H2Tech Market Data 2023 - 47

The levelized cost of blue H2
depends on the production
pathway and the CCU/CCS technology employed. SMR is
the most common production technology-with post-combustion
retrofits to capture 99% of CO2
H2. For most greenfield applications, the cost of CO2
-to produce blue
makes
SMR more expensive than ATR. ATR can be more cost effective
than SMR but requires extensive pre-treatment of feed
resulting in a substantial investment. Also, the fired heater
produces CO2
to produce blue H2
that requires pre-combustion carbon capture
. The POX process is a good upcoming
alternative. For example, a Shell licensed process for blue H2
with POX and solvent-based post-combustion CCS produces
blue H2
with cost parity against gray H2
(FIG. 5).
Even with the higher capital costs of retrofitting SMR
for CCS/CCUS blue H2
will be competitive vs. gray H2
policy support and carbon prices of $25/t CO2
The relative capital investment for blue H2
16%-25% higher than that for gray H2
with
.
-$35/t CO2
is between
and therefore
requires policy support to bridge this gap and incentivize
investments in blue H2
. Most of the blue H2
projects are
SMR- or ATR-based, while POX technology is slowly developing
interest. Without a positive nudge from policy and
drastic technological development driving down the cost
of CCUS, there is limited scope for improving the cost of
blue H2
production.
cost for blue H2
cost of blue H2
The crisis in Ukraine is also expected to impact the
, especially in the short term. The overall
depends on the cost of feedstock (natural
gas), capital expenditures on SMR/ATR or POX retrofits
for enabling CCUS, the cost of CCUS, the availability of
CO2
has risen
storage or utilization potential, and policies and regulations.
The overall cost of fossil-based gray H2
by 70%, increasing from $8/kg to $12/kg-$15/kg since the
Russian invasion of Ukraine (with the rising cost of natural
gas). Because the cost of blue H2
cost of gray H2
, the feasibility of blue H2
is linked to the baseline
being cost competitive
will decline during this time. As the EU pushes for
energy security in the region, it intends to turn all blue H2
projects green and has announced an additional €300 MM
in funding for the development of green H2
erator initiative). The long-term future of blue H2
appears uncertain. If green H2
(i.e., H2 accelalso
production
can be scaled
as planned (10 MMtpy by 2030) and the levelized cost of
green H2
decreases to $1.5/kg or less, it will succeed and
deliver as a permanent critical part of the energy mix.
CCUS/CCS. CCUS consists of separating CO2
from a
mixture via physical or chemical means. CCUS is an easy
and effective pathway to decarbonize existing production
capacities and operation with retrofits and function as an
enabler of large-scale dispatchable H2
production. CCUS
offers a method to scale up relatively mature processes and
utilize them to produce blue H2
the cost of blue H2
CCUS technology employed, the availability of CO2
. The cost of CCUS impacts
and is largely driven by the choice of
storage
(location and utilization opportunities as feedstock served
back to the refinery system), and government policies and
carbon contracts of carbon tax/pricing offered.
Fuel cells and fuel cell electric vehicles (FCEVs). Fuel
cells are devices that generate electricity from H2
and oxygen,
while producing only water as a byproduct and no CO2
or GHG emissions. Fuel cells employ a catalyst for splitting
H2
into protons and electrons, a selectively permeable PEM
as an electrolyte to conduct ions, and two conducting electrodes
usually housed in a module called a stack. Fuel cells
convert chemical potential energy directly into electrical
energy-avoiding a thermal bottleneck-and are therefore
inherently more efficient than combustion engines; provide
the environmental advantage of not needing combustion
products and the associated emissions; and have fewer
moving parts and a lower maintenance requirement. When
H2
is generated from renewable electricity (e.g., solar, wind
or hydropower), the result is a completely decarbonized
and renewable fuel with zero emissions.
The global fuel cell market size was valued at $3 B in
FIG. 5. Relative CO2 intensity and cost of gray and blue H2
via SMR with pre- and post-combustion capture, and blue H2
gas POX and pre-combustion capture solvent technologies. Source: Shell.
via
2020-2022 and is expected to grow at a CAGR of 23.4%
to reach $21.7 B by 2030. This market increase is driven by
47
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H2Tech Market Data 2023

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