'Blue hydrogen now cheaper to produce than grey H2 in Europe due to high carbon prices': ICIS
For new methane-based hydrogen production, it would cost less to invest in carbon capture than to pay for unabated CO2 emissions over its lifetime, analyst says
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“This meant that it was cheaper to invest in a gas-based hydrogen production unit with CCS capacity than paying for the carbon emissions resulting from grey hydrogen.”
“For the first time in ICIS assessment history, unabated steam methane reforming... became more expensive to produce on a project-breakeven basis in comparison to low-carbon hydrogen from autothermal reforming (ATR) with CCS.”
But the report explains that “while this shows potential for the investment case for low-carbon hydrogen, it is important to note that current hydrogen production plants are already in operation. This means that capital investment may have already been recovered, whereas there are currently no low-carbon units in operation in Europe, meaning all project developers would need to apply capex [capital expenditure] recovery to the final price hydrogen buyers pay.”
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