widespread adoption of cleaner hydrogen production isn’t without challenges. In this article we’ll look at three types of hydrogen production – sometimes referred to respectively as “gray,” “blue” and “green” – and some of the factors that affect their adoption.
Today, most hydrogen generated is gray hydrogen, which is produced industrially from natural gas – this is currently the cheapest hydrogen production method. The downside of this process is that it produces significant carbon emissions. That is problematic in terms of environmental effects, but it also has a considerable impact in terms of cost. The current production price of gray hydrogen is around $1.70 per kilogram, primarily driven by the price of natural gas. However, natural gas prices vary around the world, and market-driven price raises in the near future may present challenges. Another important consideration is the costs imposed by carbon emissions trading systems. In the European Union, the price of CO2emissions is in the region $30 per ton, but this could increase to as much as $45 per ton within the decade, potentially increasing the price of gray hydrogen by over 30%.
A cleaner type of production is blue hydrogen, in which carbon emissions are captured and stored or reused. As with gray hydrogen, the price of blue hydrogen is highly dependent upon natural gas prices. However, the cost of carbon capture, utilization and storage (CCUS) is another major factor, with costs in the range of $60 to $80 per ton of CO2. While that puts European blue hydrogen production at a higher cost than gray hydrogen, that could change in the coming years as the cost of carbon emissions increases while CCUS costs are likely to reduce due to innovation and scaling.
The cleanest form of production is green hydrogen, which is produced using renewable energy sources and without carbon emissions. Green hydrogen is produced by electrolysis of water, at an estimated current cost of between $4 and $6 per kilogram. Currently, worldwide electrolysis capacity is both costly and limited, resulting in green hydrogen’s high price compared to other production methods. However, as the technology becomes more widespread, industry analysts expect electrolysis costs to reduce by around 70% over the next decade. The cost of green electricity required for the electrolysis process is also an important factor in the price of green hydrogen, and future efficiencies in solar and wind energy production may also help to bring costs down. One should also note that solar energy is actually not as green as we may think, due to the significant CO2release caused by the production of the photovoltaic panels.
At Clean Energy Enterprises, we believe that the clean hydrogen revolution has already begun, and our own BT Advanced Gasification technologies – which produce green hydrogen directly from biomass – are playing their role in it. While renewable energy costs have come down in recent years, there is still a high cost on the input side of electrolysis. Hydrogen from biomass or waste is of course green if the feedstock is biomass only; it would be considered blue hydrogen if it includes fossil-origin plastic waste. And in both cases, it brings a much lower cost into the production equation. In addition, it is always possible to capture and store the short cycle CO2produced during our transformation process. In that case, we would even be carbon-negative, actually removing CO2from the atmosphere, not merely preventing additional discharge.
Our hydrogen production solution also addresses another major environmental issue: the treatment and remediation of accumulating waste, including plastics that typically do not degrade over time.