New whitepaper 'Blue hydrogen emerging as a long-term enabler of green hydrogen'

Carbon-free or green hydrogen has seen considerable investment and an even larger project pipeline in recent years. It remains seen as a core part of the Energy Transition, given its expected role as a fuel that can help decarbonize some hard-to-abate sectors, such as green steel and fertilizers, and is also seen as a potential energy storage solution for the power sector. However, recent years have seen a slowing in the energy transition, questioning green hydrogen’s future. And an increasing number of projects envision hydrogen as an end-point, but in the near term will use more tangible fuels such as natural gas or blue hydrogen (hydrogen from natural gas with carbon capture). This raises questions about the future of green hydrogen. Furthermore, the new global trade environment, with increased tariffs and other protectionist measures, has raised questions about how green hydrogen, ammonia, and methanol will be impacted. We address these issues in this paper. 

• Use of blue hydrogen and natural gas is positive for the development of green hydrogen in the long term. Some projects will initially use gas or blue hydrogen, opening up the question about whether they will ever progress to green hydrogen. But we see these projects as a positive for green hydrogen development. They allow projects to be built and either create hydrogen supply that can later be replaced with green hydrogen supply, or demand that can later be replaced with green hydrogen demand. Most importantly, the current certainty around supply of natural gas and hydrogen has allowed these projects to go ahead today, where it would be much more challenging for many purely green hydrogen projects to go ahead given high green hydrogen costs.
• The project pipeline for hydrogen projects remains strong. While some projects will start out as blue hydrogen- or gas-fueled, with green hydrogen to come later, the project pipeline remains strong. And this is true across many industries. Green steel development is strongest in Europe, the Middle East, and North Africa but activity is certainly present elsewhere including the United States and China. And the pipeline for both green methanol and ammonia projects – including those initially utilizing blue hydrogen – is also strong. We have not seen meaningful changes to the pipeline in terms of cancellations, though a large pre-FID project list could prove to be more 
  challenged than 2-3 years ago. 

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