Blue hydrogen — made from natural gas with carbon capture and storage — will be cheaper to produce in Norway for another two decades before being undercut by green hydrogen produced with renewable energy, according to a senior executive at Equinor.
The Norwegian company’s executive vice-president for exploration and production, Kjetil Hove, told the Offshore Northern Seas (ONS) conference in Stavanger, Norway, that the company will produce and export 2GW of blue hydrogen — consuming about 10% of the gas produced on the Norwegian continental shelf.
“In our Norway hub, our 2GW of hydrogen is blue. Our view is that blue hydrogen will be important in the next couple of decades and then green hydrogen will come after that,” Hove said.
He suggested it will take a couple of decades for green hydrogen to be cost-competitive with blue hydrogen.
“For the next couple of decades it is about blue for the Norwegian energy hub,” Hove said.
“I don’t think the customers care if it is blue or green. But I think the reality is that the next couple of decades blue hydrogen will be the most competitive hydrogen. In the long term, when you get more renewable power generation and also green hydrogen [that will become cheaper].”
Because of the sky-high price of natural gas across Europe today, green hydrogen would currently be cheaper to produce than blue, but as Minh K Le, head of hydrogen research at Rystad Energy, points out, Norway has its own gas fields so does not have to buy methane at wholesale prices.
“In that regard, they are somewhat protected from the crazy natural gas market in continental EU,” he tells Recharge.
Le also points out that Rystad believes natural gas prices will fall in 2025-26, “so while green hydrogen is cheaper now, in the long term, blue H2 prices can still be competitive in certain cases”.
While blue hydrogen has come under scrutiny due to the oil industry's upstream emissions of methane — a powerful greenhouse gas — the Norwegian sector has one of the lowest methane leakage rates in the world.
Initial talks have taken place between the German and Norwegian governments about a pipeline project to carry additional natural gas and then hydrogen, or its derivatives, between the two countries.
Hove suggested that blue hydrogen on the scale Equinor is proposing would be enough to convert the entire German steel industry in a low carbon system.
“To achieve this, we need long-term commitments from the buyers. If there are buyers, we are ready to commit for delivering,” he said.
Equinor believes it has a good starting point with the existing gas export infrastructure from Norway to Europe.
“Also, we are building real-life infrastructure though Northern Lights," he said, referring to a flagship carbon capture and storage project in the North Sea.
A version of this story was originally published by Recharge's sister publication, Upstream.