US industrial gases company Air Products has announced it will build, own and operate technology to capture carbon emissions from its existing hydrogen plant in Rotterdam, thus turning its grey H2 blue.

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The grey hydrogen facility has 300 tonnes a day of H2 capacity, and Air Products claims that after the retrofit, this will be the largest blue hydrogen facility in Europe once operational in 2026.

While Barents Blue, a clean ammonia project in Norway with an estimated 600 tonnes a day of blue H2 production, had originally been scheduled to come on line in 2026, this timetable also hinged on FID this year.

However, this is likely to have been delayed by the exit of prospective carbon storage operators Equinor and Vår Energi in February this year, with a new operator, PGNiG, unlikely to be approved by regulators before December.

Air Products plans to store the CO2 captured from its Rotterdam hydrogen facility via the Netherlands’ flagship Porthos CCS project.

Porthos, developed by a joint venture between state-owned firms EBN, Gasunie, and the Port of Rotterdam Authority, aims to transport 2.5 million tonnes of CO2 a year over the next 15 years to depleted gas fields offshore for storage 3-4km under the seabed.

The project, which reached final investment decision (FID) earlier this month, has already contracted all 37 million tonnes of storage capacity to four industrial emitters in Rotterdam that had signed joint development agreements: Air Products, fellow industrial gas company Air Liquide, and oil majors Shell and ExxonMobil.

These four companies were in 2021 awarded €2.1bn ($2.26bn) in grants via the Dutch government’s SDE++ scheme, covering the cost gap between the price of the EU’s carbon credits on the Emissions Trading System and the costs involved in developing CCS infrastructure.

Air Products lists ExxonMobil’s refinery in Rotterdam — already an existing customer for grey hydrogen — as an offtaker for its blue H2 once the project is onstream.

While the industrial gases firm notes that the blue hydrogen plant is backed by a long-term contract with ExxonMobil, it does not provide further details on this agreement.

“Air Products has been actively present and investing in Rotterdam for decades,” said the firm’s chief operating officer Samir Serhan.

“Industrial companies here are continually looking for ways to realise synergies, create economies of scale, drive energy efficiencies and ultimately decarbonise. This project fulfils that demand.

“By sequestering CO2 through Porthos and bringing additional blue hydrogen to ExxonMobil and other customers, we can help generate a cleaner future.”

Blue hydrogen would theoretically reduce the emissions footprint of ExxonMobil and other industrial H2 users in the region, reducing not only the need for extra carbon allowances under the EU's Emissions Trading System, but also future payouts to the Dutch government from a strict carbon tax on oil, chemicals and steel companies — passed in 2021 — which will rise to €125 per tonne of CO2 by 2030.

However, blue H2 does not count towards the EU’s targets for 42% of hydrogen consumed in the bloc to come from renewable sources by 2030, as defined in its Delegated Acts.

CCS is also controversial, with critics pointing to a number of large projects failing to deliver on promised storage rates, the continued dependence on fossil fuels, and a potential lack of mitigation around upstream methane emissions.

Updated to include additional information on the hydrogen production capacity of the project.