Hydrogen investment platform Hy24 will initially be colour agnostic when it comes to the types of clean hydrogen projects it invests in but, with the fund's focus on electrolysis schemes in the first instance, there may not be much room for blue hydrogen.
Blue hydrogen is derived from natural gas through the process of steam methane reforming (SMR), but unlike traditional SMR hydrogen production, some, but all, of the associated carbon emissions are captured and stored.
The fund’s co-founder, and FiveT Hydrogen chief executive, Pierre-Etienne Franc tells Upstream that while Hy24 will likely invest in some blue hydrogen projects, he views such developments as carbon dioxide projects, rather than hydrogen projects.
Blue hydrogen is produced from natural gas feedstocks, with the carbon dioxide by-product from hydrogen production captured and stored. However, the process is not emissions free.
Green hydrogen is made using electrolysis powered by renewable energy to split water molecules into oxygen and hydrogen, creating an emissions-free fuel.
“In general, you're putting in place investments to basically clean existing steam methane reforming solutions, so the hydrogen part is already there,” he explains.
“The fund is on hydrogen, it is not on CO2. So that's why it's not so easy to justify blue for us and I think there is so much to be done on green hydrogen, that it should be a priority.”
He also revealed the fund would not invest in any assets which did not “have a positive, tangible contribution to CO2 reduction”.
While the fund will be heavily focused on green hydrogen developments, Franc indicates that pink hydrogen, which is generated through electrolysis powered by nuclear energy as opposed to renewables, could also be an area the fund will look to invest in.
However, he stresses that the production of pink hydrogen is only really competitive in areas where there is an existing nuclear asset base, with the cost of building new nuclear assets for hydrogen production too expensive.
“But if you can use the existing legacy assets of existing nuclear base countries, like in the US, France, Japan, and a couple of other countries which have a relatively strong base of nuclear, honestly, it would be a pity not to use it," Franc says.
“It's a way to, to accompany the mobilisation of the nuclear energy into the downstream [hydrogen] use. Instead of selling just electricity... it can serve the decarbonisation of gas based processes, which wasn't the case before, so that's why I think we should not disregard the pink [hydrogen] when we can use it.”
Franc adds that countries with a large nuclear asset base, such as France, could also utilise those assets to potentially develop a clean hydrogen export strategy as they also increase their use of renewables.