Introduction

Blue hydrogen is not the most environmentally sustainable alternative fuel, but its commercial viability, relatively smooth production cycle, and easy synchronization into existing technology has made it a favourite.

Amid the global scramble for new sources of clean fuels, the government announced the National Hydrogen Mission in August 2021. Blue Hydrogen is generating lots of interest among Indian industries and Government authorities. A study on why this latest version of hydrogen is generating interest among Indian industries and policymakers has to be studied viz-a –viz what the environmental impact will be, and how the size of the renewable energy payoff will be with this new version of the fuel.

What is clean hydrogen?

Hydrogen is the cleanest-known form of fuel. It is zero-carbon, and when burned with oxygen, provides the same function as petrol or diesel at much low levels of pollution. Hydrogen fuel-based internal combustion engines can be used to run all kinds of vehicles. It is expected to be used in lieu of aviation turbine fuel in a few years while it is planned to use clean hydrogen in spacecraft propulsion.

Over the past few years, nations have increasingly turned to it due to its potential to displace fossil fuels in heavily polluting sectors that solar and wind cannot effectively target. Interest in the developing technology has also peaked as countries commit to aggressive decarbonisation targets, which invariably include plans to phase out diesel and petrol vehicles, oil-run power plants, and even conventional public transport systems.

So far, much of the focus and the bulk of the hydrogen market has been commanded by green hydrogen, which is produced from renewable energy sources such as solar or wind power, or low carbon power and is known to be the benchmark for clean fuel. Water is split into two hydrogen atoms and one oxygen atom through a process called electrolysis. However, on a commercial scale, it is mostly generated by steam reforming of natural gas.

What is the situation globally?

As with any potentially game-changing technology, countries across the globe have gotten into the race to establish hydrogen production and domestic hydrogen markets which can be summarized as below

• European countries Switch truck fleets completely to Hydrogen based.
• Netherlands Commercial production of hydrogen trucks.
• Switzerland Commercial production of hydrogen trucks.
• Japan Plans to set up 10000 hydrogen refueling stations in the next decade.
• China's Production of 1 million fuel cell vehicles by 2030, and developed hydrogen fuel cell hybrid locomotives along with a subsidy policy for their promotion.
• Australia, Russia, US Announced projects to tap the fuel.

What exactly is blue hydrogen and how is it different from other forms of hydrogen?

Apart from green, hydrogen can also be yellow, turquoise, pink or blue, depending on the production method. Essentially colour codes, these various types of hydrogen vary in their energy payload.

Grey hydrogen Most common form, generated from natural gas or methane by steam reforming Pink hydrogen Nuclear power.

Blue hydrogen From natural gas by steam methane reforming, whereby natural gas is mixed with hot steam and a catalyst.

Studies have shown that greenhouse gas emissions from the production of blue hydrogen are quite high, particularly due to the release of fugitive methane. Incidentally, methane is known to be a major destroyer of the ozone layer, Earth’s protective shield that stops radioactive ultraviolet rays from the sun from reaching the surface.

However, it is pegged to be the most commercially viable as production is relatively easier, does not suffer from input shocks, and can be adapted to the technology already available with petroleum refineries, chemical production units and other industries.

Overall, hydrogen production suffers from high transportation and storage cost, and leads to higher pricing. As a result, all visions of large hydrogen production mandates that it be co-located on or near-site. For this reason, blue hydrogen has also elicited industry interest.

How has blue hydrogen been received in India?

The overall Indian hydrogen market was valued at $50 million in 2017, and is projected to reach $81 million by 2025, growing at a compound annual growth rate of 6.3 percent from 2018 to 2025, according to Allied Market Research. The Centre’s ambitious National Hydrogen Mission focuses on green hydrogen production and utilisation, and aims to align India’s efforts with global best practices in technology, policy and regulation.

However, as carbon emission reduction goals prove to be a challenge, the government has indicated that it may be open to the production of hydrogen through other means as well. It has priced the hydrogen at $1.20-1.50 per kg.

How will it reduce energy imports?

According to official statistics, India currently spends over INR 12 lakh Crores on energy imports, of which crude oil and allied products make up INR 7.45 lakh Crores. The government has set a target to become energy independent by the time of India’s 100th Independence Day, over the next 25 years.

While most government incentives for domestic energy production have revolved around solar and wind power generation, it is currently planning to provide production-linked incentives for hydrogen producers as well. Converting smaller coal-fired power plants into hydrogen-fuelled plants has also reportedly been suggested.

Officials say the large scale switch to green hydrogen would take time as domestic energy producers’ shift from liquefied petroleum gas to hydrogen. For this, blue hydrogen would act as a necessary step.

Green Hydrogen vs Blue Hydrogen

Green hydrogen is the fuel of the future and he intends to export it to the whole world. Lab testing of Toyota car fuelled by Green Hydrogen is in process. Green hydrogen is seen as a potential catalyst of the world’s shift to sustainable energy and net zero emissions to tame global warming and climate change. Green hydrogen is produced by splitting water into hydrogen and oxygen using renewable electricity.

The goal is to move towards green hydrogen. The main idea is to make it from sewage and toilet water and it can be made using solar and wind power at low cost.

India is making imports of crude oil, gas, and petroleum of INR 7-8 lakh Crores at present. But India wants to replace it with alternative fuels like ethanol, methanol, bio-diesel, CNG (compressed natural gas), electric, bio-LNG (liquefied natural gas) and green hydrogen.

Use of Electric vehicles are increasing and within two years, by getting good manufacturing numbers, the cost of electric 2, 3, and 4-wheelers and even buses will be equal to cost of the petrol and diesel vehicles

Apart from manufacturing Lithium-ion batteries, is also developing zinc-ion, sodium-ion and aluminium-ion batteries, so that "this new chemistry is going to be helpful for industry.. Indian start-ups are also doing a lot of research on this front.

Blue Hydrogen and Green Hydrogen: what are the differences?

Hydrogen energy is significantly more efficient than fossil fuels. Even more importantly it can be produced in a sustainable way and is considered a "renewable energy" source. Unfortunately, this is not true for all types of hydrogen energy. Green hydrogen is produced using electrolysis of water, and blue hydrogen utilizes natural gas. Green hydrogen represents a major opportunity for governments and private business to harness a valuable, sustainable energy resource in the coming decades.

Hydrogen is a promising fuel source for the energy transition, but not all hydrogen is the same. Green hydrogen and blue hydrogen are the two main types of hydrogen oils yet encompass vastly different environmental impacts.

With this large break in impacts, it should be no surprise that the oil and gas industry supports one type and climate supporters back the other.

The Future of Hydrogen Oil

Hydrogen has many potential applications in transportation and electricity generation – including cars, houses, portable power and others.

Yet, hydrogen oil is really only popular for industrial uses like petroleum refining, metal treatment, fertilizer production and food processing.

But we expect this to change in the coming decades.

The Environmental Benefits of Hydrogen

Increased use of hydrogen oil will be due to a variety of reasons, but a few of the key ones are related to its environmental benefits:

• Energy generated with hydrogen produces almost zero greenhouse gas emissions
• Hydrogen is a renewable resource
• Local production of hydrogen
• More efficient energy generation than fossil fuels
• Beyond just environmental benefits, hydrogen is a high-efficiency energy resource.

Hydrogen is a More Energy Dense Fuel than Oil and Gas

Comparing similar volumes, hydrogen contains approximately three times more energy than oil and natural gas. This enables hydrogen fuel cells to be 2-3 times more efficient than internal combustion engines.

Additionally, with continual improvements in hydrogen fuel cells, they can be quickly recharged (averages less than 4 minutes for cars) and function independently of national grids (i.e., portable energy source).

What is Hindering this Transition?

Currently, the main challenges for hydrogen oils are:

• Lack of infrastructure: There are few pipelines dedicated and suitable to transport hydrogen.
• Cost: Fuel cell technology is costly, and hydrogen production is expensive compared to fossil fuels.

These are the same issues that plague most new technologies, and costs almost always decrease as adoption, research, and investment increase.

Overall, the environmental and efficiency benefits make hydrogen sound like a realistic, glowing alternative energy solution. Unfortunately, not all hydrogen has these qualities, and it really depends on the production process.

Green Hydrogen Oil

Green hydrogen production separates water into hydrogen and oxygen using renewable energy-powered electrolysis. Scientists believe that this technology can meet 24% of the world’s energy needs and significantly contribute towards net zero emissions by 2050.

As we said before, cost remains the major hurdle to reaching this level of adoption. The cost to produce 1 kilogram of green hydrogen oil ranges from USD 3 to USD 7, compared to approximately USD 1 when using fossil fuels.

Green hydrogen production cost. Source: International Renewable Energy Agency (IRENA)

Yet, recent cost trends predict production costs will range between USD 1 and $2 by 2050. Electrolysis costs (which have dropped 50% over the past five years), predicted advances in fuel cell technology, and governments developing hydrogen strategies are driving this trend.

Blue Hydrogen Oil and Natural Gas

Blue hydrogen is hydrogen produced using either Steam Methane Reforming or Auto Thermal Reforming to separate natural gas into hydrogen and carbon dioxide (CO2). This type of hydrogen inherently relies on fossil fuels and is really just a by-product of natural gas production.

Some operations use Carbon, Capture, and Utilization and Storage (CCUS) strategies to reduce the emissions created in this process.

Source: International Energy Agency (IEA)

To produce 1 kilogram of blue hydrogen oil ranges between USD 1.50 to USD 3.50, including USD 0.50 to USD 1 per kilo for the CCUS processes. However, CCUS is not entirely efficient

Finally, The connection between blue hydrogen and natural gas is a primary reason why its role in the world’s clean energy transition is under scrutiny.

Conclusion: Green Hydrogen Investment in the Coming Decades

Hydrogen as a fuel source appears to have significant potential to help facilitate the world’s clean energy transition, and its production method is important. While it is not currently cost-effective to produce on a mass scale, it can get there.

Look at other renewable energy technologies that have gone through the same growth – namely solar PV and wind. Solar panels saw a 90% reduction in price between 2010 and 2019. This massive price reduction is a result of government support, private research and investment.

Now it is green hydrogen’s turn, and there is a real investment opportunity to get into this market early. If predictions hold and green hydrogen accounts for 24% of the world’s energy by 2050, the potential is truly massive.

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