The Russian Federation is to invest 9.3 billion roubles ($125m) until the end of 2024 to develop its nascent clean H2 sector, in a bid to become a major exporter of “low carbon hydrogen” produced from fossil gas and nuclear energy.
But following international outrage and sanctions over Moscow’s invasion of Ukraine, the list of viable customers willing to buy Russian commodities has dwindled, which leaves potential hydrogen producers in the country in a quandary.
Deputy prime minister Alexander Novak revealed the billion-rouble hydrogen investment in an article in Russian-language magazine Energy Policy, where he lamented the “rejection” of Russian oil by Western nations.
The government is pressing ahead with plans to develop its hydrogen production capability, he said, without elaborating on how the money would be spent.
The Kremlin signed an agreement with state-owned gas giant Gazprom and state-owned nuclear power company Rosatom in January to implement a roadmap for hydrogen industry development to 2024. Novak gave no indication when Moscow would reveal its proposals for the next planning stage, from 2025-30.
First unveiled in 2020, the 2024 roadmap has been working its way through Russia’s parliament since, and an updated version was approved late last year.
Among the goals put forward is the ambition to become a major exporter of “low carbon hydrogen”, partly to achieve the country’s Paris Agreement goals but also to insulate Russia’s fossil-fuel export-dependent economy against decarbonisation.
The latest published version seen by Hydrogen Insight, dated August 2021, suggests that Russia could export 200,000 tonnes by 2024, rising to 2-12 million tonnes by 2035 and 15-50 million tonnes by 2050.
Unsurprisingly, the strategy puts particular emphasis on the production of blue hydrogen made with fossil gas and carbon capture and storage (CCS), as well as so-called turquoise hydrogen, or methane pyrolysis, which makes hydrogen and solid carbon from fossil gas by heating it in the absence of air.
Russia is one of the world’s biggest gas producers, and claims it can produce blue hydrogen cheaply as a result.
Gazprom is already a significant producer of grey hydrogen made with fossil gas, making about 360,000 tonnes a year, while Rosatom adopted hydrogen development as major strategic plank of its business in 2020.
The strategy also gives space to hydrogen produced via electrolysis from nuclear power and hydroelectricity, which currently generate around 20% each of Russia’s electricity supply, as well as (to a lesser extent) renewable green hydrogen.
But the hydrogen roadmap acknowledges that Russia’s H2 industry is still nascent, and that significant investment is needed for infrastructure upgrades and the development of CCS.
And there remain big questions about whether Russia can upgrade its existing infrastructure to export hydrogen wholesale without very significant investment — or even who would buy it.
The vast majority of Russia’s existing gas export infrastructure runs towards a now-hostile Europe, with only a few pipelines heading east to China and Central Asia, most of which are likely to be filled with contractual quantities of gas destined for Chinese markets for the foreseeable future.
If Russia can find a way to cost-effectively export its hydrogen, China could be the most receptive to becoming a buyer, but Beijing has major hydrogen production ambitions of its own, potentially with the cheapest equipment in the world. Any purchases of Russian hydrogen would have to be at a price lower than Chinese producers can manage.
The same principle applies to other potential buyers in Turkey and the Middle East.
Russia may instead be considering using low-carbon hydrogen in its existing ammonia export infrastructure — before the Ukraine invasion Russia accounted for 20% of seaborne ammonia supply, around 4.4 million tonnes per year — which the UN is keen to mobilise to secure global food supplies.
In September 2021, Gazprom signed a deal with Rosatom and the government of Sakhalin Island, on Russia’s far eastern coast, to develop a blue hydrogen project. The island already hosts a giant liquefied natural gas (LNG) scheme.
And the state-owned gas company has recently been working with Tomsk Polytechnik to develop methane pyrolysis technology — it had previously been collaborating with researchers in Germany on this technology, which has likely been affected by geopolitical tensions and sanctions.
This may also have nixed an agreement signed between Rosatom and French energy company EDF in April 2021 to jointly promote hydrogen in Europe and Russia. EDF was approached for comment on this by Hydrogen Insight.
