In April, the international think tank the Global Carbon Capture and Storage Institute (GCCSI) released a report on clean hydrogen produced from fossil fuels with carbon capture and storage (CCS) and the role it can play in rapidly reducing global CO2 emissions.
The report looks at: the emissions abatement opportunity clean hydrogen produced from fossil fuels with CCS provides; cost drivers for hydrogen produced from fossil fuels compared to renewable hydrogen; and policy recommendations to drive investment in clean hydrogen production.
The emissions abatement opportunity clean hydrogen produced from fossil fuels with CCS provides
For clean hydrogen to play a significant role in achieving climate targets, the report says hydrogen production needs to ramp up from less than two million tonnes per annum (Mtpa) to over 500Mtpa in less than 30 years.
If this target is met, it could deliver a 6 billion tonne CO2 reduction from 2050 onwards.
Cost drivers for hydrogen produced with fossil fuels and CCS compared to renewable hydrogen
The cost of producing clean hydrogen from fossil fuels with CCS can vary significantly from place to place due to differences in fuel costs. According to 2019 data from the International Energy Agency (IEA), hydrogen made from fossil fuel with CCS costs significantly less than hydrogen from renewables – USD $1.20 –2.60/kg, compared to USD $3.20-7.70.
The GCCSI states this form of hydrogen production is most affordable as it utilizes existing available resources, infrastructure, and well-established supply chains.
Renewable hydrogen is currently more expensive to produce than clean hydrogen from fossil fuels with CCS due to capital expenditure required for electrolyzers, price of electricity and the utilization of electrolyzers.
Due to the falling cost of renewable energy and the abundant availability of solar and wind resources, Australia has the potential to produce renewable hydrogen for global export at a competitive price, in the future.
The report concludes that ramping up the demand and scale for the production of clean hydrogen requires a strong and sustained policy.
Seven recommendations are given in the report:
- Define the role clean hydrogen produced from fossil fuels using CCS will play in meeting national emissions reduction targets and communicate this to industry and the public;
- Create a certain, long term, high value on the storage of CO2;
- Support the identification and appraisal of geological storage resources for CCS;
- Develop and promulgate specific CCS laws and regulations that include the transfer of long-term liability for geologically stored CO2 to the Government subject to acceptable performance and behaviour of the stored CO2;
- Identify opportunities for CCS hubs where clean hydrogen from fossil fuels with CCs can be produced and facilitate their establishment;
- Provide low-cost finance and/or guarantees or take equity to reduce the cost of capital for hydrogen produced from fossil fuels with CCS investments; and
- Where necessary, provide material capital grants to hydrogen from fossil fuels with CCS projects/hubs to initiate private investment.
In April, the Australian Government announced it will invest $275.5 million to accelerate the development of four additional clean hydrogen “hubs” in regional areas and implement a clean hydrogen certification scheme. It will also invest $263.7 million to support the development of carbon capture, use, and storage projects and “hubs”.
The GCCSI states that the urgency to reach net-zero emissions targets requires the deployment of all emissions-reducing technology.
Technologies that are mature, commercially available at a large scale, and have been used for many years, must be deployed.
The GCCSI report can be read here.