BAKU, Azerbaijan, May 25. Blue hydrogen's cost competitiveness may be eroded due to high prices of natural gas, Trend reports with reference to the Global Gas Report 2022 (GGR) released by the International Gas Union (IGU), Snam and Rystad Energy.
The report reveals that hydrogen will be an essential energy carrier in a net-zero energy system and is already being rapidly implemented in a variety of sectors and innovative applications.
Hydrogen production and supply can take many routes within the energy system.
In this report, grey hydrogen refers to fossil fuel-derived hydrogen, while blue hydrogen refers to hydrogen produced from natural gas with the addition of CCUS to remove emissions from the production process. Green hydrogen is used to describe hydrogen produced via electrolysis (splitting water into hydrogen and oxygen) using renewable electricity. Green and blue hydrogen are collectively referred to as zero- and lowcarbon hydrogen.
“Blue hydrogen has been the more economical form of environmentally friendly zero- and low-carbon hydrogen. However, in the near term, blue hydrogen's cost competitiveness may be eroded due to high prices of natural gas, which is a key cost driver of blue hydrogen production. The role of blue hydrogen will be highly dependent on developments in the natural gas market. As the feedstock for blue hydrogen, natural gas supply will be an important ingredient in the hydrogen economy. The rate of penetration of zero- and lowcarbon hydrogen will vary across different sectors depending on its competitiveness against alternatives. Fossil fuels would likely be displaced first in road freight transport and large industrial applications, followed by industrial heating and hard-to-abate sectors e.g., aviation and maritime,” IGU says.
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