Hydrogen-fuelled climate goals need radical carbon price hike By Bloomberg | March 31, 2020, 6:35 a.m. | Share:
- Hydrogen could be key to eliminate greenhouse-gas emissions from vast swaths of the economy, but it will need significant intervention from governments and a much higher carbon price to be a viable solution. The gas could replace oil, natural gas and coal to help get rid of about a third of emissions from fossil fuel and industry by 2050, according to BloombergNEF . But the cost of emissions, which has plunged because of the virus crisis, would have to soar as well as governments committing many billions in subsidies. Energy majors such as Royal Dutch Shell plc and renewable developers like Denmark’s Orsted A/S have pursued pilot projects to look at how to produce green hydrogen for oil refineries and other industrial users. Steel and cement production could also replace fossil fuels with hydrogen to decarbonize. "Hydrogen has potential to become the fuel that powers a clean economy,” said Kobad Bhavnagri, head of industrial decarbonization at BNEF. “In the years ahead, it will be possible to produce it at low cost using wind and solar power, store it underground for months, and then pipe it on-demand to power everything from ships to steel mills.” Technology trends drive business development – grow your business with the Daily Oil Bulletin. SIGN UP TODAY FOR A FREE 14-DAY TRIAL But to scale up, policy makers will need to provide significant support. For the industry to grow, governments need to provide about $150 billion of subsidies by 2030, BNEF said. This dwarfs current efforts by governments around the world that so far have allocated just a few billion dollars to help projects get off the ground. Yet as governments spend trillions to keep economies from collapse amid the coronavirus outbreak, there are signs that some of the spending in Europe could go to green efforts. One major step will be to drive down the cost of production. Hydrogen made with renewable electricity sources could be produced for $0.80 to $1.60 per kilogram in most parts of the world before 2050. That would make it competitive with current natural gas prices in Brazil, China, India, Germany and Scandinavia on an energy-equivalent basis, BNEF said. European carbon futures trade at about 17.20 euros ($19) per ton, after sliding by more than a third this year because of lower demand. If hydrogen costs reach $1 per kilogram, a price of $50 per ton of carbon dioxide would be needed to switch from fossil fuels to clean hydrogen in steel making by 2050 and $60 per ton to use hydrogen for heat in cement production. To make chemicals, including ammonia, a price of $78 is required, while it would take $145 to power ships with clean fuel. In total, BNEF estimates that over $11 trillion of investment would be needed by 2050 to build the supply infrastructure needed for hydrogen to supply 24 per cent of final energy in 2050. © 2020 Bloomberg L.P.
To see this working, head to your live site.
Mar 31, 2020
Hydrogen-fuelled climate goals need radical carbon price hike
By Bloomberg |March 31, 2020, 6:35 a.m. |Share:
Hydrogen could be key to elim
Hydrogen-fuelled climate goals need radical carbon price hike By Bloomberg |March 31, 2020, 6:35 a.m. |Share: Hydrogen could be key to elim