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HOUSTON, March 8 (Reuters) – To attract investment, governments around the world should ease regulations on hydrogen supply and make it less of a fossil fuel in heavy industry. substitute must expand to be competitive enough to do so, energy executives said this week.
Natural burned in heavy industry or shipping gas, hydrogen as a potential alternative to coal or oil is considered key to reducing emissions in industries where electrification is impractical. Hydrogen is often described by color, and many in the industry refer to it as the “renewable rainbow,” but the most important color for executives at the conference was green—as in cash.
Hydrogen can be made in many ways, some cleaner than others. Among the methods that produce what is known as green hydrogen is electrolysis, which uses renewable energy to split water into hydrogen and oxygen. Hydrogen can also be made from natural gas. When carbon emissions from the process are captured and stored, they are known as blue hydrogen.
The industry is still in its infancy and the fuel is relatively expensive to produce, so governments around the world are looking for ways to facilitate rapid development to make it an economic alternative to fossil fuels in the industry.
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USA In the Inflation Reduction Act (IRA) signed by President Joe Biden and Europe Provisions in EU legislation have stimulated hydrogen development, but further clarification is needed and government mandates may be required to encourage industries such as steel and shipping to embrace the hydrogen, energy industry. executives said at the CERAWeek energy conference in Houston this week.
“The market for hydrogen and people’s willingness to pay a premium for low-emission fuels, I don’t think, is fully developed yet,” said Exxon Mobil Corp ( XOM.N ) Chief Executive Darren Woods.
Although the IRA incentivizes the production of green and blue hydrogen, Woods said that the costs associated with it are either Exxon’s partners Europe and said it made it difficult to sell to Asia.
Chevron Corp. Colin Parfitt, vice president of Midstream, said the debate and regulations regarding the classification of hydrogen made from renewable fuels or natural gas should be secondary to making the fuel affordable to consumers.
“There’s a lot of talk about whether it should be blue or green,” Parfitt said. “The challenge is how you make hydrogen as a business.”
Parfitt said that hydrogen transportation is not currently commercially viable and is not convenient for consumers.
Austin Knight, Chevron’s vice president of hydrogen, said that hydrogen transportation technology is still in the early stages of development.
HYDROGEN DEMAND
Maarten Wetselaar, chief executive of Spanish power producer Cepsa SA ( CPF.GQ ), told Reuters that the most obvious and near-term demand for hydrogen is in industries that currently use gray hydrogen, which is derived from fossil fuels. Gray hydrogen is currently consumed by fertilizer, processing and iron and steel units.
According to him, about 30-35% of the total energy system will need hydrogen for decarbonization.
Government mandates are needed to make hydrogen cost competitive with cheaper petroleum-based fuel for industries like shipping, Wetselaar said.
By 2030, Cepsa plans to produce 125,000 tons of green ammonia per year using hydrogen from renewable energy for green marine fuel, and to start exporting green ammonia by 2027. Cepsa could start selling green ammonia to ships by 2026, Wetselaar told Reuters.
Meanwhile, low-carbon hydrogen fuels for transportation need more infrastructure, such as fueling stations, to support and expand the market, Plug Power chief executive Andy Marsh said.
ADDED COMPLICATIONS
John Ketchum, CEO of NextEra, the world’s top renewable energy generator, said green hydrogen could be brought to market quickly with the right production regulations.
NextEra, USA He is working with the Treasury on rules governing what could be considered green hydrogen, he said. The process is complicated by the variability of renewable energy supplies from wind and solar, he said.
He added that if power from these sources declines, the hydrogen-producing electrolyzer will have to switch to grid power, which may or may not be renewable. If hydrogen producers can no longer classify hydrogen as green and have to shut down the electrolysers, the cost of producing the fuel will increase, making it uneconomical. According to him, the solution way use of non-renewable energy with carbon credits compensation will do.
Otherwise, “our money will be a finished product,” he said.
More regulations, certifications and standards are needed, along with supply contracts and new ideas for hydrogen transportation, to access the infrastructure to run on hydrogen, company officials said Wednesday.
Juancho Eekhout, vice president of business development at Sempra Infrastructure, said, “IRA still USAhas not been fully implemented, so from now on we will have to fight with contractual terms and clear standards,” he said.
In addition, hydrogen trading also has complexities that need to be addressed, said Margaux Moore, head of the Energy Transition Research Group at Trafigura.
Depending on how the hydrogen is produced, the fuel has different carbon intensity in different countries, he said.
Reporting by Stephanie Kelly; Additional by David French, Sabrina Valle and Marianna Parraga report; Edited by Simon Webb and David Gregorio
Our standards: Thomson Reuters Trust Principles.
Stephanie Kelly
2023-03-09 04:22:52
Source – reuters
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