Chevron New Energies was established last year to help the firm achieve its goals of cutting 30mn t CO₂ from its operations by 2028 using renewable fuels, hydrogen and carbon capture, utilisation and storage (CCUS) technologies.

Chevron will aim to grow low-carbon hydrogen production to 150,000t/yr by 2030 to supply industrial, power and heavy-duty transport customers with a mixture of blue and green forms of the fuel. The firm produces 1mn t/yr of grey hydrogen.

Hydrogen Economist talks to Austin Knight, incoming vice-president of hydrogen at Chevron New Energies, about his new role.

Can you describe Chevron’s approach to the transition?

Knight: We believe in the future of lower carbon, and it goes along with our commitment to delivering affordable, reliable and ever-cleaner energy that enables human progress. All three of those aspects are very important. When it comes to the energy transition, we are pragmatic but we are optimistic. We believe this is the right path for the world and energy. And we formed Chevron New Energies to leverage our existing capabilities, the assets we have around the world and our customer base to deliver the solutions for the future.

How will Chevron New Energies help the wider firm transition to a low-carbon economy?

Knight: Chevron New Energies has a double mandate. The first part of the mandate is to lower the carbon footprint of our existing assets and operations around the world, and the second part is to create lower-carbon businesses that go outside of our own boundaries. I think we will see these businesses scale out towards the end of this decade and beyond.

Essentially, when we talk about Chevron New Energies, we are talking about hydrogen, CCUS, offsets, emerging technologies and also other renewable fuels. We are really well-positioned in all of those areas with our existing capabilities to deliver the solutions of the future. We have announced a commitment of $10bn in this space through 2028 to kickstart things.

Are you looking at both green and blue hydrogen?

Knight: There is a place for all forms of hydrogen in what we are doing. I see it as an opportunity to lower carbon intensity. Hydrogen has a role to play in the need to reduce carbon intensity across industry and across energy solutions, and we need to act now, which means more important than what colour you put on the molecule is the overall goal of lowering carbon intensity and ultimately getting to the solutions that deliver that.

What sectors of the economy and geographical regions will you be looking at with the division?

Knight: We are starting in the regions of the world where we already have existing assets, where we operate, and are building from that—it is a good base for us to build from. We are targeting three main sectors: heavy-duty transportation, hard-to-abate industrial activities where hydrogen can be used as an alternative, and power applications.

How important are partnerships in the development of the business?

Knight: Across the value chains, partnerships are really important. We are partnering on the technology side and on the use side of the value chain. What I think is attractive about Chevron's position is that we have a role to play linking that entire value chain together from upstream production capabilities and CCUS capabilities all the way through to supporting the global energy markets down to the end-consumer. What I have seen so far is a huge commitment from industry to collaborate on these things—the whole world is changing very rapidly. And companies such as Chevron bring the capabilities needed to make this a reality.

150,000t/yr – Targeted low-carbon hydrogen production by 2030

We have to work with new technology providers. We have to work with people that can scale infrastructure. We have to work with governments and regulatory bodies to make sure that the policies put in place are supporting early movers, closing the economic gaps that exist, advancing the production and infrastructure and use-cases in a way that does not try to pick technology or sector winners, but benefits the whole sector.

Do you see additional demand for hydrogen starting to materialise yet?

Knight: Demand is starting to materialise in certain areas and longer term it is materialising around a belief in global decarbonisation. It is led by policy support but also consumer sentiment. As different sectors advance in their journey towards lower carbon intensity, that is where we are starting to see the demand pull already in a few places. Heavy-duty transport will lead the way. Shipping will follow. Aviation is at an early stage but there is a lot of development underway that will continue.

How do you see the regional trade in hydrogen developing?

Knight: Hydrogen will play a role in global energy trade in the future because it is a great energy carrier. It is effective in being able to transfer that energy from one location to another. So as the world reduces the carbon intensity of its activities in various geographies, you will need to couple energy sources where that energy is best produced economically to areas that maybe do not have the resources to produce that energy. And that is where we see hydrogen trade in the future.

We see it likely starting with ammonia or liquid organic hydrogen carriers and then possibly as liquid hydrogen in the future as things scale. We see global supply chains developing around the world to support the needs of various economies, and as a global energy company, this is what we know how to do, and why we think we are in a prime position to help make that happen.

---

Author: Tom Young