Blue Hydrogen painting the new success story for sustainable supply chains?

With business operations being driven by the ideology of sustainability, hydrogen power is gaining momentum. The simplest and the most abundant substance in the universe – Hydrogen – when burns generates energy in the form of heat, with water as a by-product. The energy created from hydrogen generates no atmosphere-warming carbon dioxide, making it one of many potential energy sources that could help reduce carbon emissions and slow global warming.

Counting on the significant de-carbonization potential of the element, India’s National Hydrogen Mission, launched in August 2021, seeks to scale up renewable electrolysis hydrogen (“green” hydrogen) production and use it in multiple sectors, including transportation.

Now, while Green Hydrogen has been the first choice of many organizations looking to make a conscious shift to carbon-neutral gas, its significant uptake in the Indian transportation and logistics sector is still uncertain, as Blue Hydrogen catches the eyes of many.

What is Blue Hydrogen?

Hydrogen produced from natural gas with a process of steam methane reforming or auto thermal reforming, where natural gas is mixed with very hot steam and a catalyst, is called Blue Hydrogen.

The chemical reaction, as its by-products, leaves behind hydrogen and carbon monoxide, which when added with water mixture creates hydrogen and carbon dioxide that is captured and then stored through a process called Carbon Capture Usage and Storage (CCUS).

As the greenhouse gasses are captured, this mitigates the environmental impacts on the planet.

Blue Hydrogen: The smarter choice

Produced by splitting water through electrolysis, Green Hydrogen only leaves behind water and oxygen as its by-products which can be vent into the atmosphere with no negative impact. However, to achieve electrolysis, electricity and power is required, which is powered by renewable energy sources, such as wind or solar – making the at-the-pump price more expensive when compared to its counterpart blue hydrogen.

Blue Hydrogen is equally sustainable and inexpensive when compared to Green Hydrogen, making it the smarter choice.

Looking at the high costs, the Mukesh Ambani-owned Reliance Industries Ltd. aims to back its green energy transition plans by producing Blue Hydrogen at a competitive cost. The company that re-purposes a $4-billion plant that currently converts petroleum coke into synthesis gas to produce Blue Hydrogen for $1.2-$1.5 a kilogram, sees this conversion as a temporary measure until the cost of Green Hydrogen becomes competitive.

There are four key cost components of the at-the-pump price for hydrogen fuel namely production cost, transport cost, fueling cost, and potential tariffs along the supply chain.

As per estimates by the International Council on Clean Transportation Green Hydrogen is approximately 1.5 times more expensive than Blue Hydrogen in 2030, the two have a similar at-the-pump cost in 2050.

The gap narrows largely because of reduced costs for solar electricity and electrolysis and an increasing natural gas price. Notably, the per-kilogram cost of pipeline transport is almost six times less in 2050 than in 2030, as a result of increased capacity utilization and economies of scale.

Although Green Hydrogen offers significant climate benefits and is an emerging industry, it will require policy support from the government to achieve cost reductions and make it as competitive as its other counterparts.

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