“Greener-than-green hydrogen” costing the same as grey H2 from unabated fossil fuels is set to be produced at a record-breaking facility in California by the end of 2022, in what could be a game changer for the rapidly developing sector.

Washington DC-based start-up SGH2 — emerging from stealth mode today ­— says its method of extracting hydrogen from waste, using plasma torches, will produce H2 at $2 per kilogram — five to six times cheaper than standard green hydrogen from renewables and at the same cost as the cheapest grey hydrogen available today (see costs panel below).

SGH2 describes its hydrogen as “greener than green” as it uses biomass-based waste that would otherwise rot in landfills and emit methane, a greenhouse gas 84 times more potent than CO2 over a 20-year period. It thus calculates its carbon intensity as negative 188kg of CO2 equivalent per megajoule, compared to 20kg for coal-derived H2 and zero for standard green hydrogen.

SGH2’s first commercial project, due to start construction near Los Angeles in the first quarter of next year, will have a three times larger output than any other green-hydrogen project this decade, the company states, producing 3,800 tonnes of H2 a year.

This claim is slightly contentious as several larger green hydrogen projects have been announced, including the Asian Renewable Energy Hub in Australia, which aims to generate an enormous amount of hydrogen from 12GW of wind and solar power, starting in 2027.

But SGH2 chief executive Dr Robert Do (pronounced ‘doe’) tells Recharge that his plasma-enhanced gasification plant will be the world’s largest because the other announced projects are more like wishful thinking — without funding and without buyers for its output. “There’s all these projections, but nobody has a real project going,” he says.

The $55m facility in the California city of Lancaster, which will use mixed recycled paper as its feedstock, is due to be fully operational by the end of 2022, with the hydrogen being sold to vehicle refuelling stations in the state.

Costs: green vs grey vs blue

Because clean hydrogen is not being produced anywhere at scale, and the price of electricity and natural gas is so variable, it is hard to put a figure on how much it costs to produce — either via renewables (by splitting water molecules into hydrogen and oxygen using an electric current), known as green hydrogen, or via natural gas with its emissions captured and stored (or used), which is referred to as blue hydrogen.

SGH2 says it uses calculations from engineer Fluor for comparable hydrogen-production pricing, which puts the cost of electrolytic green hydrogen at $10-13 per kg, grey hydrogen (from unabated fossil fuels) at $2-6/kg, and blue hydrogen at $6-10/kg.

Trade body Hydrogen Europe says green hydrogen from wind or solar power costs about $11-16 per kg today, although it adds that this cost could halve by 2023-25.

The International Energy Agency is far more bullish, putting the cost of grey hydrogen at “generally around” $1.50-3 per kg, and as low as $1/kg in the Middle East, with blue hydrogen at $1.40-1.50 “in the most promising regions” and green hydrogen from PV or onshore wind “generally around” $2.50-6.00 per kg.

All the electricity required by the plant, including the plasma torches, will be generated onsite by burning carbon monoxide — a by-product of its proprietary process (see below).

The facility will be built by US engineer Fluor and operated by Fluor subsidiary Stork 24 hours a day, 365 days a year, processing 40,000 tonnes of waste annually.

How the technology works

The key to SGH2’s process — which has been developed over a 20-year period ­— is the use of plasma torches to produce temperatures of up to 4,000°C, with the intense heat reducing all solids to gases, leaving not even ash behind.

Oxygen-enriched air is injected into a catalyst-bed chamber heated by four plasma torches; when the solid waste feedstock is added, it immediately disintegrates into a mixture of gases, about 90% of which is a combination of hydrogen and carbon monoxide (CO) known as “syngas”. The remaining 10% of gases, including other elements such as chlorine and sulphur, are filtered out using gas scrubbers, and the H2 and CO are then separated. The CO is then burned to generate electricity for the process, producing carbon dioxide.

This CO2 can be captured and then used or stored, reducing the process’ carbon intensity even further, but at the Lancaster facility, it will be released into the air. These emissions are considered to be “carbon neutral” as the CO2 came from trees (or plants) that absorbed it from the air.

Only a small amount of electricity is needed to power the plasma torches (2kWh per kg of H2) as the reaction of carbon and oxygen is highly exothermic (ie, heat-releasing), which alone produces temperatures of up to 2,000°C, meaning that the plasma torches only “top up” the heat.

Any type of hydrogen-rich waste, including plastics and medical waste, can be handled by the technology, but each plant needs to be fine-tuned according to the particular type of waste stream to optimise efficiency and remove the relevant impurities.

SGH2’s parent company, Solena Group, ran a demonstration project in Pennsylvania for seven years — which was the same size as the Lancaster plant “so there’s no scale-up risk” — testing “basically every waste stream you can look at”, including coal, lignite, plastics and municipal waste, Dr Do explains.

“We can now determine how we operate [for each waste stream] to maximise the hydrogen [output], so we can control the pressure, control the temperature, control the amount of oxygen and we can modulate the system and design it accordingly.”

The plasma torches were developed at Nasa by scientist Salvador Camacho, a co-founder of the Solena Group, in order to test spacecraft heat shields and thereby ensure astronauts’ safe re-entry into the Earth’s atmosphere.

Costs could be even lower

Dr Do — a biophysicist and former medical doctor — admits that the cost of SGH2’s hydrogen would be even cheaper if the company accepted payment, the so-called tipping fee, for receiving the waste.

For instance, fellow California waste-to-hydrogen company Ways2H recently told Recharge that it could keep the price of its H2 low (to $5/kg today and $3/kg within five years) because it receives tipping fees of around $70/kg for the waste it uses.

But Dr Do is fundamentally opposed to companies being paid to take waste.

“We don't charge for the waste feedstock. To me, the key issue to the global problem of handling waste is the tipping fee,” he tells Recharge, explaining that a lot of rubbish around the world is not processed because municipalities cannot afford to pay a third party to take it off their hands.

“We look at it as a valuable product. People have to sort this material, they have to bring it to the recycling centre, they have to transport it to us, but it’s a fuel. If you can get fuel for zero cost and our competitors have to buy coal or natural gas, that’s already a huge help.”

For SGH2’s first project, the city of Lancaster will provide the recycled paper, and actually receive an indirect income for it as the municipality is a project partner. An independent recycling company will provide back-up feedstock as required to ensure the plant is operating around the clock.

SGH2’s expansion plans

SGH2 plans to replicate its Lancaster plant in a cookie-cutter style around the world close to hydrogen users, with “at least one or two other projects” being kickstarted next year, to be completed in 2023-24.

“Every project will be built at the exact same size… we think that this well enable us to build faster and cheaper,” says Dr Do, describing the size as the company’s “standard module”.

“The problem with bigger plants is that it’s like going back to the old way of running energy where you have massive plant, there’s going to be a NIMBY [not in my backyard] problem, nobody wants to have a massive plant in their backyard. And then you have to locate yourself in the middle of nowhere, and have long-distance trucking,

“These are small, distributed [plants] and the investment is small. I mean, $55m for this investment is very small compared to massive plants. And if there's a place where they need three times more [hydrogen], we simply build three units next to each other.”

SGH2 says it is already in negotiations to build new plants in 13 other countries: France, Saudi Arabia, Ukraine, Greece, Japan, South Korea, Poland, Turkey, Russia, China, Brazil, Australia and Malaysia.

Dr Do tells Recharge that a lot of these discussions are subject to non-disclosure agreements, so he can’t talk about many of them — but he did disclose that talks were under way with the world’s largest cement producer, Switzerland’s LafargeHolcim; Malaysian shipping company Halim Mazmin Group; the “largest waste company in Ukraine”; and a gas supplier in Australia that wants to inject hydrogen into the natural-gas grid.

Cement is a huge climate problem, estimated by the International Energy Agency to be responsible for about 8% of global carbon emissions.

“We are discussing [with LafargeHolcim] to build our plant next to a cement plant, because one kilo of hydrogen has 141 megajoules [of energy], whereby coal [which is used to produce the high-temperature heat required for cement production] only has 30 megajoules per kilo, which means that a kilo of hydrogen can replace five kilos of coal,” says Dr Do. “So imagine how many tonnes of emissions they can save.

“In Malaysia we are dealing with the owner of the largest shipping company over there and they are looking at us using palm waste; what is called ‘empty fruit bunches’. Palm is a huge issue, generates a lot of biomass. They've got millions of [empty fruit bunches] lying around, which they burn. So that would be an incredible biomass resource.”

Fluor is lined up to build all future projects, with Stork operating and maintaining them, and SGH2 retaining ownership and overall responsibility for the technology. “We provide a 100% guarantee on the performance of the plant, and a 100% guarantee on the technology,” says Dr Do.

With clean-burning gas able to help decarbonise multiple sectors, including heating, transport and heavy industry — and the need to replace the 70 million tonnes of hydrogen already produced each year from natural gas and coal — the demand for low-price clean H2 is immense.

SGH2 believes that the scale of the demand cannot be met from electrolytic green hydrogen, which he says, necessitates huge offshore wind farms or vast swathes of solar panels in deserts where there is no water for the electrolysis process. Hydrogen from waste would therefore be a better solution.

“Every country in the world has waste problems,” he tells Recharge.

“To give you an example, the largest recycler in California is handling 60,000 tonnes of recycled materials a month, and we need 40,000 tonnes a year [at our Lancaster facility] — we can build ten more plants in the region without a problem. So you can imagine how massive the waste market is.

“I just want to build as many green hydrogen plants to decarbonise as much as we can.”

About SGH2 and Solena Group

Dr Robert Do and his Solena Group spent six years working with British Airways on synthetic aviation fuel derived via hydrogen from waste, until a fall in the price of oil in 2014 meant that their London-based project was no longer financially viable.

SGH2 is wholly owned by the Solena Group, which is majority-owned by Dr Do, with minority stakes being held by venture capitalists, institutional investors and the company’s management team.

Solena was formed after Dr Do, a medical doctor and biophysicist, met Nasa scientist Salvador Camacho, who developed a high-temperature plasma torch to test spacecraft heat shields. This technology was further refined at the Solena Group.

The initial company, Solena precursor Global Plasma Systems, was set up to focus on safe disposal of medical waste. But as the pair developed the technology, it became apparent that the ability to produce large amounts of hydrogen was a more appropriate focus for the company.

Over two decades, Solena has raised more than $50m to develop its SPEG (Solena plasma-enhanced gasification) technology, which it now licenses exclusively to SGH2.