Blue Hydrogen for Transport in the US: The Transition to Green Hydrogen & the Conduit to Keeping Pace with the EU

August 23, 2021 | Jim Lane

By Salim Rahemtulla, President, PowerTap Hydrogen Fueling Corp.

Special to The Digest

As the U.S. Department of Energy (DOE) indicates in its Hydrogen Program Plan it published in 2020, “Hydrogen, as a versatile energy carrier and chemical feedstock, offers advantages that unite all of our nation’s energy resources—renewables, nuclear, and fossil fuels—and enables innovations in energy production and end uses that can help decarbonize three of the most energy intensive sectors of our economy: transportation, electricity generation, and manufacturing.” In June 2021, as part of its Energy Earthshots Initiative, the DOE initiated its Hydrogen Shot, an effort intended to advance the hydrogen industry for public and private transport, goods movement, and hydrogen energy storage with the aim of reducing the cost of clean hydrogen by 80% to $1 per 1 kilogram in 1 decade, “1 1 1” in DOE parlance.

In its Hydrogen Program Plan, the DOE demonstrates support for the International Energy Association’s Future of Hydrogen, released at the 2019 G20 Summit, in its effort to “Stimulate commercial demand for clean hydrogen.” This “includes scaling up both “blue” hydrogen from fossil fuels with carbon capture, utilization and sequestration (CCUS) and “green” hydrogen using renewables as well as water electrolysis using nuclear resources.”

While deployment of green hydrogen might be the most direct route to net-zero emissions, blue hydrogen will be the most effective way to transition away from fossil fuel resources, enabling R&D efforts to enable efficiencies and reduce production costs for green hydrogen to achieve the DOE’s “1 1 1” vision coincident with industry’s vision, particularly in the area of transport.

PowerTap Hydrogen Fueling Corp.’s Efforts

PowerTap Hydrogen Fueling Corp. is working to deploy blue hydrogen for transport in partnership with the Andretti Group, which has over 100 company owned and operated facilities and delivers multi-branded fuel to some 125 independent owner operators. PowerTap is installing on-site steam methane reforming (SMR) production and fueling equipment on Andretti stations and those of other industry players for both cars, including up to Class 8 trucks. PowerTap’s approach is to use a blend of renewable natural gas and fossil fuel natural gas to produce hydrogen with a carbon intensity that will not exceed 0 g CO₂e/MJ. In California, this will enable PowerTap to earn carbon credits under the state’s Low Carbon Fuel Standard (LCFS) regulations, particularly, Hydrogen Refueling Infrastructure credits. PowerTap’s blue hydrogen production process includes capturing and utilizing the CO₂ by-product, primarily via biodigesters to produce agricultural soil amendments and other uses that are currently under development, and, secondarily, via off-takers who will repurpose the CO₂ for food-grade uses, such as beverage carbonation and other uses.

PowerTap’s Tech

PowerTap is generally technology agnostic, and this enables the company to select technologies for on-site hydrogen production and dispensing that are advantageous for the industry, in terms of cost, and the country and the world, in terms of implementing zero-carbon technologies. At present, blue hydrogen produced via SMR is the most cost-effective approach, with production costs at about $3 per kg, particularly with the incorporation of considerable cost-saving methods in the complementary technologies of compression, cooling and storage not typically seen complementing current SMRs in hydrogen production today. Focusing on blue hydrogen today will enable clean, zero-emission hydrogen to be produced in the near term (i.e., over the next decade) and drive the establishment of a strong clean hydrogen industry in the US, while technology improvements and cost reduction in green hydrogen via electrolysis occur in concert with the DOE’s “1 1 1” vision.

Europe Leads the Way

As of right now, Europe is the world’s leader of the hydrogen economy in terms of future planned installations and government policies that back the industry. According to IHS Markit’s Power-to-X quarterly report, “An unprecedented wave of hydrogen strategies has been released in 2020… six European countries and the European Commission released hydrogen strategies… in most cases as part of a green recovery plan.” IHS Market also predicts that $44 billion will be invested in green and blue hydrogen in France, Germany, Italy, Portugal and Spain within the next decade in relation to the announcement of a 55% decarbonization by 2030 (Fit for 55, the EU’s plan “for reducing net emissions by at least 55% by 2030 compared to 1990 and for being the first climate neutral continent by 2050.”). Additionally, Europe currently represents just under half of the world’s planned capacity for green hydrogen production at a capacity of 10.7 GWe input compared to 25.8 GWe worldwide. Many new low/zero carbon hydrogen projects are being announced in Europe which could solidify their position as the world’s leading green hydrogen producer.

U.S. Plays Catch-Up

The United States has recently started making more advancements in hydrogen as new companies and projects are being developed. However, its progress in producing green hydrogen is significantly slower compared to Europe due to its reliance on natural gas, driven primarily by its abundance and, therefore, predominance. This puts the U.S. at a disadvantage in comparison to Europe whose geography compliments green hydrogen production. Lands surrounding the North Sea are ideal for wind turbines which would result in more feasible options to produce green hydrogen.

What the U.S. Needs to Do to Keep Up with Europe

In order to better compete with Europe, the U.S. needs continued efforts in supporting research, development and demonstration, along the lines of the Hydrogen Shot’s “1 1 1” vision, which will encourage more companies to get involved. Along those lines, DOE recently announced an amount of $52.5 million to financially support 31 projects in relation to green hydrogen technology. The DOE also has a $430 million R&D program under the Advanced Research Projects Agency-Energy (ARPA-E) that is targeted towards energy technologies that are too new for investments from the private-sector. This program would encourage more startups in the hydrogen and renewable energy industry.

Another area on which the U.S. needs to focus to compete with Europe, is to drive the development of the hydrogen industry through policy that is consistent across all levels of government – at the federal, state, and local levels. This should include incentivizing legislation, such as engine standards mandating the hydrogen fuel cell adoption, particularly in goods movement with heavy-duty Class 8 trucks, implementation of monetary incentives for providing infrastructure, as the State of California has done to solve the “chicken-and-egg” problem between infrastructure and vehicle adoption, extend and expand of tax credits such as the Alternative Fuel Credit, the Fuel Cell Motor Vehicle Tax Credit, the Alternative Fuel Infrastructure Credit, the 48(a)(7) Fuel Cell Investment Credit and reauthorizing and expand programs that facilitate the purchase of green public transportation vehicles, such as the Low or No Emission Vehicle Program (“Low-No”).

Although the U.S. and Europe may be indirectly competing with their advancements in green hydrogen production, it is a worldwide goal to reduce carbon emissions and work towards a climate neutral world in the decades ahead. The Paris Agreement is a legally binding treaty relating to climate change and was adopted by 197 countries, including the U.S. and the EU with a joint goal to constrain global warming to 1.5 degrees Celsius. This agreement is vital to achieve a greener future as it brings together all the major economies of the world to work towards a common goal, while supporting developing countries with finance, technology and capacity, to make their own advancements in relation to renewable energy and climate change. Since the agreement was signed at the end of 2015, major milestones have been achieved and zero carbon solutions currently represent 25% of emissions and are looking to reach 70% by 2030. Continued initiatives and advancements will add to the success that has been accomplished so far and will help lead us to a cleaner and greener world in the years ahead.

Sources used (in addition to those directly referenced in the above):