The chief executive of Norwegian state-controlled energy giant Equinor has warned that rushed political decisions favouring green hydrogen over blue could hinder the development of a large-scale global clean-hydrogen market.
Anders Opedal told this week’s IP Week conference — being held virtually this year because of the coronavirus pandemic — that Equinor is “excited about the potential of hydrogen and carbon capture and storage”.
But he argued that political decisions putting blue hydrogen at a disadvantage to green, without allowing the market to drive which technology should be adopted, could lead to increased costs and slow development.
So-called blue hydrogen is produced from natural gas, but climate-warming carbon dioxide is released as a by-product and this needs to be captured and stored. However, this still is not yet a totally carbon-free alternative as the technology does not yet exist that can abate 100% of the CO2
Emissions-free green hydrogen is produced by splitting water molecules with electricity generated from renewable energy sources, such as wind power.
'One risk here'
Opedal said: “There is one risk here — I see there are some politicians, some countries, that would like to make technology decisions already regarding hydrogen and CCS.
“They would like to only move forward with renewable hydrogen. I think that would be too expensive and then the transition into hydrogen might go too slow.
“So, I think it's very important now that we become very technology agnostic, allowing the market to compete with the different technologies, because I think we need all these technologies if we want to become net zero by 2050.”
The official said Equinor will “do our part and invest in the technology we believe in”.
“Then it's up to us to be competitive in the long run,” he said.
Last year the European Commission unveiled a strategy to scale up renewable hydrogen, although it recognised the need for a phased approach in which blue hydrogen will play a role.
BP aiming for 10% share
BP chief executive Bernard Looney also told IP Week that the UK supermajor would be aiming to grab a 10% share of global clean hydrogen markets once they become properly developed in the 2030s.
Looney said: “I think the technology that’s got the most potential in the medium to longer term is probably hydrogen. I do think it has the attraction of being almost like an LNG-type business in its infancy today.”
Looney said BP believes hydrogen is going to play a significant role in decarbonising industry, heating and mobility.
“BP intends to play a key role,” he said
On Tuesday, Total chief executive Patrick Pouyanne said the French supermajor has ambitions to become a significant player in the fledgling global hydrogen sector and warned that increased demand will be crucial for stimulating production at scale and for keeping a lid on costs.
Equinor, Europe’s second-largest gas producer, is involved in a number of blue and green hydrogen projects.
These include the proposed Zero Carbon Humber scheme in the UK, a blue hydrogen scheme with carbon capture that is aiming to decarbonise a big chunk of industry in northern England.
Earlier this month, Equinor announced that is assessing another blue hydrogen scheme with France’s Engie that could produce hydrogen for customers in Belgium, France and the Netherlands.
In December, Equinor joined the Shell-led NortH2 project in the Netherlands, which aims to produce green hydrogen from offshore wind.