Blue hydrogen to dominate North America: GlobalData
Business analytics platform GlobalData said September 1 blue hydrogen will account for 85% of North America’s 1.4mn metric tons/year of hydrogen capacity by 2030.
In a new report, GlobalData notes that North America has seen increasing investments in new sectors for hydrogen, including transportation, green fuels and power – a trend quickly emerging around the world.
“Blue hydrogen production in North America is some of the cheapest in the world due to low natural gas prices and an abundance of suitable sites for geological carbon storage,” GlobalData’s energy transition analyst Miles Weinstein said.
Blue hydrogen production in the US still costs in the neighbourhood of $1.52/kg, he said, compared to about $1/kg for grey hydrogen, but available tax credits reduce that to $1.26/kg, and are expected to push blue hydrogen’s cost down further in the near-term, to about $1.11/kg by 2026.
Costs for Canadian blue hydrogen are comparable to those in the US, the report notes, and discussions with stakeholders are now underway that would see tax credits made available keep Canadian blue hydrogen competitive with US supplies.
Still, Canada leads the US in the production of blue hydrogen, mainly due to its existing natural gas extraction and carbon sequestration infrastructure and government funding for low-carbon vehicles and fuels. Globally, most hydrogen capacity is of the green variety, mostly because of high natural gas prices or the availability of cheap renewable electricity.
North American hydrogen producers – both the blue and the green variety – are targeting the transportation sector more than any other, and automotive manufacturers, oil and gas companies, and other stakeholders are beginning to build out a value chain for fuel cell electric vehicles (FCEV) and hydrogen fuelling infrastructure.
“Current demand in the transportation sector is mainly limited to a niche market in California due to the state’s Low Carbon Fuel Standard,” Weinstein said. “With similar policy intervention or direct cost reductions, transportation can become a competitive sector for hydrogen use in the rest of North America as well.”