Hydrogen industry must clean itself up before expanding into new uses, report finds

A new report from Earthjustice calls out the climate toll of hydrogen made from natural gas.

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The hype around hydrogen as a clean fuel has reached the point where it threatens funding for genuinely clean energy, according to a new report by the environmental legal group Earthjustice.

Roughly 75 million metric tons of hydrogen are now being produced annually in ways that contribute to the climate crisis rather than help solve it. If hydrogen backers in the oil and gas industry want to make the case that hydrogen is a climate solution, they should start by decarbonizing these production processes, the report says.

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The vast majority of today’s hydrogen is made using steam and pressure to break the hydrogen-carbon bond in methane, or natural gas. This steam methane reforming process produces what is known as gray hydrogen.” Current hydrogen production emits as much carbon as all emissions from the U.K. and Indonesia combined, according to the International Energy Agency.

Most of the gray hydrogen is used for oil refining, fertilizer manufacturing and other industrial purposes. It’s this industrial hydrogen ecosystem that some experts, like those at Earthjustice, believe is the best candidate for clean hydrogen, given that it’s already generating carbon emissions.

Less than 1 percent of the world’s existing hydrogen production is now made using renewable energy, according to Tuesday’s Reclaiming Hydrogen for a Renewable Future report from Earthjustice’s Right to Zero campaign. This green hydrogen,” made in electrolyzers that use zero-carbon electricity to separate water into its constituent elements of hydrogen and oxygen, is what policymakers hear most about from industry groups promoting the fuel as a linchpin to combating climate change.

But industry groups asking state and federal policymakers to support hydrogen as a tool to combat climate change — such as the Clean Hydrogen Future Coalition, Hydrogen Forward and the Hydrogen Council — have been vague in defining what qualifies as clean” hydrogen, the Earthjustice report claims.

Clean hydrogen can be produced from a variety of sources, and we support continued innovation to ensure hydrogen can be produced with the least amount of associated emissions,” said Jake Rubin, senior director of public relations for the American Gas Association.

Many of these industry groups are promoting so-called blue hydrogen” — made the same way as gray hydrogen, with the addition of carbon-capture technologies to mitigate its climate impact. But a growing body of research indicates that this method, even if it can successfully capture almost all of the resulting carbon emissions, would still leave the climate worse off.

That’s because this process still requires energy to generate the steam and pressure for steam reforming, as well as to pull the methane out of the ground and transport it to where it’s used. What’s more, methane leaking from wells and pipelines is a much more powerful agent of climate change than carbon dioxide produced from burning methane, aggravating the climate cost.

This is being used as a strategy to siphon climate investments toward a commodity where the oil and gas industry currently dominates production and consumption,” Sasan Saadat, senior research and policy analyst at Earthjustice, and an author of the report, told Canary Media.

Policy initiatives are channeling billions of dollars toward hydrogen as an alternative to fossil fuels for transport, industry, heating and chemical production. The risk management firm DNV GL surveyed senior oil and gas professionals and found that more than half expected hydrogen to form a significant part of the energy mix within a decade.” 

But this push threatens to delay the clean energy transition by siphoning resources away from solutions like electric appliances and vehicles,” Saadat said in a Tuesday statement. In the future, green hydrogen may help us carry renewable energy into the toughest corners of the energy system, but it’s no substitute for rapidly electrifying the bulk of our economy today.”

Critics to hydrogen industry: Start the cleanup at home

Hydrogen’s chief current use is as a workhorse gas at refineries to make low-sulfur diesel and other fuel. Its second-largest use is in factories that make fertilizer. Consistent supplies are critical for these industries. Shortages can constrain production at a refinery, said Jamal Kheiry, spokesperson for Marathon Petroleum, the largest refiner in the U.S.

These demands have led to well-established hydrogen production facilities in and around refineries using fossil gas to make hydrogen. These hydrogen hubs” include regional pipeline networks designed for the gas, which can’t be transported in pure form through natural-gas pipeline networks without significant retrofitting. (Hydrogen molecules are much smaller than methane molecules and require different materials to contain them and pressures to move them.)

Michael Liebreich, chair of Liebreich Associates and founder of BloombergNEF, wrote last year that these locations, where heavy industry, particularly chemicals, fertilizer, refineries and steel come together with shipping, freight transport, pipeline and power infrastructure” are natural hubs for green hydrogen production to take hold.

The European Union supports funding for these hubs, which are largely built around existing oil and gas industry infrastructure, as a starting point for shifting to green hydrogen over time. In the U.S., utility Entergy, which serves the oil and gas industry centers of Louisiana and eastern Texas, has made hydrogen a centerpiece of its decarbonization goals.

The Earthjustice report acknowledges that green hydrogen could find uses in specific sectors like shipping, aviation, high-heated industrial processes, and long-distance trucking.” But it disagrees with the idea that hydrogen should find its way to widespread use in vehicles, or as a main additive to fossil gas and biogas in pipelines, as boosters in the oil and gas industry are proposing.

There’s this misalignment between the uses the hydrogen industry is pushing and the uses that all independent experts have found are the ones where we might actually need green hydrogen because electric options are not available,” said Sara Gerson, senior attorney at Earthjustice and one of the report’s authors.

A long path for green hydrogen to reach cost-competitive scale

How quickly and completely carbon-free hydrogen might replace the carbon-emitting hydrogen now in use in refining and other industries will depend on both the cost of scaling up to make it at large volumes and the emissions restrictions placed on dirty versions today.

Hydrogen is ubiquitous in nature, but inconveniently, it does not appear solo. Instead, it is locked tightly to carbon in fossil fuels or to oxygen in water. Using electricity to separate hydrogen from water is still more expensive than using heat and steam to separate it from fossil fuels. Green hydrogen costs about $5 per kilogram to make today, compared to between 70 cents and $2.20 per kilogram for gray hydrogen.

Falling costs for wind and solar electricity that could be used to power electrolyzers are expected to lower those costs over the coming years, and companies that make electrolyzers are trying to drive down costs as well. U.S. Energy Secretary Jennifer Granholm announced a federal Hydrogen Shot in June, aimed at driving down the price of clean hydrogen to $1.00 per kilogram in the next decade. 

Multinational industrial gas producer Linde, for example, operates 80 electrolysis plants that produce green hydrogen around the world. But it is also building what has been billed as the largest conventional steam methane reforming hydrogen production facility in the U.S., a $250 million plant in St. James Parish, Louisiana that will supply the region’s massive oil refinery industry.

In the fast-moving business of green hydrogen, other companies are vying to hold their slots as top producers. Norwegian company Nel Hydrogen says it is still the largest electrolyzer company in the world but notes that manufacturers in China are gaining and now take two of the top four spots. Nel is completing a 500-megawatt-capacity production line in the Norwegian port city of Herøya. The company’s production cost goal is $1.50 per kilogram by 2025

Policy is pushing in the same direction: By 2030, half of the fossil hydrogen in Europe will have to be replaced with renewable hydrogen to meet European Commission climate targets. That would amount to 40 gigawatts of hydrolyzer plants, Nel CEO Jon André Løkke told the audience at the company’s second-quarter meeting earlier this month.

That is equivalent to 16,500 of our largest electrolyzers, or 72 years of production on the 500-megawatt production line,” he said. That production line is not running yet, although it is built and set to open this quarter.

Blue hydrogen: A clean bridge fuel or fossil industry chimera?

In the meantime, promoters of blue hydrogen say it could serve as a cost-effective bridge fuel, readying a customer base for the eventual rise of green hydrogen. That’s because hydrogen is seen as a replacement for many hard-to-decarbonize sectors. Those could include fuel for ships and planes, backup fuel for a zero-carbon grid, or perhaps industries like steel and cement that require high heat that’s costly or technically challenging to provide with electricity alone.

But critics worry that blue hydrogen processes will fail to capture enough carbon and methane from the entire process to avoid worsening the climate change impacts. Recent research by Robert W. Howarth and Mark Z. Jacobson, published in the journal Energy Science & Engineering, looked at blue hydrogen where the carbon dioxide emissions from steam methane reforming were sequestered. They found this blue hydrogen difficult to justify on climate grounds.” Its overall footprint was at best 25 percent lower than traditional hydrogen. When the researchers assumed a higher methane leakage rate, this blue hydrogen was as little as 9 percent better than traditional hydrogen.

Other analysts, including Liebreich, point to more advanced methods that could deliver blue hydrogen that captures almost all of its carbon emissions in a cost-effective manner. Newer and better technologies could enable blue hydrogen producers to capture emissions more cost-effectively than the fossil fuel power plants that have tried using carbon capture and storage (CCS) systems. CCS and hydrogen are both targets for billions of dollars of research and development funding in the infrastructure bill passed by the U.S. Senate last month and now awaiting action by the House.

But Earthjustice shares the concern of many environmental and clean energy groups that funding CCS and blue hydrogen will divert money needed to develop green hydrogen, as well as to invest in renewable energy and electrifying transportation and building heating. Compared to these alternatives, hydrogen offers very little promise to reduce the carbon and methane emissions that are causing global warming, they warn.

My hope is that this report helps clear through some of the fog and din fossil fuel is creating about what our best options are,” Earthjustice’s Gerson said, so we can focus on dramatically scaling up the zero-emissions solutions we need as soon as possible.”

(Lead image: Kamran Chaudhry/Unsplash)

Ingrid Lobet currently divides her time between reporting on climate solutions and investigative work on climate, energy and environmental health.