• Blue hydrogen to win price war against green for years to come, according to Platts

    Date posted:

    • Post Author

      Patrick Lavery

      Combustion Industry News Editor

S&P Global Platts has updated its cost estimates of blue (carbon-captured production from fossil fuels) and green (from electrolysis using renewable electricity) hydrogen, providing at the same time more detail on production areas, compared to its last update in early February. Estimated volumes of production remain approximately the same – about 3.3 million metric tonnes of blue H2 annually by 2028, up from 0.6 million tonnes now, and about 0.6 million tonnes of green hydrogen annually by 2028, up from the present 0.2 mt/yr. Price estimates have changed, however. Blue hydrogen could be produced in California for around US$1.40/kg (€1.28/kg), and grey hydrogen US$1/kg (down from the previous estimate of US$1.5-2/kg). On the other hand, the previous estimate of US$2.5-3.5/kg of green hydrogen has now risen to US$4.42/kg (assuming renewable electricity priced at $65/MWh). What this points towards, however, is the same – a period where blue hydrogen is the dominant low-carbon form while costs for green hydrogen fall, perhaps over a period of 10-20 years. Platts foresees that Japan would have trouble producing its own blue hydrogen, because of “a lack of affordable geological storage for captured CO2”, which is one reason that Japan is looking for supplies from other countries, such as Australia. Europe is expected to be the site of most green and blue hydrogen production by 2028.