The chief executive of Norwegian state-controlled energy giant Equinor has warned that political decisions favouring green hydrogen over blue could hinder the development of a large-scale global clean-hydrogen market.

Anders Opedal told this week’s IP Week conference — being held virtually this year because of the coronavirus pandemic — that Equinor is “excited about the potential of hydrogen and carbon capture and storage”.

But he argued that political decisions putting blue hydrogen (produced from natural gas linked to CCS) at a disadvantage to green (made through electrolysis from renewable power), without allowing the market to drive which technology should be adopted, could lead to increased costs and slow development.

Equinor is Europe's second-largest producer of natural gas behind Russia's Gazprom, providing gas for 50 million households. The company has a vital interest in prolonging its use to avoid massive losses in revenue.

But while green hydrogen produces no CO2, making blue hydrogen from natural gas linked to CCS only can abate 95-99% of the climate killing substance.

'One risk here'

Opedal said: “There is one risk here — I see there are some politicians, some countries, that would like to make technology decisions already regarding hydrogen and CCS.

“They would like to only move forward with renewable hydrogen. I think that would be too expensive and then the transition into hydrogen might go too slow.

“So, I think it's very important now that we become very technology agnostic, allowing the market to compete with the different technologies, because I think we need all these technologies if we want to become net zero by 2050.”

Last year the European Commission unveiled a strategy to scale up renewable hydrogen, although it also said blue hydrogen could play a temporary role.

Climate activists and green parties argue that it makes no sense to build up an extremely expensive infrastructure for blue hydrogen, CCS and the pipelines for it instead of immediately going for the cleaner green hydrogen and massively support its ramp-up.

Like Equinor, Russia's Gazprom has also lobbied against a possible exclusion of blue hydrogen.

Alexander Ishkov, head of the energy efficiency and environmental unit at Gazprom, at a December 2020 conference lashed out on the terminology used to define how hydrogen could be produced — grey, blue and green hydrogen — as "discriminatory" Recharge's sister publication Upstream reported.

BP aiming for 10% share

BP chief executive Bernard Looney also told IP Week that the UK supermajor would be aiming to grab a 10% share of global clean hydrogen markets once they become properly developed in the 2030s.

Looney said: “I think the technology that’s got the most potential in the medium to longer term is probably hydrogen. I do think it has the attraction of being almost like an LNG-type business in its infancy today.”

Looney said BP believes hydrogen is going to play a significant role in decarbonising industry, heating and mobility.

“BP intends to play a key role,” he said

On Tuesday, Total chief executive Patrick Pouyanne said the French supermajor has ambitions to become a significant player in the fledgling global hydrogen sector and warned that increased demand will be crucial for stimulating production at scale and for keeping a lid on costs.

Equinor's hydrogen projects

Equinor already is involved in a number of both blue and green hydrogen projects.

These include the proposed Zero Carbon Humber scheme in the UK, a blue hydrogen scheme with CCS that is aiming to decarbonise a big chunk of industry in northern England.

In December, Equinor joined the Shell-led NortH2 project in the Netherlands, which aims to produce green hydrogen from up to 10GW of offshore wind in the North Sea.

This is an adapted version of an article first published in Recharge's sister publication Upstream

Technology

'Technology agnostic': Equinor boss Opedal wants market to decide between blue and green hydrogen