Oil giants have long advocated that the use of hydrogen energy can reduce carbon emissions. Now, they are working hard to achieve this goal, but they still face considerable challenges, especially cost challenges.
Oil giants chase hydrogen projects
International oil giants such as BP, Shell, and Total Energy are investing millions of dollars in hydrogen energy projects, which often have government support. In a world where reliance on fossil fuels is declining, these companies are trying to redefine their role in the future.
Chevron said that hydrogen energy will play an important role in transportation, industrial raw materials and energy storage. On July 16, the company signed a memorandum of understanding with engine manufacturer Cummins to study the commercial feasibility of hydrogen and other alternative energy sources. This memorandum of understanding provides a framework for the initial cooperation between Chevron and Cummins on four main goals. The four main goals are: advancing public policies to promote the use of hydrogen energy as a solution for decarbonization in transportation and industry; establishing a market for commercial vehicles and hydrogen-powered industrial applications; developing hydrogen energy infrastructure for industrial and fuel cell vehicles; Consider using Cummins electrolyzer and fuel cell technology in Chevron's refinery. In April, Chevron and Toyota Motor North America also reached a similar agreement.
According to data from the International Hydrogen Council, as of the end of June, there were 244 large-scale green hydrogen projects planned globally, an increase of more than 50% from the end of January. The agency estimates that tens of billions of dollars of funds have been allocated for hydrogen energy projects worldwide.
The hydrogen energy market has huge potential
In the past, hydrogen was mainly used to make fertilizers and chemicals, but now it has more and more uses, including trucks, airplanes, ships, home heating, and storage of electricity.
bp’s senior vice president of hydrogen energy and carbon capture and storage (CCS) business, Louise Jacobson Plutt said, “Today hydrogen is mainly used as a raw material, and the growth of the hydrogen market is entirely due to it being an energy source.” . bp is exploring the use of hydrogen to replace natural gas in steel, cement and chemical industries, and the use of hydrogen to replace diesel in trucks. bp predicts that if the net zero emission target is to be achieved, the proportion of hydrogen in global energy consumption will rise from less than 1% to 16% by 2050. Like other large oil companies, bp believes that existing technology and infrastructure can help it occupy a larger market share. Last year, the company said it plans to use wind energy to produce hydrogen for a refinery in Germany and hopes to promote the technology on a large scale.
Michael Liebreich, CEO of consulting firm Liebreich Associates, said that attention needs to be paid to where green hydrogen is best deployed. The priority should be in industries that are difficult to reduce emissions, such as fertilizer production, steel, and aviation. If it is possible to use electricity directly, such as home heating, automobiles, etc., the use of green hydrogen is not so reasonable.
Regarding the advantages of switching to hydrogen fuel, one area is under active discussion, and that is long-distance transportation. Recently, Scania, a heavy-duty truck brand under Volkswagen, has reduced hydrogen fuel research and focused on battery research. The company said that hydrogen-fueled trucks require three times as much electricity. Daimler Trucks and Shell agreed to jointly promote trucks using hydrogen fuel cells in Europe and will launch 150 hydrogen fuel filling stations.
Tom Baxter, a visiting professor of chemical engineering at the University of Strathclyde in Scotland, said that "it is still too early to judge the role of hydrogen in aviation and other fields."
Cost challenge is the key
Industry experts said that there are still various obstacles to fully realize the potential of hydrogen energy. First, most hydrogen today is made from fossil fuels, mainly natural gas. The current challenge is how to use renewable energy to produce hydrogen and realize industrial production to reduce costs. In addition, hydrogen is explosive and difficult to store and transport.
bp predicts that Green Hydrogen will not become an important part of the company's business before the 1930s, and it has not yet made a final investment decision on any new hydrogen energy projects. Plutt said, "It takes time to create a market and reduce costs. The hydrogen market is still in its infancy, so the cost is higher."
Shell is still struggling to cope with the high cost of hydrogen energy. Recently, the company launched what is said to be Europe's largest green hydrogen plant to supply its refinery in Germany. But the price of green hydrogen is 5 to 7 times that of hydrogen production from fossil fuels. Industry executives said that the reason why green hydrogen is expensive is because of the cost of electricity required for production and the cost of electrolyzers. Shell hopes to build a hydrogen project in a strategic location next to the customer’s factory to reduce costs. For example, the construction of a hydrogen project near ArcelorMittal’s steel plant in Hamburg, Germany, in addition to supplying hydrogen to the steel plant, it can also provide hydrogen for trucks. fuel.
The US Department of Energy stated that it plans to reduce the cost of green hydrogen by 80% in the next 10 years to US$1 per kilogram, part of which is to support pilot projects.
Consultants and oil company executives have said that the transitional step to achieve large-scale green hydrogen production is to collect and store the carbon dioxide produced by natural gas hydrogen production to reduce emissions, that is, the production of so-called blue hydrogen. Critics of blue hydrogen say that blue hydrogen is achieved by capturing carbon dioxide. This process is very expensive, and the process of extracting and transporting natural gas often leads to greenhouse gas leakage, which means that any hydrogen produced None of them can be zero carbon.