Governments must deliver stronger policies to incentivise demand for clean hydrogen in sectors such as road transport and shipping, according to US oil major ExxonMobil.

Current policies can support the “relatively straightforward” decarbonisation of hydrogen that is already in use in industrial applications, Erik Oswald, vice-president of ExxonMobil Low Carbon Solutions, told the World Hydrogen Summit in Rotterdam.

But those existing applications do not represent the new, larger market where suppliers and consumers face greater commercial risk, he says.

“As an investor tries to contemplate whether they build one ATR [autothermal reforming facility] or two ATRs or three ATRs, they are looking out into future markets that have a lot of risk and uncertainty,” he adds. “Will trucking companies switch their fleets to hydrogen; will marine vessels make the switch; will airplanes evolve? I do not think there is enough policy support to enhance the demand and drive those users in the demand space to take that risk.”

“The hydrogen industry is a new industry and it requires a huge investment” Ghareeb, Saudi Arabian energy ministry

As a result of these risks, there is a need for long-term offtake agreements for clean hydrogen to bring certainty to both the supply side and the demand side, according to Zeid al-Ghareeb, general manager of hydrogen and the carbon circular economy at Saudi Arabia’s Ministry of Energy.

“The hydrogen industry is a new industry, and it requires a huge investment. Meaningful offtake agreements will not only help scale up production but also lower the costs for the end-user,” he says, adding that Saudi Arabia is very well-positioned to play a leading role in the industry and become a major clean hydrogen exporter.

This is based on the Kingdom’s low levelised cost of clean hydrogen production as it has one of the highest renewable load factors in the world and plenty of land to develop projects. It also has access to low-cost natural gas and capacity to store CO₂.

Colour-blind strategies

Ghareeb and ExxonMobil’s Oswald both called for a “colour blind”, technology-agnostic approach to clean hydrogen, with a focus instead on the lifecycle emissions and cost of production.

“In terms of low-carbon hydrogen, we should all be colour blind,” Oswald says.

“The bottom line is that we believe it is far more important to focus on the objective of reducing emissions at the lowest cost to society rather than on what colour the hydrogen is. That is why we believe one of the most effective ways for Europe to achieve its net zero targets is to include all types of low-carbon hydrogen in its toolkit,” he adds.

ExxonMobil is developing a large-scale blue hydrogen plant at its Baytown complex in Texas, with a target production of 2,400t/d and transport and storage of up 10mn t/yr CO₂.

“This will create one of the world's largest CCS projects and more than double our industry-leading CO₂ storage capacity,” Oswald says.

In Europe, the company is exploring the use of blue hydrogen in the Southampton industrial cluster in the UK. In France, it is working with Air Liquide on the use of green hydrogen at its Port Jerome refinery complex. In the Netherlands, ExxonMobil is part of the H-vision study to test the potential of large-scale production of blue hydrogen.

Blue hydrogen can be an enabler for scaling up green, especially in terms of infrastructure, according to Jose Miramontes, vice-president of sales at US oil and gas technology company Honeywell UOP.

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Author: Stuart Penson