The simplest and most effective way to incentivise the growth of a hydrogen economy is to put a global price on carbon, according to Air Products CEO Seifi Ghasemi.

Governments should not focus their efforts on stimulating supply, as firms can do that without state support, said Ghasemi at a Cop26 side event.

“Governments should focus their resources on promoting consumption—truck companies, shipping companies, steel companies,” he said. “The most effective way to do that is a controversial thing no-one is talking about—a global carbon tax.”

10,000t/d – Air Products’ hydrogen production

Such a move is not under discussion at Cop26, although China, the EU, South Korea, Switzerland and some regions in the US all have operational emissions trading schemes (ETSs).

Ahead of the signing of the Paris Agreement, some nations raised hopes that these schemes could eventually be joined together to form a global price on carbon. If the EU, China and US schemes were to link up, they would cover around 40pc of global emissions.

But variations in the frameworks of the schemes and the level at which they price carbon has made connecting them difficult.

Only the Swiss ETS has linked to the EU scheme successfully, although the architects of a recently created UK scheme hope to do the same in future.

Grey to blue to green

Ghasemi went on to outline why he believed blue hydrogen had a role to play in the transition to a net-zero world, saying developing blue hydrogen production was cheaper than green in the near-term and allowed firms to decarbonise existing assets.

“We are the largest producer of grey hydrogen, with 10,000t/d,” he said. “We are the leader in grey. Now we want to be the leader in blue and green.”

“For blue hydrogen, the main assets are in place” Bols, Air Products

Air Products is developing blue hydrogen projects in Canada and the US Gulf Coast, and is part of the Neom green hydrogen project in Saudi Arabia.

Speaking at the same event, Ivo Bols, president of Emea for Air Products, re-emphasised the point that adding carbon capture and storage technology to the firm’s existing grey hydrogen assets led to a faster decarbonisation pathway than waiting for long lead times on new green hydrogen projects—many of which will not be producing at commercial scale until the second half of the decade.

“For blue hydrogen, the main assets are in place,” he said. “[Developing them] can alleviate the slow adoption of hydrogen and ensure the required infrastructure is in place when more sources of green hydrogen come to the market.”

Bols called on government to remove as much regulatory risk from hydrogen development as possible. “There are lots of industries that are interested and competent—give them guidance, a roadmap. This will not take all the risk away but it will take the regulatory risk away.”

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Author: Tom Young