Green Hydrogen’s Market Chaos

Keywords: Hydrogen, Green Hydrogen, Blue Hydrogen, Gray Hydrogen, Electrolysis, Steam Methane Reforming, Chlor Alkali

Overview

Spurred on by record growth of solar energy, recent reports indicate that more than 40 percent of electric power is now made from clean energy, which includes wind, nuclear, batteries, and hydro. In contrast, the production of hydrogen is still largely fossil based, and green hydrogen is less than 0.1 percent of hydrogen production today, even though switching to green hydrogen is considered essential to decarbonize many industrial processes. Why has switching to green hydrogen been so slow and what will it take to encourage the huge investments that are needed?

Hydrogen Production Today

Currently, the world consumes about 100 million metric tonnes per year of hydrogen. Refining and ammonia are the largest markets for hydrogen today and current hydrogen production is dominated by Steam Methane Reforming (SMR) often called gray hydrogen, or gasification of bituminous coal followed by reforming called black hydrogen. The approximate 2024 hydrogen by type is:

• 98 million t/yr gray or black H2
• 2 million t/yr blue H2,
• 0.1 million t/yr green H2

While there have been numerous government programs, partnerships and project planning announcements for green hydrogen production, hydrogen pipelines, hydrogen hubs and hydrogen storage technologies, projects have been slow to move out of the pilot plant or demonstration project phase. Large-scale projects seem to be delayed or cancelled, and actual construction has been well below than needed to decarbonize the hydrogen market. The combined carbon emissions from the production of hydrogen and ammonia are estimated to be around 3-3.8 percent of total global CO2 emissions. The US has installed the most blue hydrogen projects, but China currently has the most green hydrogen facilities in operation.

Operational Hydrogen Projects

• Xinjiang Green Hydrogen Project (China 2023): 260 MW (62 tons/day)
• Hygreen Energy (China 2023): 240 MW (58 tons/day)

Planned in US

• Advanced Clean Energy Storage (ACES) Delta Project (Utah): 200MW 100 metric tons per day
• Plug Power's Green Hydrogen Plants: Georgia & Louisiana 15 metric tons per day each
• Air Products and AES Corporation's Green Hydrogen Facility (Texas): 100 metric tons per day
• The Natrium Project in Wyoming: Berkshire Hathaway Energy and Occidental Petroleum
• The Pawnee Station in Colorado: Xcel Energy and McKinstry
• The Electrolyzer Project in California: A partnership between Chevron, Microsoft, and AeroVironment
   

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