Developing a hydrogen economy requires moving beyond debates about colours and encouraging different forms of production, according to US energy secretary Jennifer Granholm.

Speaking at the Hydrogen Americas Summit, Granholm said the US policy—as enacted in the Inflation Reduction Act (IRA)—was to focus on emissions rather than production method.

“It is not about colours; it is about cutting carbon pollution,” she says. “The world might be in a race to unlock hydrogen’s potential, but it is a relay race.”

$3/kg – Maximum PTC available for hydrogen production

The IRA provides a production tax credit (PTC) for $3/kg of hydrogen produced if that process emits less than 0.45kg of CO₂/kg of hydrogen produced. A sliding scale then rewards increasingly smaller incentives to more carbon-intense production. Projects qualifying for the base PTC of $0.60/kg must not exceed 4kg of CO₂/kg of hydrogen produced.

Ensuring the climate integrity of blue hydrogen projects will be absolutely vital, according to Granholm.

“We have to minimise harmful leakage and collaborate on codes and standards,” she says.

Some 52 blue hydrogen projects and 67 green hydrogen projects are being developed in the US, according to Global Energy Infrastructure data.

The DOE’s Hydrogen Shot initiative to cut to cost the cost of green hydrogen production to $1/kg by 2030 is not matched by a similar blue hydrogen initiative. But many other incentives exist, including $8bn in funding for the development of hydrogen hubs—at least some of which are likely to revolve around carbon capture and storage clusters (CCS), making them suitable for blue hydrogen development.   

One of the companies benefiting from this funding is France’s Air Liquide, according to the firm’s North America CEO Adam Peters.

“At Air Liquide, with [Department of Energy] support we are conducting feed studies on full scale CCS to enable low-carbon hydrogen production,” he says. Air Liquide is developing both green and blue hydrogen projects in North America.

Russia’s invasion of Ukraine has not affected as US gas prices as much as it has impacted those in the EU, meaning blue hydrogen costs are still significantly cheaper than those for the green variety of the fuel in the US.

And the provisions of the IRA could even make blue hydrogen competitive with existing production, according to Dan Yankowski, president of chemicals company Linde Gases North America.

“With the incentives you have today blue is comparable—if not slightly cheaper than—grey [hydrogen],” he says.

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Author: Tom Young