Anglo-Dutch supermajor Shell and Japanese giant Mitsubishi announced a memorandum of understanding to create a blue hydrogen production facility in Alberta, Canada, as part of Shell’s previously announced carbon capture and storage hub.

Mitsubishi would build the hydrogen facility near Shell’s Scotford refinery facility, with Shell providing carbon dioxide storage with the proposed Polaris CCS project.

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“Shell is leveraging our global leadership in carbon capture and storage to help produce the low-carbon products our customers need to move through an accelerated energy transition,” said Mark Pattenden, senior vice president of chemicals and products Canada for Shell.

“This opportunity is in line with our vision to create a world-class site to provide customers with lower-carbon fuels, products and carbon storage.”

Green vs Blue

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.

Although the companies may scale up the project in the future and create a larger hydrogen hub, the project will initially produce about 165,000 tonnes of hydrogen per year from natural gas. Most of the hydrogen will be converted to ammonia and exported to Asia, primarily Japan.

Shell announced in July plans to build out the Polaris CCS project, that would capture 750,000 tonnes of carbon dioxide per year. This could reduce emissions from the refinery by up to 40% and 30% from its chemicals plant.

Alberta is the highest polluting province in Canada, with most of its greenhouse gas emissions coming from oil sands, oil and gas production, and mining. The country released a strategy last year setting hydrogen as a key part of its path to net-zero emissions by 2050.