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Hydrogen – Fuel of the Future

Basic information

Pure hydrogen plays a major role in the journey to net zero carbon, providing decarbonisation solutions in the most challenging parts of the Carbonomics cost curve – including long-haul transport, steel, chemicals, heating and long-term energy storage. The price competition of clean hydrogen is also closely linked to cost deflation and the large-scale development of renewable energy as well as carbon capture, creating three symbiotic pillars of decarbonisation.

Clean hydrogen is gaining strong political and business momentum and is emerging as a major part of government plans such as the European Green Deal. This is why we believe the hydrogen chain deserves real attention after three false starts in the last 50 years. Hydrogen is very versatile, both in production and consumption: it is light, storable, has a high energy content per unit of weight and can be easily produced in the industrial sector. A key challenge is the fact that hydrogen is the lightest element and therefore has a low energy density per unit volume, which simplifies long-range storage. 

Hydrogen in numbers

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A pure hydrogen ecosystem

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Reducing carbon emissions

The path to net zero carbon is likely to consist of two factors: conservation and sequestration . The first of the factors refers to all technologies that enable reductions in gross greenhouse gas emissions, and the second factor refers to natural sinks and carbon capture and storage (CCUS) technologies that reduce net emissions by subtracting carbon from the atmosphere. As part of our analysis, we created the carbon reduction curve for decarbonization shown in Exhibit 13, which shows the cost curve of maintaining GHG emissions relative to current global anthropogenic (i.e., related to human activity) GHG emissions. In this analysis, we included decarbonization technologies that reduce greenhouse gas emissions and are currently available on a commercial scale. We cover nearly 100 different greenhouse gas mitigation technologies across all key sectors worldwide: power generation, industry, transport, buildings and agriculture.

Despite the relatively cheap opportunities for decarbonisation, the cost curve for abatement is very steep as we move beyond the 50% decarbonisation threshold. In addition, we estimate that ∼25% of current global anthropogenic GHG emissions are not indestructible due to currently available technologies,   at prices < 1000 USD/tn CO2eq, requiring technological innovation and breakthroughs to release clean zero carbon potential. Emerging technologies that could meaningfully transform the cost curve of decarbonisation, it is clear to us that hydrogen is currently at the forefront of this technology challenge: based on our analysis, it has the potential to transform 45% of the cost curve (including non-mitigable emissions < $1,000/ tn CO2) and can be attractively positioned in the transport, construction, power generation and industrial sectors.

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Revival of hydrogen in times of climate change

Hydrogen is an element that could help fulfill the full potential of decarbonisation. Hydrogen as a fuel fits attractively among other used fuels due to its low weight (hydrogen is the lightest element) and high energy content per unit weight. Hydrogen's role in energy ecosystems is not new and has a long history in the transport/industrial sector, being used as a fuel since the 18th century to lift airships and in the production of a number of key industrial chemicals relevant today such as ammonia. The IEA estimates that the demand for hydrogen in its pure form is around 70 Mtpa, with most of this demand coming from the oil refining industry (more than 50% of demand for pure H2) and ammonia production for the fertilizer industry (> 40%). If we combine the demand for hydrogen in impure form, the total consumption exceeds 100 Mtpa (source: IRENA).

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A new wave of support and policy action: while hydrogen has experienced several waves of interest over the past 50 years, none have translated into sustainably increased investment and wider adoption in energy systems. However, the recent focus on decarbonisation and the accelerated growth of low-carbon technologies such as renewables. It has sparked a new wave of interest in the properties and expansion of the hydrogen supply chain. Over the past few years, an increased focus on decarbonisation and addressing climate change has begun to translate into renewed policy measures aimed at wider adoption of clean hydrogen. Political support and economic considerations, along with the acceleration of low-cost renewables and electrification infrastructure, appear to be converging to create unprecedented momentum in hydrogen use and pave the way for potentially faster deployment as well as higher investment in hydrogen technologies and the required infrastructure.

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Blue and green hydrogen

Pure hydrogen could be the key missing piece of the puzzle to achieve net zero, connecting two critical components of the decarbonization technology ecosystem: carbon sequestration and clean energy production.

Hydrogen has a number of valuable attributes, two of which make it unique in an era of climate change:

  • its ability to be stored and used as a clean fuel without direct greenhouse gas emissions 

  • a wide range of clean production routes that could be adopted in its production and offer flexibility in supply chains.

Depending on the method of production, there are three types of hydrogen: gray, blue and green. 'Grey' hydrogen, the most demanding form of production, is based on hydrocarbon feedstocks and fuel processes, typically natural gas for steam methane form (SMR) or autothermal reforming (ATR), but also coal gasification. An important factor is that it can benefit from two key technologies in the ecosystem - carbon capture and renewable energy production - namely "blue" and "green" hydrogen. "Blue" hydrogen refers to the conventional natural gas-based hydrogen production process (SMR or ATR) coupled with carbon capture, while "green" hydrogen refers to the production of hydrogen by electrolysis of water, where electricity is obtained from zero-carbon (renewable) energies.

Today, more than 75% of hydrogen is produced from natural gas, the rest mainly from coal. Less than about 2% of hydrogen production is currently produced by electrolysis, which is the least carbon-intensive way of hydrogen production (according to the IEA). Hydrogen production via low-carbon electricity is not currently carried out on a large commercial scale and still exhibits a wide range of variability, including capital expenditure requirements associated with electrolysers, operating time, conversion efficiency and most importantly, electricity costs. In our view, this is a key area in the decarbonisation debate that calls for innovation and technological progress that could potentially unlock a 'green' opportunity for hydrogen expansion. 

  • "Blue" hydrogen and its essential role of sequestration in supporting the transition to low-carbon hydrogen in the medium term. "Blue" hydrogen is produced from natural gas by either steam-methane reforming (SMR) or autothermal reforming (ATR). The production of "blue" hydrogen for decarbonization offers several advantages in the near to medium term, as it utilizes currently large-scale commercial production pathways and infrastructure, with approximately 75% of global hydrogen production relying on natural gas.

The most widespread method of hydrogen production is natural gas-based steam-methane reforming, a process that uses water (steam) as an oxidant and source of hydrogen. Natural gas in SMR acts as a fuel, as well as a raw material. Typical process steps include:

  1. raw material pretreatment unit (desulfurization), where sulfur and chlorine are removed from the natural gas raw material

  2. the stream then enters steam-methane reforming, where natural gas is combined with pressurized steam to form syngas (a mixture of carbon monoxide and hydrogen)

  3. the syngas output stream, which consists mostly of carbon monoxide and hydrogen, undergoes "water gas conversion" where the carbon monoxide and water react with a catalyst to produce carbon dioxide and more hydrogen

  4. the final process step removes carbon dioxide and other impurities from the hydrogen stream, increasing its purity in the so-called "pressure-swing adsorption" (PSA).

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An alternative process to SMR is the partial oxidation process (using oxygen as an oxidant), but more typically a combination of both processes is used – known as autothermal reforming (ATR). According to industry studies, the adoption of CCUS technologies in SMR and ATR plants for hydrogen production can lead to an overall reduction of carbon emissions of approximately 90%. A schematic of a typical SMR process with CCUS is shown in Exhibit 16, showing three potential carbon capture sites (SMR flue gas, displaced syngas, and PSA tail gas), with the SMR flue gas being the stream with the highest CO2 concentration and highest carbon capture potential.

The expansion of "blue" hydrogen depends only on the wider adoption and integration of carbon capture-use-and-storage technologies, reminiscent of the incremental cost of producing "blue" versus "grey".  Sequestration is likely to play a critical role in helping decarbonisation efforts, particularly in sectors that are more difficult to reduce, and in achieving net zero human-related emissions. There are currently 20 large CCS facilities operating worldwide (mainly in the US, Canada and Norway) with a total capacity exceeding 35 Mtpa. Notably, in recent years, more and more projects in the development phase have focused on lower CO2 industries such as industrial plants and coal and gas-fired power plants.

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  • "Green" hydrogen: the ultimate decarbonisation tool with great long-term potential. "Green" hydrogen is typically produced through water electrolysis, an electrochemical process in which water is split into hydrogen and oxygen. Dedicated electrolysis to produce "green" hydrogen remains a very narrowly defined part of global hydrogen production, but as the cost of electricity from renewable sources continues to fall, interest is growing. The key underlying technology for green hydrogen production is the electrolyzer, and there are three distinct types: alkaline electrolysis, proton exchange membrane (PEM) electrolysis, and solid oxide electrolysis (SOEC).

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The most widespread and advanced technology is alkaline electrolysis, characterized by relatively low electrolyser capital costs (fewer precious metals typically used compared to other electrolysis technologies) and relatively high efficiency - typically ranging from 55% to 70%. The reaction takes place in a solution composed of water and a liquid electrolyte (typically potassium hydroxide) between two electrodes. When sufficient voltage is applied between the electrodes, the oppositely charged ions (OH- and H+) are attracted to the oppositely charged electrodes. The anode accumulates water (through a combination of OH- ions) while the cathode provides hydrogen.

PEM electrolysis is based on the principle of using pure water as the electrolyte solution and therefore overcomes some of the problems associated with hydroxide solutions (used for alkaline electrolysis), while also being more compact, operating at higher pressures and therefore having the ability to provide highly compressed hydrogen. The process involves the use of a solid polymer membrane. When a voltage is applied between the two electrodes, the oxygen in the water molecules creates protons, electrons, and O2 at the anode, while the positively charged hydrogen ions travel through the proton-conducting polymer toward the cathode, where they combine to form hydrogen (H2). An electrolyte and two electrodes are sandwiched between two bipolar plates, whose role is to transport water to the plates, transport product gases away from the cell, conduct electricity, and circulate coolant to cool the process. Despite their manufacturing advantages over traditional alkaline electrolysis (outlined above), they typically require the use of expensive electrode catalyst materials (such as platinum and iridium) and membrane materials, resulting in higher overall costs, and as such have seen less widespread adoption compared to alkaline electrolyzers.

A third type of electrolysis technology is SOECs, a technology that is still much less widespread and has not yet reached large-scale commercialization. In principle, ceramics are used here as the electrolyte and operate at very high temperatures (>500 °C) where they can potentially reach >70% efficiency. The manufacturing cost analysis that follows focuses on the two primary types of electrolysis (alkaline and PEM) that are the most widely used on a commercial scale.

Manufacturing cost analysis leads us to believe that "blue" is likely to be the primary route in the near to medium term until "green" reaches cost parity.

While "blue" and "green" hydrogen are the least carbon-intensive ways to produce hydrogen, both technologies are more expensive compared to traditional hydrocarbon-based "grey" hydrogen production, based on our analysis of hydrogen production costs. For "blue" hydrogen, production costs depend on a number of technological and economic factors, the most critical factor being the price of natural gas, followed by the additional cost of integrating carbon capture technology with the JMK plant. According to our estimates, the cost of producing "blue" hydrogen from SMR natural gas is approx. $0.6/kg H2, higher than traditional SMR without carbon capture. For "green" hydrogen, the production costs are primarily related to the investment costs of the electrolyzer, the conversion efficiency of the electrolyzer, the load hours and above all the electricity costs, which make up approx. 30-65% of the total cost of production depending on the cost of electricity (LCOE).

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Overall, we estimate that green hydrogen production costs can be 1.3-5.5x higher than blue hydrogen, depending on the price of natural gas and LCOE. This leads us to conclude that both "blue" and "green" hydrogen will form key pillars of the transition to a low-carbon economy, but "blue" will facilitate the transition in the short and medium term until "green" reaches cost parity in the long term. In Exhibit 23, we show our estimates of hydrogen production costs (using the simplest, cheapest, and most widespread alkaline electrolysis) for different cost of electricity (LCOE) and for different electrolyzer efficiencies. Overall, this means that the cost of electricity needed to bring "green" hydrogen to price parity with expensive "blue" hydrogen must be on the order of $5-25/MWh LCOE, assuming the electrolyser and carbon capture technology capital costs remain at current levels (only electricity costs vary along "green" hydrogen lines and natural gas costs vary along "blue" hydrogen lines).

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In addition to electrolyzer efficiency and cost of electricity (LCOE), the operating time of the electrolyzer at full load can also have a significant impact on the overall cost of hydrogen production. Exhibit 27 and Exhibit 28 show the estimated change in hydrogen production costs with full load hours for an alkaline and a PEM electrolyzer, respectively. The graphs show that at full load > 5,000 (representing 57% of the total annual hours of operation at full capacity) the production cost curve flattens and production costs are no longer significantly affected by full load hours. On the other hand, manufacturing costs show a linear correlation with electrolyser capex for both alkaline and PEM electrolysers, as shown in Exhibit 29 and Exhibit 30. It is worth noting that implied electrolyser costs have the potential to decrease when using larger multi-stack systems that they involve combining several electrolyzers together, thereby increasing the total capacity of the system and reducing the investment part of the cost. This, along with technological innovation and economies of scale, is one of the key potential areas of cost reduction.

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The hydrogen supply chain

Safe and cost-effective transportation, as well as storage and distribution of hydrogen will be critical to setting the pace and its widespread deployment. The fuel's low energy density in ambient conditions and its high diffusivity in some materials, including types of steel and iron pipes, as well as its highly flammable nature, represent important technological and infrastructural challenges for its wide application in transport and heating. We therefore believe that its initial acceleration and use is likely to be more locally concentrated (hydrogen nodes), while the development of a large-scale globally integrated value chain is likely to be more challenging and take longer to realize.

  • Storage: Hydrogen is currently primarily stored in gaseous or liquid form in storage tanks. Compressed hydrogen has less than one-fifth the energy density of gasoline, so storing an equivalent amount of energy requires many times the space (challenging gas station storage). Ammonia offers a liquid alternative for hydrogen storage (ammonia is formed from hydrogen combined with nitrogen through a reversible reaction). The need for large-capacity storage solutions that enable long-term storage is increasingly important for hydrogen to become more widely used, including storage at gas stations, export terminals and energy storage for electricity generation. Geological repositories such as salt caverns, depleted oil and gas fields, and aquifers could be potential longer-term hydrogen storage options.

  • Long-distance transport: Transport of hydrogen over long distances usually occurs in four different forms: hydrogen, ammonia, liquid organic hydrogen carriers (LOHCs such as toluene), and liquefied hydrogen. The existing infrastructure of the natural gas pipeline system could be used to transport hydrogen locally or domestically, especially if the pipeline material is polyethylene. Alternatively, low-dose hydrogen blending (typically <10% by volume for most regions) is used today, although the upper limit is limited by grid-connected equipment. Shipping could be a potential solution in the long term, but due to the very low liquefaction point of hydrogen (-250°C), technological innovation is necessary to increase feasibility. Ammonia and LOHCs (such as toluene) for hydrogen transport by ship are the preferred options to consider in this regard, according to industry players, as they do not require cryogenic conditions for liquefaction or handling and are some of the commonly used methods for long-haul transport today .

  • Local distribution: Pipelines are commonly used for local distribution of hydrogen. However, the characteristic properties of hydrogen require low-pressure distribution pipes made of polyethylene or fiber-reinforced polymers. Blending hydrogen into existing gas infrastructure is currently being tested in several countries around the world, even beyond the current upper limit of 5-6%. New dedicated distribution pipelines are likely to be a physical infrastructure challenge. Trucks carrying compressed hydrogen are currently also being used as a solution for local distribution over shorter distances

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A big opportunity for hydrogen

Hydrogen has a complex chain with several transportation and storage challenges that need to be overcome for widespread adoption. This means that the upside towards net zero could be significant, we estimate that more than half of the ~25% of non-destructive emissions < $1,000/tonne carbon prices could be released due to its versatility to serve as a clean energy fuel alternative for industries. Energy storage solutions for long-distance transport (fuel cell electric vehicles, aviation, shipping) and for heating and seasonal fluctuations in energy demand, enabling higher penetration of renewables. The potential decarbonisation opportunities that could be unlocked by the development of hydrogen technologies and the supply chain are shown in Exhibit 32.

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Power generation: The key to solving the seasonal energy storage problem

We believe that to achieve full decarbonisation of energy markets, both batteries and hydrogen will play a larger and complementary role in solving different challenges. While batteries are currently the most developed technology for intraday energy storage, we see them as mostly irrelevant for seasonal storage and see hydrogen as a potential candidate to address this challenge.

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To achieve 100% carbon-free energy production, technological breakthroughs in energy storage are needed. We believe that both batteries and hydrogen can play a role when it comes to energy storage, and we expect that battery deployment will primarily focus on intraday storage, while hydrogen could potentially meet the need for seasonal storage.

Battery technology and its development play a key role in helping to decarbonize transport and energy production. The heavy focus on electric batteries over the past decade has helped drive down battery costs by more than 50% in the last five years alone, thanks to the rapid expansion of battery production for personal electric vehicles (EVs), and lithium-ion batteries continue to be the most widely used type. However, this technology is currently not readily available on a large commercial scale for long-haul trucking, shipping, and aviation, or for long-term battery storage for renewable energy sources. 

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The batteries are particularly suitable for sunny climates (eg Southern Spain/Italy, California, Middle East) where solar PV production is largely stable throughout the year and can be stored for evening use for up to 4-6 hours. Contrary to the strong projections of many industry consultants, we do not see batteries fully bridging the gap in energy production to net zero. Our analysis assumes approx. 80 GW of storage by 2050 (well below BNEF estimates), or approx. 5% of the installed RES base in Europe by then.

In Exhibit 37, we analyze the case of different battery cost scenarios (price of a full battery) for electric vehicles, including trucks, and for manufacturing energy storage. This shows the high sensitivity of the shape of the cost curve to battery costs, suggesting that battery technology has the potential to transform the transport-dominated higher end of the decarbonisation cost spectrum. Lower battery costs for passenger electric cars, both rural and urban, as well as for trucks, can have a significant impact on reducing the overall cost of decarbonisation. However, in our view, battery technology in its current design is unlikely to offer a solution to the decarbonisation of aviation, shipping and seasonal fluctuations in energy demand, with hydrogen playing a key role in these areas.

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Potential opportunity for hydrogen in seasonal storage. Hydrogen could potentially be used for energy storage and flexible power generation. The process involves storing "green" hydrogen and turning it back into energy using fuel cells to balance the seasonal mismatch between energy demand and renewable power. Fuel cells have an efficiency that is typically in the 50-60% range. This is generally a weakness of hydrogen-based storage options, as they suffer from low life-cycle energy efficiency. The overall energy efficiency of hydrogen used for local distribution and on-site use is in the range of 25-40% based on our analysis, compared to battery electric storage of around 70-90%.

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If Europe were to meet 10% of its energy needs from hydrogen/fuel cells in the long term, it is estimated that global hydrogen demand could increase by 25% to 30%, while full decarbonisation of hydrogen production would mean about 900 TWh of incremental electricity demand, equivalent to the current demand of France and Germany combined.

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Transport : A unique opportunity for the decarbonisation of long-distance transport

The key properties of hydrogen (low weight and high energy per unit weight, short refueling time, zero direct emissions when obtained from renewable energy sources) make it an attractive candidate as a transport fuel. Hydrogen can be used in its pure form in fuel cell electric vehicles (FCEVs), but also, as Exhibit 31 and Exhibit 47 show, it can also be converted into hydrogen-based fuels including synthetic methane, methanol, and ammonia in a process commonly known as “power -to-liquid", potentially applicable to aviation and shipping, where the use of direct hydrogen or electricity is particularly challenging.

For all hydrogen factors, the volumetric requirement for on-board storage, along with the relatively low overall well-to-wheel efficiency, remain the two key challenges for hydrogen use. Hydrogen has some unique properties that make it attractive as a fuel, for example it has > 2.5x higher energy density per unit mass compared to conventional fossil fuels. Compressed hydrogen is used for road transport (including light freight, but also buses, trucks and trains), with the vast majority of fuel cell electric vehicles deployed being passenger vehicles. Japan, the US, the EU and South Korea lead the current fleet of FCEVs, but many other countries have recently set targets for hydrogen adoption in mobility (Exhibit 45).

Exhibit 40 shows that for a fully loaded (or fully charged) average passenger vehicle, compressed hydrogen FCEVs perform attractively compared to Li-battery EVs on a weight-per-unit-energy (tank-to-wheel) basis. Similarly, hydrogen in compressed form results in FCEVs attractively projecting volume per unit of energy output compared to EVs. In terms of cost (USD) per unit of energy output, that is more than double the cost of equivalent EVs and ICE gasoline passenger cars. The cost per unit of energy output for FCEVs becomes more competitive when considering long-haul heavy-duty transport, as their long range means less frequent refueling and large-capacity (>300 kWh) batteries in EVs remain expensive. This makes FCEVs attractive for long-distance transport such as buses and trucks. For the purposes of this analysis, we consider the weight and volume of the system that stores and converts input energy into output energy for all three types of vehicles. This includes internal combustion engine components and gasoline tanks for ICE passenger vehicles, Li-battery for EVs, fuel cell and compressed hydrogen tank for FCEVs.

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On a well-to-wheel basis, a key challenge for hydrogen remains its low overall energy efficiency, as shown in Exhibit 44, with local distribution of compressed hydrogen having an overall well-to-wheel efficiency of 25-40%, reducing to 15 -30% for liquefied hydrogen or 25-35% for liquid organic hydrogen carriers and ammonia due to additional liquefaction/gasification and conversion/reconversion steps required. This is comparable to c. 70-90% efficiency for electric cars.

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The rail industry and the hydrogen opportunity

Despite the fact that the rail industry is already a pioneer in Europe's energy transformation (causing only 0.1% of total greenhouse gas emissions), around 20% of rail traffic and 40% of the network is still in diesel mode. In this context, we believe that hydrogen trains will help to further reduce emissions and noise levels caused by this industry. Fuel cell hydrogen (FCH) trains have become a focus of rail OEMs in recent years. While tests of the FCH technology began as early as 2005, the first commercial trains were introduced in 2016 by Alstom and entered service in Germany in 2018. While they are still in early development and according to Alstom, costs are more than 25% higher. The ecological, technical and economic profile makes hydrogen trains attractive as a replacement for the diesel fleet. According to the Fuel Cell and Hydrogen Joint Undertaking (FCH JU) and the Shift2Rail Joint Undertaking (S2R JU), this technology could produce up to 20% of new European trains by 2030, replacing 30% of diesel trains.


What are the main advantages of trains powered by hydrogen?

1. Environmental profile , as hydrogen trains are able to provide performance with zero emissions and lower noise levels as well as air pollution. Remarkably, the green appeal does not seem to come at the expense of technical performance and is instead linked to the flexibility of diesel trains. For example, hydrogen trains can be refueled in less than 20 minutes, run for up to 18 hours without refueling and travel up to 1,000 km at a top speed of c180 km/h.

2. Life cycle cost effectiveness . The price profile varies for the main applications (Multiple Units, Shunter, Locomotive), with Multiple Units currently considered by Alstom to be the most viable option. Its total cost of ownership is estimated to be 3% lower than catenary electrification and 6% higher than diesel trains in 2022, corresponding to a cost premium of approx. EUR 0.5/km. To reduce total cost of ownership, there are opportunities on both the opex (cost of electricity) and capex (economies of scale) sides.


Demand for hydrogen currently dominates industrial sectors, including petroleum refining, ammonia production, methanol production, and steelmaking through direct iron ore reduction (DIR). In the context of decarbonisation, pure hydrogen (either 'green' or 'blue' through upgrading CCUS across industrial plants) could be used as a fuel (providing the high-temperature heat required in industrial plants) or a feedstock to aid in the clean production of its end products and associated decarbonisation processes. One of the key industrial applications of pure hydrogen that has recently attracted industry interest is the production of net-zero carbon steel to help meet the growing global demand for lower-emission steel.

Fuels and raw materials based on synthetic hydrogen

Accelerated large-scale deployment of hydrogen could materialize based on its ability to form ammonia and other liquid organic hydrogen carriers (LOHCs), but also its ability to combine with CO2/CO to form synthetic hydrocarbons/liquid fuels such as synthetic methanol (diesel and jet fuel). In our view, the first option (the ability to form ammonia and LOHC) has the potential to increase the rate of hydrogen uptake by aiding storage and transport (liquid ammonia has a higher bulk density than liquid hydrogen and can be liquefied at a higher temperature - 33 °C than hydrogen at - 253 °C and methane at -160 °C, while the latter (the ability to fuse with CO2/CO) functions as a way to utilize CO2 with a wide range of applications.Some hydrogen-based synthetic feedbacks and fuels developed so far include:

  • Synthetic Methane: This is the most commonly produced hydrogen-based synthetic fuel and the production route involves a methanation process (mostly catalytic, but biological routes are also possible) which uses a direct reaction between hydrogen and CO2 to produce methane, with water being the main source. byproduct of the reaction.

  • Synthetic methanol: Methanol has about 80% higher energy density than hydrogen and its production route from synthesis gas (via hydrogen) is well developed commercially. The first CO2 to methanol plant, known as the George Olah Renewable Methane Plant, is located in Iceland and was commissioned in 2012 with a capacity of 1,000 tpa of methanol before being expanded to 4,000 tpa in 2015. The initial CO2 is captured from nearby power plants, while hydrogen is produced by electrolysis and used for direct hydrogenation of captured CO2. The "Vulcanol" product is then sold for use as a gasoline additive and feedstock for biodiesel production.

  • Synthetic diesel, kerosene and other fuels: Synthetic diesel or kerosene is the result of a reaction between carbon monoxide (CO) and hydrogen. Carbon monoxide can be obtained from captured CO2, with the resulting syngas, CO2, and hydrogen converted to synthetic fuels via Fischer Tropsch synthesis.

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Source: Goldman Sachs

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