FORESIGHT Climate & Energy Autumn/Winter 2023 - Teaser

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Generation renovation in Utah

E-fuels are racing to keep up

Blue hydrogen won't lie down

Shipping faces a multiple choice

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THE ROLE FOR LOW-CARBON HYDROGEN IN THE ENERGY TRANSITION

A complicated conversation FORESIGHT Climate & Energy AUTUMN/WINTER 2023

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Conversations about the energy transition almost inevitably come around to the subject of hydrogen. Some see it as a silver bullet or— to borrow an image from Michael Liebreich—a Swiss Army knife of a solution to our decarbonisation challenges. To others, however, including Liebreich himself, it is little more than a distraction from the development and deployment of other low-carbon technologies.

The appeal of incorporating hydrogen—and its derivatives—into today’s energy system is clear. On the face of it, all you need to do is swap one gas (natural fossil gas) for another (hydrogen). However, things are rarely as simple as they seem. Hydrogen comes with a myriad of challenges, which often make it an expensive and wasteful solution.

Direct electrification has long been proven to be the cheaper and more efficient option for most industries and sectors (See FORESIGHT Autumn/Winter 2020). It is from this basis that we begin our investigation into hydrogen, ammonia and other synthetic fuels.

But as we are regularly reminded, the threat of catastrophic climate breakdown grows with every day we continue to use polluting forms of energy—which still dominate in existing hydrogen production. This is why there is a worthwhile conversation to be had about decarbonising the way we make hydrogen. There are also potentially added benefits for hard-to-abate sectors where we cannot wait for direct electrification to provide viable solutions.

This is what we are trying to examine in this, the 17th special print issue of FORESIGHT Climate & Energy. Note how I have not yet touched on the spectrum of different hydrogens—preferring the “low-carbon” descriptor. Green hydrogen, produced using renewable power, is the better option from a climate perspective. But as we learn, blue hydrogen (which uses carbon capture) could be a useful bridge (page 23).

The sectors that might benefit most from the growth of a low-carbon hydrogen industry include shipping (page 46), aviation (page 30) and high-temperature applications (page 38), all of which we cover here. Yet, one common thread throughout is that there will be not just one chosen fuel. An array of options (including direct electrification and biomass-derived fuels) will be required to decarbonise these sectors before 2050. Hydrogen is no silver bullet.

It is also interesting to see the regional differences in the approach to low-carbon hydrogen. Perhaps unsurprisingly, the United States is generally more bullish than its European counterparts (page 68).

What we try to achieve within these pages is to show where hydrogen and other low-carbon derivatives may be helpful to the energy transition–and, indeed, where not (page 6)–and how to use them without hampering direct electrification efforts.

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CONTENT

MARKETS

BUSINESS

TECHNOLOGY

GREEN DELTA

FEELING BLUE

A hydrogen production and storage project in Utah is gaining attention in the United States. Its success could act as a catalyst for similar sites across North America

There are plenty of reasons to be wary of oil and gas company plans to boost low-carbon hydrogen production but experts say it could be key to the energy transition

THE COMPLEX WORLD OF ELECTROLYSERS

ANY WAY THE WIND BLOWS

Hydrogen electrolysis needs to acheive industrial scale as the world cries out for greener fuels— but it is already experiencing growing pains

The shipping sector is drifting towards decarbonisation as it tries to determine which combination of alternative fuels is best

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PAGE 23

PAGE 14

PAGE 46

POLICY

THE GREENING OF STEEL

MULTIPLE FLIGHT PLANS

A HYDROGEN ALTERNATIVE

E-FUELS IN BID TO KEEP PACE WITH BATTERIES

Synthetic e-fuels for road-going transport are racing to be competitive with more efficient alternatives

The steel sector is a key industry for the application of green hydrogen production

The aviation sector is developing several potential solutions in a bid to decarbonise. But this diversity is also a barrier with so many choices slowing progress

PAGE 38

PAGE 30

Renewable ammonia has the potential for rapid expansion.

But technical and cost challenges stand in the way PAGE 58

PAGE 6

FORESIGHT

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TEXT Sam Morgan PHOTO Porsche

POLICY

6

FORESIGHT

Synthetic electrofuels are predicted to work decarbonisation wonders in the aviation and shipping sectors. In road transport, however, experts and industry largely believe there is little room for e-fuels in the mix but the technology nonetheless has a small yet ardent fanbase

E-FUEL S IN BID TO KEEP PACE WITH BAT TERIES FORESIGHT

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POLICY

T

ransport’s CO2 output is responsible for about one-fifth of global emissions and in some areas of the world, such as Europe, emissions are trending upwards rather than downwards. This is in stark contrast to other sectors like energy generation.

According to International Energy Agency (IEA) data, about three-quarters of global transport emissions derive from road vehicles. Passenger cars, buses, taxis and motorcycles make up the lion’s share of that contribution.

Electrification has taken a sizable early lead in the race to decarbonise our roads. The IEA says that ten million electric cars were sold in 2022 and predicts that 14 million will be sold by the end of 2023.

Investment banking giant Goldman Sachs estimates that half of total global car sales will be electric by 2035 and top 60% by 2040. This still leaves a chunk of the market unaccounted for and advocates of one particular fuel technology hope to make a play for it.

DROP INS Electrofuels or e-fuels are synthetic compounds produced by combining waste CO2 with hydrogen. Manufactured versions of petrol, diesel or even jet fuel are nearly identical to products made from naturally occurring crude oil.

This means that they can be used in existing engines and distribution infrastructure. When produced using carbon capture and green electricity, the fuels can also hypothetically be labelled “carbon neutral” as no new CO2 will be released when they are combusted.

Proponents argue that they are a viable “drop-in” solution for car fleets that are already on the road or which will be manufactured ahead of internal combustion engine (ICE) sales bans that will soon enter force in many countries around the world.

While these fuels have been accepted as a potential option for the aviation and shipping sectors, which face significant decarbonisation hurdles that direct electrification cannot easily overcome, the road sector debate is much less clear-cut.

PHOTO Brad Binder

NO GO Alex Keynes with mobility group Transport & Environment, is adamant that e-fuels in road transport are a complete non-starter. “It is one of the most inefficient ways you could decarbonise road transport,” he says.

Keynes refers to the fact that efficiency losses at the various stages of e-fuels production means that, on average, around half the clean power used to manufacture them is lost. According to the Interna8

tional Council on Clean Transportation, subsequent combustion of the fuels leads to efficiency levels of around 16%. Electric vehicles achieve something around the 70% mark by comparison.

“Engine designers will have to incorporate sensors and include software that will prevent vehicles from firing up if they are fuelled incorrectly —with fossil-based fuel”

“There needs to be more targeted allocation of e-fuels. It cannot simply be used for sectors that are easy to electrify, like road transport. We see no role there at all,” says Rocio Gonzalez Sanchez at the Clean Air Task Force, a non-profit think tank.

However, Alain Mathuren from FuelsEurope, a trade body for the petroleum product industry in the EU, says e-fuels should be considered and that technological improvements will lead to efficiency gains, explaining that innovations like solar panels that can also electrolyse will make e-fuels more attractive.

“We are missing an opportunity to accelerate the uptake of sustainable fuels in road transport and the sector’s decarbonisation. The faster we bring them, the sooner people will be able to purchase and use them,” Mathuren says. FuelsEurope is a division of the European Petroleum Refiners Association.

GERMAN GAMES E-fuels were the catalyst for a mini-political crisis within the European Union in early 2023 when Germany refused to support updated CO2 emission standards from the EU that will in effect ban the sale of new ICE cars by 2035.

Germany threatened to tank the deal after it had already been agreed by other governments and lawmakers, demanding an e-fuels exemption be written into the new rules so they can be used to power new engines after the 2035 cutoff date. The veto was only lifted once the European Commission agreed to revisit the issue. The specific details of the new loophole are still being worked out as of September 2023, in particular the definition of “climate neutral” when applied to fuels.

Whether the Commission will refer to existing rules that say renewable fuels of non-biological origin FORESIGHT

Test track Premier motorsport categories are developing low-carbon fuels

POLICY

(RFNBOs) only need to provide 70% emission reductions is still a point of contention.

A Commission review of progress made towards zero-emission mobility is scheduled for 2026. Germany has already signalled that it wants to increase an existing 0.5% target for e-fuels and hydrogen in the transport sector, most of which is projected to go into aviation and shipping by 2030.

“With no technology in sight to replace fuels, we really need all the sustainable aviation fuel in the world,” Lufthansa CEO Cartsen Spohr told the Munich auto show in September 2023, quipping that Porsche’s CEO “can maybe have some for his 911”.

GOVERNMENT GOALS Despite Lufthansa being Germany’s flagship airline, its CEO’s stance on e-fuel allocation has not stopped the government from establishing even more perks for carmakers if they choose the e-fuel option.

The junior partner in the ruling government’s coalition, the liberal Free Democratic Party, aims to introduce tax breaks for motorists who use e-fuels, in a bid to jump-start the market. This will include exempting e-fuel-powered cars from vehicle taxes and extra incentives for company car fleets.

Unfortunately for Germany, the Bundesrepublik

FORESIGHT

does not have too many allies to call upon. Italy, another country known for its high-performance carmakers, backed Berlin’s EU e-fuels bid purely to try and force biofuels into the same legislation, which it ultimately failed to do.

Ahead of the Munich auto show, a German delegation only managed to convince the Czech Republic and Japan to support a declaration backing e-fuel production.

Japanese carmakers welcomed the EU e-fuels deal and auto giant Toyota, in particular, sees a role for the alternative fuel. Its CEO, Koji Sato, said earlier in 2023 that “cars with e-fuels will expand the range of options for a decarbonised energy sector including popularisation of electric vehicles”.

Neither Japan’s enthusiasm nor Europe’s collective uncertainty about e-fuels in road transport is reflected across the Atlantic. According to the International Council on Clean Transportation’s Stephanie Searle, there is “relatively little debate” about the issue in the United States. “So far, there do not seem to be any serious efforts to incorporate e-fuels into light- and heavy-duty greenhouse gas standards,” she adds. President Joe Biden’s Inflation Reduction Act appears to have had little impact on that particular sector so far.

9

TECHNOLOGY

THE COMPLE X WORLD OF

ELEC TRO LYSERS Hydrogen electrolysis is scrambling to achieve industrial scale as the world cries out for greener fuels—but the technology is already starting to experience growing pains

ESTABLISHED CONCEPT While the hydrogen electrolyser market may be young, the principles underpinning the technology date back to the late 1700s.

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Early investigators into the then-novel field of electricity realised electric currents could be used to split compounds into their constituent elements. One such reaction, first performed in 1800, splits water into oxygen and hydrogen. This discovery led to the development of the first hydrogen electrolysers.

It was almost a century before they were built in any numbers and at the time the dominant application was to get chlorine from brine rather than hydrogen from water.

Only in the 20th century did the electrolysis of water become an industrial concern. The process used hydro electricity to create hydrogen that could be combined with nitrogen to form ammonia-based fertilisers.

HYDROGEN PRODUCTION Just as it was gaining traction, however, electrolysis was superseded by a more cost-effective way of producing hydrogen, called steam methane reforming.

This involves breaking methane into hydrogen and carbon.

For decades, industrial production of hydrogen has relied on steam methane reforming and another process, coal gasification, with little regard for their FORESIGHT

Made in China Like many other clean energy sectors, the electrolyser market is dominated

by Chinese manufacturers

TEXT Jason Deign ILLUSTRATION Bernardo França

T

here was a point early in 2021 when investors in UK-based hydrogen electrolyser maker ITM Power must have thought they had stumbled upon the next Tesla. After languishing at less than £50 for more than a decade, the UK company’s share price ballooned more than tenfold in just 14 months, then went on to top £680 per share.

For investors following ITM Power’s products, it seemed the time for electrolysers had come, but the rise, likely fuelled by mounting interest in hydrogen’s decarbonisation potential, proved relatively shortlived. ITM Power’s shares failed to progress beyond their high and were pottering around £80-100 in the third quarter of 2023.

The hype surrounding electrolysers remains high but has also been tempered by growing awareness of the complexities of the technology—along with concerns prompted by the hiccups typical of a nascent, fast-growing market.

carbon impacts. Yet these are significant: steam methane reforming produces up to ten times more carbon than hydrogen, and coal gasification can produce up to 20 times more.

As awareness of carbon’s role in climate change has increased, these carbon emissions have come under scrutiny.

At the same time, interest in hydrogen has grown. It is increasingly viewed as an energy carrier and feedstock that could replace fossil fuels in many applications, such as fertiliser production and long-term energy storage, which are hard to decarbonise by other means, such as direct electrification.

gen made through steam methane reforming or coal gasification. The carbon emissions from these processes completely nullify any climate benefits the switch to hydrogen combustion could offer.

Hence there is increasing interest in a return to electrolysis, using electricity generated by renewable energy plants. The massive growth prospects for this “green” hydrogen—analyst firm BloombergNEF estimates almost 30 million tonnes of the gas could be in play worldwide by 2030—has got plant developers seeking to learn about electrolysers.

ELECTROLYSIS DEMAND

What they are finding is that the term “electrolyser” covers a broad family of technologies, each with pros and cons, and conceals marked differences in product pricing and reliability between manufacturers.

By far the most established version of the technology is alkaline electrolysis, which uses a solution of potassium hydroxide or sodium hydroxide electrolyte to speed the dissociation of water. As the most mature technology, already used in industrial chloralkali processes to make chlorine and caustic soda, alkaline is also the most cost-effective form of electrolysis.

Western manufacturers Thyssenkrupp and Nel of Nor-

The UK’s Royal Society, the country’s national academy of sciences, urged the government to “kick-start the construction of large-scale hydrogen storage facilities if it is to meet its pledge that all electricity will come from low-carbon sources by 2035”.

Meanwhile, a host of startups, such as Lydian, OXCCU and Twelve, are looking to combine hydrogen with atmospheric carbon to make so-called e-fuels, which could cut emissions from transport sectors such as aviation (page 30) or shipping (page 46).

Evidently, it does not make sense to do this with hydroFORESIGHT

BROAD FAMILY

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TECHNOLOGY

Electolyser cost breakdown Low-end brenchmark of Capex for alkaline electrolysis systems in China, 2021

Civil enginering: $19 / 6%

Electrolyser stack: $99 / 33%

Equipment installation: $29 / 10% Housing: $33 / 11%

EPC: $81 / 27%

Stack: $99 / 33%

Total $303/kW

Non-stack equipment: $123 / 40%

SOURCE: BLOOMBERGNEF. NOTE: SYSTEM SIZE IS 10 MW.

Rectifier: $7 / 2%

Alkaline solution supply: $7 / 2%

Transformer: $23 / 7%

Gas/liquid separation: $32 / 11%

Control cabinet: $23 / 8%

Gas purification: $30 / 10%

The figure shows the structure of a 10 MW alkaline electrolysis system in China in 2021. Quite often, such a system has two pressurized 5 MW electrolyzer stacks that yield 16 bar output. The electrolyser manufacturer also provides an EPC-level turnkey solution, including all equipment pieces and their installation. Due to the wide variation in the range of product type and development process in Europe and the US, we are unable to show a cost structure for the Western case with a high-level consensus. However, the lowest capex for alkaline electrolysers in 2021 is consistently reported to be around $1200/k/W.

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FORESIGHT

TECHNOLOGY

way have won contracts for delivery of alkaline electrolysis technology between 2023 and 2025 with equipment priced at $500 per kilowatt of capacity.

These prices include the electrolyser stack and balance-of-stack (BoS) assets such as liquid-gas separation and lye supply and purification systems, according to BloombergNEF. However, there are already alkaline electrolysis systems that are already less than half this price in China.

CHEAPER OPTION Chinese manufacturer Peric has bid just $190 per kilowatt for an electrolysis system—including stack and BoS—due for delivery in 2023. Other Chinese vendors are not far behind on costs, BloombergNEF data shows.

Partly this difference is down to lower labour costs in China, but Chinese manufacturers also benefit from a more established supply chain for upstream components and materials, says BloombergNEF’s Xiaoting Wang. Chinese manufacturers not only have the lowest prices but also dominate the alkaline electrolyser market in terms of established manufacturing capacity.

BloombergNEF figures show seven of the world’s ten largest alkaline electrolyser manufacturers in 2023 are Chinese brands. Chinese companies are also leading in terms of delivery. BloombergNEF expects about two gigawatts (GW) of electrolyser capacity to be shipped in 2023, 65% of which would be made in China, including production in factories owned by European brands.

For example, one of the largest green hydrogen plants in the world today, the Advanced Clean Energy Storage project in the United States (page 69), will be using electrolysers that are from a Norwegian company but made in China.

MARKET PENETRATION China's dominance in alkaline electrolysis is due less to international penetration than the fact that China is the world's largest electrolyser market and international suppliers cannot win over domestic players there.

Western markets, meanwhile, have yet to take off.

Things should only really get going in Europe after its first hydrogen-specific auction, in November 2023, while in the US work is still ongoing on a definition of green hydrogen eligible for tax credits that were outlined in its 2022 Inflation Reduction Act. Furthermore, many Chinese manufacturers aiming to sell abroad “don’t have an international sales record, which means it’s risky to purchase their products”, says Wang.

Plus, she says, until recently most Chinese firms FORESIGHT

lacked the CE mark needed for compliance with European Union legislation, which limited their export potential. As of August 2023, around half a dozen Chinese companies had secured the mark.

ALKALINE CHALLENGES Two further challenges facing China’s manufacturers are the potential impact of trade restrictions on Chinese products and the prospect of high operations and maintenance costs if engineering teams need to travel from China.

Additionally, alkaline electrolysers face a further hurdle irrespective of whether they are made in China or not. Traditional alkaline electrolysers operate at high temperatures and need to warm up before reaching maximum rates of production, a process that can take around 20 minutes at 25ºC, according to the Italian electrolyser manufacturer Enapter.

During this ramping-up phase, the purity of hydrogen tends to be too low to be of use, so the gas is just released into the atmosphere.

A 20-minute ramp-up time is no problem for electrolysers with a stable source of electricity—such as hydroelectric or grid supplies—since the systems can run at a constant rate. However, it is not ideal for the growing number of green hydrogen projects that rely on variable renewable power from wind or solar plants.

ALTERNATIVE TECHNOLOGIES Developers of such projects are therefore looking at alternative electrolyser technologies, particularly those based on proton exchange membrane (PEM) electrolysis.

In PEM electrolysis, which was introduced by US company General Electric in the 1960s, a platinum cathode and an iridium anode are separated by a solid polymer electrolyte. The technology requires more energy and higher-purity water than alkaline electrolysis but also produces higher-quality hydrogen.

Since it does not require high operating temperatures, PEM also boasts much faster start times and ramp-up speeds than alkaline electrolysis. BloombergNEF cites manufacturer Plug Power as boasting a warm start in 30 seconds and a cold start of five minutes.

FASTER STARTS Siemens Energy PEM equipment, meanwhile, is said to achieve a cold start in one minute and able to ramp up or down by 10% of its nameplate current every second.

Furthermore, says Chingis Idrissov of analyst firm IDTechEx, with PEM technology, “You’re able to operate at low electric loads without major impacts to the purity of hydrogen.”

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FORESIGHT

BUSINESS

FEELING There are plenty of reasons to be wary of oil and gas company plans to boost low-carbon hydrogen production but experts say it could be key to the energy transition

BLUE

FORESIGHT

The oil company wants to make as much as 28 million cubic meters of blue hydrogen a day at Baytown, using it to fuel olefin production in a move ExxonMobil says will cut the complex’s scope 1 and 2 carbon emissions by up to 30%. Olefins are often used in the manufacture of products like plastics, detergents, adhesives, rubbers or packaging.

IMPORTANT TOOL Hydrogen is often seen as a key tool for decarbonisation roadmaps because it could replace fossil fuels in a range of applications, from powering ships (page 46) and aircraft (page 30) to driving industrial processes such as those at Baytown.

Currently, however, a lot of hydrogen production is highly polluting. Around three-quarters of today’s hydrogen is supplied via steam methane reforming.

This involves breaking up methane, the most common ingredient of natural gas, and produces up to ten molecules of CO2 for each one of hydrogen. The resulting production is known as grey hydrogen.

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TEXT Jason Deign ILLUSTRATION Bernardo França

T

he Baytown Complex, sprawling across 14 square kilometres of Houston Ship Channel coastline in Texas, United States, is a monument to fossil fuel excess. Opened in 1919, today it processes up to 588,000 barrels of crude per day. At a rate of 0.43 tonnes of CO2 per barrel, based on US Environmental Protection Agency figures, that equates to more than 250,000 tonnes of climate-changing carbon a day or more than 92 million tonnes a year.

Yet operator ExxonMobil, ranked as the world’s fourth-largest carbon polluter in a 2019 study by the US Climate Accountability Institute, says it wants to turn the Baytown Complex into a pillar of the low-carbon economy. The key to this unlikely transformation, which ExxonMobil is due to make a final investment decision on in 2024, is blue hydrogen.

Blue hydrogen’s name has nothing to do with its hue. Like all other kinds of hydrogen, it is colourless.

Instead, blue is shorthand for the way the hydrogen is made and it is a process that is not free of controversy.

BUSINESS

Hydrogen production on the rise

50,000,000.00 40,000,000.00 30,000,000.00 20,000,000.00

d an 19 20

GREEN HYDROGEN

Much of the remaining production involves a process called coal gasification (black hydrogen), which is even more polluting, emitting up to 20 times more CO2 than hydrogen. Because of this, the race is on to scale up lower-emissions hydrogen production methods. One option is to get hydrogen from water, using a process called electrolysis that can be powered by renewable electricity—so-called “green hydrogen”.

CAPTURING EMISSIONS Another option is to carry on producing hydrogen through steam methane reforming but to capture and store the carbon emissions so they cannot contribute to climate change. Hydrogen produced this way is termed “blue hydrogen”.

On paper, blue hydrogen sounds promising because it relies on two processes—steam methane reforming and carbon capture and storage (CCS)— which have been around for a long time and are familiar to industry. Due to this, industrial gas producers and oil and gas companies such as ExxonMobil are confident that they can scale up blue hydrogen production quickly.

Producing low-carbon hydrogen with established industrial technologies still has an impact on costs.

The cost of different types of hydrogen depends on a range of variables, with green hydrogen’s price large24

BLUE HYDROGEN

TOTAL

SOURCE: BLOOMBERGNEF

30 20

29 20

28 20

27 20

26 20

25 20

24 20

23 20

22 20

21 20

20 20

e-

20

19

10,000,000.00

pr

Production capacity (metric tons)

The growth of hydrogen production capacity is expected to rise quickly as 2030 approaches

ly set by the cost of renewable electricity and electrolysis equipment. Both these variables are coming down in price but for now, green hydrogen remains a costly proposition compared to the traditional, highly polluting version of the gas production process.

PRICE ADVANTAGE “Grey” supplies can be made for around $1 per kilogramme, according to the Platts hydrogen price wall, an information service from S&P Global, a market intelligence provider.

Meanwhile, green hydrogen made via proton exchange membrane electrolysis, an electrolyser technology widely used with renewable energy [page 14], ranges in price from around $3 to $7 per kilo, based on data from September 2023. Blue hydrogen is between these two extremes, with a price range of between $2 and $4 per kilo, so it would appear to be a useful addition to the low-carbon energy toolbox.

There are doubts over its role, however. The most important of these is whether blue hydrogen will end up cutting emissions by as much as its proponents claim. One of the keys to blue hydrogen’s emissions footprint is the efficiency of the carbon capture and storage technologies used—and while these have been around since the early 1970s, they have a patchy track record.

FORESIGHT

Setting standards Adithya Bhashyam from BloombergNEF believes upstream emissions need to be monitored closely for blue hydrogen to be considered low-carbon

BUSINESS

UNTRIED CAPABILITIES

Energy transition Oil and gas companies are interested in blue hydrogen as a new revenue source for their plants

Even with world-class carbon capture systems, the greenhouse gas reduction seen in today’s blue hydrogen plants—which make up just around 1% of total supplies of the gas—is not much over 60%. This is because the carbon capture only relates to post-combustion flue gases and not to the gas that is burned to create heat required for steam methane reforming.

Blue hydrogen project promoters are banking on being able to capture pre-combustion emissions as well, which could cut the greenhouse gas footprint

FORESIGHT

by more than 90%. UK-based equipment maker Johnson Matthey is commercialising a blue hydrogen production stack that it claims could achieve up to a 99% reduction in emissions compared to unabated steam methane reforming.

The problem is that the stack has yet to be deployed at scale. Instead, “Technologies today capture about 50-60% of the carbon,” says Zeynep Kurban of GHD, a global engineering firm. Even assuming the carbon capture systems work as well as expected, they will not be able to deal with the emissions produced by natural gas before it enters the steam methane reforming process.

METHANE LEAKAGE When natural gas is extracted and transported, significant amounts of it can leak into the atmosphere.

Although it gradually breaks down, with a half-life of roughly seven years, the greenhouse gas effect of methane is 100 times more powerful than that of CO2.

Concerns over methane leakage have prompted researchers to question the climate impact of blue hy-

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ILLUSTRATION Bernardo França

A 2020 survey of 39 US carbon capture and storage projects found that four in five had ended in failure.

In the UK, meanwhile, a 2017 investigation by government watchdog the National Audit Office concluded the technology was not viable without government support.

In 2021, Australia’s largest carbon capture and storage project, owned by the oil company Chevron, was fined by regulators after failing to meet its emissions reductions by an estimated 48%.

TEXT Sarah McArthur ILLUSTRATION Bernardo França

tional nature of the sector. It is difficult to calculate the emissions of CO2, water vapour and other GHGs, and to attribute responsibility for these global emissions to national governments.

Alternatives to kerosene-powered engines need to be lightweight, powerful and resilient to very intensive use. Updating technology in the aviation industry is a slow process, due to the long working lifespan of aircraft, which can be in service for three decades before being replaced.

NEW HORIZONS There are many possibilities for emissions reduction in aviation. Improving fuel efficiency in existing aircraft, using sustainable combustible fuels and electrification are all options being explored, as well as a vaFORESIGHT

riety of policies to reduce flight demand. The current assumption of lawmakers is that sustainable aviation fuels (SAFs) are the only solution which will be operationally feasible—the IATA is counting on SAFs for 62% of CO2 reductions by 2050.

ZeroAvia, a British-American startup, is challenging this assumption with a powertrain based on a hydrogen fuel cell and a strategy for integrating it into the aviation industry.

Founded in 2018, ZeroAvia has made rapid progress towards hydrogen-powered flight. The company sent a six-seat hydrogen-powered aircraft into the air in 2019. In early 2023, its 19-seat Dorner 228 became the world’s largest aircraft powered by a hydrogen fuel cell.

The 250-strong team already has partnerships 31

with aviation and fuel giants like British Airways, American Airlines and Shell. The company argues that hydrogen fuel cell power is the best and most cost-effective solution for aviation in the long term and that the transition to a hydrogen-based system can start now.

“Ultimately [electrification] is the destination,” says James McMicking from ZeroAvia. “How long it takes to get there is another matter.”

PROMISING BUT EXPENSIVE To some, hydrogen has advantages as an energy carrier. Production of “green hydrogen” can be completely emissions-free when produced through electrolysis of water powered by renewable electricity. When used in a combustion engine, hydrogen produces water vapour and nitrous oxide, and if used in fuel cells it emits nothing at all.

The key sticking point for hydrogen is the cost of

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production. Green hydrogen is expensive to produce and hydrogen can be acquired more cheaply from hydrocarbons—either fossil fuels (creating “grey hydrogen”) or sequestered hydrocarbon sources (known as “blue hydrogen”). A poorly managed increase in demand for hydrogen might push demand for grey and blue hydrogen, achieving little in terms of emissions reduction.

ZeroAvia argues that hydrogen fuel cells are superior to all other options for sustainable flying: be it battery-electric, hydrogen-combustion or SAFs. Hydrogen fuel cells can eliminate CO2, nitrous oxide, water vapour and contrails, the company says.

The Proton-exchange Membrane (PEM) fuel cell used in ZeroAvia’s powertrain takes a zero-emissions fuel (such as green hydrogen) and converts it back to electricity, which, when fed into a powerful enough motor, can get a plane off the ground without any emissions at all.

FORESIGHT

In the mix Jet fuels are increasingly a mix of traditional fossilbased kerosene and more sustainable alternatives

ILLUSTRATION Bernardo França

TECHNOLOGY

TECHNOLOGY

PHOTO ZeroAvia

Take off A hydrogenpowered aircraft being trialled in the UK

While batteries have provided an efficient solution for zero-emissions cars, current models are simply too heavy to get a sizeable plane off the ground for any length of time. Batteries also require long recharging periods so would struggle to keep up with the intensity of use—planes are often turned around and refuelled in as little as 30 minutes between journeys in traditional flight-plan models.

SAFs are derived from biomass or waste products such as agricultural residues or municipal waste, or produced using hydrogen and sequestered carbon.

According to the IATA roadmap to net zero, most demand for green hydrogen will be for producing SAFs. Besides reduced contrails, the tailpipe GHG emissions from SAFs are similar to those of kerosene combustion (emissions for the whole lifecycle of SAFs are much lower). However, the process of SAF production minimises carbon emissions and the CO2 emitted by the combusted SAF is biogenic so can be FORESIGHT

considered as zero in GHG calculations. A significant advantage of SAFs is that they can be “dropped in” to existing aircraft, existing fossil jet fuels and the existing air transport systems with little to no adjustment.

NEXT STEPS ZeroAvia is aiming to produce powertrains for 80-seat aircraft, with a range roughly the length of the UK (about 1000 kilometres), by 2027. This will make it possible to electrify a lot of regional aviation, says McMicking.

However, international aviation accounts for a much higher share of emissions, due to the higher distances covered. McMicking believes that ZeroAvia has already identified a feasible path toward developing a powertrain which can power jet engines for longer distances. He explains that the challenge is two-fold.

First, a larger aircraft requires a motor with a 33

BUSINESS Green hydrogen is set to have a significant role in decarbonising the steel industry. Policies are essential to help close the cost gap with production methods relying on fossil fuels and ensure that green steel plants come online in the next few years. Emerging Power-to-X technologies, in particular iron ore electrolysis, could also play a part

New horizons The H2 Green Steel plant in Boden, Sweden, will produce lowcarbon steel by 2026

TEXT Heather O'Brian PHOTO H2

THE

GREENING STEEL OF

BUSINESS

S

wedish firm H2 Green Steel will ship its first steel produced with the use of green hydrogen to customers in early 2026 if all goes according to plan. A combination of Swedish hydropower and wind energy will provide the electricity needed for the giga-scale electrolyser to split water into hydrogen and oxygen at the steel plant’s site in Boden, Sweden. As a result, the company expects its steel will produce up to 95% less carbon emissions compared to traditional production methods.

The plant is slated to begin with annual production of 2.5 million tonnes of green steel before this is bumped up to some five million tonnes by the end of the decade. The power used to run the electrolyser will initially come from the Swedish grid, where the high share of cheap renewables also helps to bolster the business case. “We think we can run the electrolyser with a high utilisation of 8000 hours a year, bringing the levelised cost down,” says Kajsa Ryttberg-Wallgren of H2 Green Steel.

Construction of the first buildings at the Boden site is underway and H2 Green Steel has been busy checking off the boxes for the roughly €5.3 billion investment. These include sourcing iron ore for steel production; reaching green steel supply deals with automakers, construction product producers, white goods companies and other customers; raising €1.8 billion with investors and securing €3.5 billion in debt from banks.

PHOTO Åsa Bäcklin

MORE BANG FOR THE BUCK About two billion tonnes of steel are produced globally each year, accounting for some 7-9% of global CO2 emissions. There is a growing consensus that renewable hydrogen used to heat individual buildings or to fuel passenger cars is a waste of limited resources—direct electrification is more efficient and cost-effective in those cases.

But decarbonising steel production represents a “no-regrets application”, says Julian Somers at Agora Industry, a think tank. “Steel is a sector in which you can get the most climate bang for your buck from renewable hydrogen,” he says.

About 70% of steel produced today is done through an emission-intensive process that involves blast furnaces and coking coal. In the blast furnace, coal is used as a heat source but also serves to “reduce” the iron ore, removing oxygen to produce molten iron. The carbon from the coal connects with the oxygen and “you get a huge amount of CO2”, says Ryttberg-Wallgren.

The molten iron that comes out of the blast furnace is then put into a basic oxygen furnace (BOF), where it is often mixed with some scrap metal and 40

oxygen is injected to lower the carbon content to the required level for the steel grade produced.

HYDROGEN-BASED PROCESS The most commercially advanced alternative for decarbonising primary steel production, and that which is being pursued at H2 Green Steel’s Boden plant, involves the use of green hydrogen in what is known as a direct reduced iron (DRI) process. DRI technology dates back decades and the process accounts for about 5% of the steel produced today, with the fuel and reducing agent of choice traditionally being either natural gas or coal.

However, DRI plants can also operate using hydrogen, offering a pathway for decarbonisation. When hydrogen is used instead of coking coal to reduce iron ore, the byproduct is water rather than carbon dioxide, meaning that CO2 emissions can be almost entirely eliminated if hydrogen produced via renewable energy is used, explains Somers.

DRI plants are frequently coupled with electric arc furnaces (EAF), as iron emerging from the DRI shaft is in a solid state and must be heated up to complete the steel production process. In Sweden, H2 Green Steel is “taking technology that is mature and scaling it up, so the issue is how to optimise it”, says Ryttberg-Wallgren.

Starting point Kajsa RyttbergWallgren is in charge of taking the blueprint from H2 Green Steel’s Boden plant and replicating it elsewhere

“Steel is a sector in which you can get the most climate bang for your buck from renewable hydrogen”

“All the technologies needed to do 100% hydrogen DRI have been on the market since the 1970s, but nobody had combined them,” says Chris Bataille of Columbia University's Centre on Global Energy Policy.

“It is not something you would have done [if ] there was not a value in eliminating greenhouse gas emissions in steelmaking,” he adds.

THE HYDROGEN PUSH Electric arc furnaces fed with scrap steel account for about 25% of total steel production. The production method comes with emissions that are a small fraction of traditional steelmaking and will continue to fall as the emissions intensity of grids decreases.

Bataille expects the share of steel production from electric arc furnaces using recycled scrap will roughly double, to about 45-50% of total production by mid-century, particularly as more scrap becomes FORESIGHT

BUSINESS

Green shoots The Hybrit site delivered its first green steel in 2021 to Volvo

available in fast-growing economies like India and China.

“There isn’t enough scrap to meet all demand for steel, so we need to decarbonise primary steel production,” says Jeffrey Rissman of Energy Innovation, a think tank. “This is behind the push for hydrogen-based DRI.” In a sustainable development scenario laid out in its 2020 technology roadmap for iron and steel, the International Energy Agency (IEA) envisages one electrolytic hydrogen-based DRI plant will be built each month after the technology’s market introduction, forecast for 2030. In a faster innovative scenario, two 100% hydrogen-based DRI plants will be built each month following market introduction in 2026.

The IEA’s updated 2023 roadmap for net zero emissions sees hydrogen based-DRI and iron elec-

trolysis, which is at an earlier stage of development, together accounting for 58% of primary steel production in 2050. A further 37% would be fossil-fuel-based production with carbon capture and storage (CCS), which means 95% of primary steel production will be “near-zero emission”.

Material efficiency, or producing the same products with less steel will also play a part in decarbonising the sector.

EUROPEAN LEADERS The European Union is the world’s second-largest producer of steel behind China and the bloc’s steelmakers are leading efforts to produce steel using renewable hydrogen.

The phase-out of free European Union Emission Trading System (EU ETS) allowances for EU steel-

TECHNOLOGY

ANY WAY THE WIND BLOWS

I

n September 2023, the French media flew into a frenzy when Prime Minister Elisabeth Borne and education minister Gabriel Attal celebrated the return to school after the summer holidays by hopping on a plane from Paris to Rennes (and back again), when they could have done the same trip by train in 90 minutes, or simply visited pupils in the French capital. Known as “Flygskam” or “flight shaming” in Sweden, this anti-flying movement that began in 2019 has, in Europe at least, become part of societal debate.

In 2022, aviation and shipping each accounted for around 2% of global energy-related CO2 emissions, the International Energy Agency (IEA) estimates. Yet, while flying can trigger negative headlines, society pays less attention to the climate impact of the imported goods we consume.

In his book The Ministry for the Future, published in 2020, US novelist Kim Stanley Robinson imagines how we could be living in the coming years as the effects of climate change take hold. In it, shipping is 46

FORESIGHT

singled out as one of the last sectors to decarbonise (though aviation is just as slow). Indeed, in Stanley Robinson’s fictional world, the suggestion is that the sector only began to shift away from fossil fuels “after several years of container ships being sunk on a regular basis, taken out by drone torpedoes of ever-increasing speed and power”, launched by radical climate activists.

“They weren’t going to be able to stop the saboteur,” writes Stanley Robinson. “Maersk and MSC (a Swiss company) both began to rebuild their fleets and all the big shipyards followed. It was that or die.”

ART IMITATES LIFE Stanley Robinson imagines a future where smaller vessels running on electric motors powered by solar panels “mounted as giant roofs over the top of the cargo” replace huge ships propelled by diesel engines and clipper ships make a comeback. “The new versions had sails made of photovoltaic fabrics that captured both wind and light, and the solar-generat-

TEXT Philippa Nuttall ILLUSTRATION Bernardo França

The shipping sector is drifting towards decarbonisation as it tries to determine which combination of alternative fuels is best

ed electricity created by them transferred down the masts to motors that turned propellers,” he writes.

Despite the absence of public scrutiny, and without any violent persuasion, some shipbuilders are already starting to think about how to decarbonise their fleets and have put plans in place to make this happen. While the distant future may turn out to be solar and sails, currently the most favoured way to create a cleaner shipping sector is to replace petroleum products with greener fuels, say industry experts.

There remain, however, various obstacles that must be overcome before shipping can reduce its climate impact.

LONG ROAD AHEAD More than 95% of ships operational in the world today are powered by internal combustion engines that run on high-emitting heavy fuel oil, marine gas oil and marine diesel oil.

Research examining how the sector can reduce its emissions is led by the Copenhagen-based Mærsk FORESIGHT

Mc-Kinney Møller Centre for Zero Carbon Shipping, a not-for-profit research centre set up in 2020. It works with industry, academic and government experts in the energy and shipping sectors with the aim of the shipping industry becoming net-zero by 2050.

Today, the shipping industry uses around 300 million tonnes of fossil fuel oil a year to produce around 12.6 exajoules (EJ) of energy, says the Centre’s latest maritime decarbonisation strategy, published in December 2022. This amount of fuel emits more than one gigatonne of greenhouse gas emissions.

For the maritime industry to come in line with the commitment of the 2015 Paris Agreement to keep global heating below 1.5°C above pre-industrial levels, the sector must “reduce its emissions by 45% in 2030 compared with 2010 levels, thereby limiting the fossil fuel consumption of the global fleet to about 6 EJ in 2030 and reaching net zero by 2050,” says the decarbonisation strategy.

Central to making this vision a reality is the replacement of fossil fuel oil with low greenhouse gas 47

TECHNOLOGY

alternatives, says the Mærsk Mc-Kinney Møller Centre. The main alternatives, it cites, are “biomethane, e-methane [from green hydrogen and captured CO2], bio-methanol, e-methanol, blue ammonia [from blue hydrogen with carbon capture and storage], e-ammonia [from green hydrogen and nitrogen pulled from the atmosphere], bio-oils, and e-diesel.” The Centre insists the future will not see a one-size-fits-all-solution, but instead, shipping will rely on “multiple fuels”.

The decarbonisation strategy acknowledges that hydrogen is seen as a low-carbon solution by some maritime companies. It, however, dismisses hydrogen as a serious contender for long-haul marine traffic given its “low volumetric energy density, resulting impact on deck and cargo space, high pressure and low-temperature storage requirements, and flammability concerns”.

The Mærsk Mc-Kinney Møller Centre comes to a similar conclusion about the viability of direct electrification. “Factors including the low energy densities of battery packs, large onboard space requirements and high costs render electrification unviable for long-haul marine traffic,” states the report. Sail and solar power, as per Stanley Robinson’s imaginings, are also not considered as technological replacements for fossil fuels by the centre.

MULTI-FUEL FUTURE The Centre’s decarbonisation strategy was followed in April 2023 by the publication of a report based on a survey carried out with 29 major shipping companies to garner their thoughts about greening their fleets.

The theory of a multi-fuel future was, indeed, borne out by the companies’ responses, which also showed

Changing attitudes Industry players are increasingly expecting to use a mix of energy carriers in their fleets

PART OF FUTURE MIX? 2020

2022

LNG (fossil in transition, bio/syn end-state)

CHANGE

SOURCE: SHELL

(% participants indicating yes)

METHANOL Bio, blue, green Growing industry confidence for bio- and synthetic LNG methanol, ammonia1 and bio

AMMONIA Blue, green

HFO (incl. LSFO, VLSFO, MDO, MGO)

LIQUID H2 Blue, green BIO HFO

ELECTRIC

CARBON-BASED FUEL 1

48

RESULTS FOR AMMONIA ARE CONDITIONAL ON IF A SOLUTION IS FOUND FOR THE SIGNIFICANT TOXICITY CHALLENGE

FORESIGHT

TECHNOLOGY

Green fuels uptake pathways for European shipping E-fuels such as e-ammonia can reach up to 7% of EU shipping’s energy demand by 2030, if coupled with efficiency measures

7.1%

7% 6%

5.6%

5%

4.9% 4.1%

4%

3.3%

3%

2.9% 2.3%

2% 1.3%

1% 0

0 2024

0.4%

2025

SCENARIO 1 NO ENERGY EFFECIENCY WITH E-FUEL PENETRATION

1.7 %

0.8%

2026

2027

2028

SCENARIO 2 HIGH ENERGY EFFECIENCY WITH E-FUEL PENETRATION

that many are starting to dip their toe into the waters of greener fuels.

Of the surveyed companies, 46% said they had already run pilot programmes involving one or more low-carbon fuels, though 35% said they had taken no action regarding greener fuels.

Exactly how this multi-fuel future will play out, however, looks a little confusing. One-third of respondents to the survey said they “don’t know” which types of fuel they expect their fleets to run on in 2030 and 2050. The remaining respondents suggested two-thirds of their fuel consumption in 2030 would still be fuel oil, with biodiesel and liquefied natural gas representing 10% each, and the rest a mixture of other fuels.

FORESIGHT

2029

2030

SCENARIO 3 LOW ENERGY EFFECIENCY WITH E-FUEL PENETRATION

SOURCE: T&E

Alternative fuel needs as a share fuel demand

8%

By 2050, green ammonia, biodiesel and fuel oil will all have a 16-17% share of the fuel mix, with blue ammonia, Liquified Natural Gas, e-methanol, bio-methanol, biomethane and e-methane each taking a 6-10% share, according to the survey’s results.

“The most striking result from the survey is that shipping companies expressed a need to prepare for fleets that simultaneously run on three or more families of fuels,” states the report summarising the findings.

Such a scenario “need not cause paralysis” in moving to net-zero emissions, concludes the report, but it does mean the sector must “think strategically about when to introduce each fuel family to the fleet, how to create optionality in the fleet through dual-fuel and 49

TECHNOLOGY

Efficiency and e-fuels

0.0%

-2.4%

-5%

-3.6%

-4.8%

-5.8%

-6.9%

-10% -15%

-9.0% -9.2%

-10.7 %

-16.0%

-18.4%

-20%

-16.3% -22.8%

-25%

-27.4%

-27.8%

-30% -35%

-37.3%

-40%

-41.6%

-45% -50% -55% -60% 2018

SCENARIO 1 NO EFFICIENCY/ HIGH E-FUELS

2019

2020

2021

2022

2024

2025

SCENARIO 1 NO EFFICIENCY/HIGH E-FUELS - COST-EFFICIENT MEASURES ONLY

tri-fuel designs and the reconsideration of networks and operating profiles to match the availability of fuels”.

In short, the decarbonisation of the maritime industry will not be an easy ride.

PICK AND CHOOSE Putra Adhiguna at the Institute for Energy Economics and Financial Analysis (IEEFA), a think tank, agrees the future of maritime technology is tricky to forecast. “The jury is still out,” he says. “It is not clear which technology will prevail.” He names ammonia, methanol and biofuels as being the hottest contenders. “Hydrogen is out there, but at a less advanced stage,” Adhiguna adds. As for direct electrification, China is developing inland electric ships, he says, but 52

2023

2026

2027

2028

SCENARIO 2 HIGH EFFICIENCY/ HIGH E-FUELS

2029

2030

SCENARIO 3 LOW EFFICIENCY/ HIGH E-FUELS

the “distance travelled for most of electric ships is less than 100 kilometres”, Adhiguna says .

The Swedish-Swiss multinational ABB has developed an electric propulsion technology, known as Azipod, which it says can help all types of ships, including cargo vessels, to reduce fuel consumption by up to 20% and lower emissions. However, as ABB’s Jostein Bogen explains, the electrification of vessels is focused today at least on smaller, short-haul ferries, rather than vast container ships.

Faig Abbasov, shipping director at Transport and Environment (T&E), a not-for-profit organisation, insists “the technology is there” for the industry to transition to a more cleaner future. “We have the ship-side technology and the fuel-side technology,” he says. “We know how to produce biofuels and e-fuFORESIGHT

SOURCE: T&E

0

Note: Vessel energy efficiency are expressed as: for RoRo/Ro-pax - kWh/GT-nm; for passenger (cruise) ships - kWh/pax-nm; for container ships - kWh/cargo_tonne-nm; for all other ships types - kWh/DWT-nm; Passenger (cruise) ships use different units and are thus not included in the graph above. T&E analysis based on EU MRW and IMO 4th GHG Study.

Vessel energy efficiency improvements below 2018 baseline

Fleet-wide energy efficiency can improve by 41% between 2018 and 2030, supported by the introduction of e-fuels

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Destination unknown Shipping's fuel future remains unclear but decarbonisation is at its heart

options. “The notion of technology-neutral might sound flexible, but in the long-term it makes things worse,” says Abbasov.

“We need to start short-listing. Some companies understand this and are making their bets. We advise them to rely on sustainable and scalable fuels, this means e-fuels and some biofuels, and to be mindful of the costs of certain e-fuels,” Abbasov adds. He calls on investors to carry out due diligence “to see which fuels are most cost competitive” to meet legislative demands.

Sylvain Verdier from Topsoe, a Danish company specialising in decarbonisation technologies warns, “Shipping is one of the most conservative industries,” which, despite recent and positive statements about its desire to decarbonise remains “a world of its own”.

He questions its enthusiasm for change.

“The shipping industry has been used to cheap fuels,” says Verdier. “Are they willing to pay five times more for e-fuels?” In the shorter term, at least, he is betting on biofuels, such as FAME produced from waste oils and fats, to play a larger role.

“Later on, biocrudes from solid biogenic waste will possibly be deployed as well, as they are a dropin solution,” he adds. “It is a myth that e-fuels will solve everything,” insists Verdier. “We need all sustainable solutions. Biofuels are available now and can be sustainable if they are produced from waste. I think people are underestimating biofuels.”

COST PREDICTION Verdier is likewise sceptical that ship owners will necessarily stick to pledges to prefer “green” e-fuels over “blue” when the reality of potential price differentials hits home. “We can produce low-carbon intensity blue fuels such as blue ammonia,” says Verdier.

“What is important is how we certify them and FORESIGHT

what rules are introduced. Some ship owners claim they will mostly use e-fuels, such as green ammonia or green methanol, but the price and availability of such fuels in the coming years might change such statements,” he adds. As to future cost trends, Verdier says, “the price and availability of e-fuels in 2030 are hard to predict”.

In addition to the likely higher price of green e-fuels, Verdier suggests the criteria for certifying them as such could also be a stumbling block. “In the EU, the rules are very strict,” he says. “The easy option is to produce e-fuels in country where the share of renewable energy exceeds 90%. But which countries are reaching this right now? Sweden?”

Analysis by the Mærsk Mc-Kinney Møller Centre from June 2023 suggests access to renewable electricity for synthetic fuel production will be limited for several years. “As a result, we expect supplies of e-fuels for the maritime sector will be limited in the 2030s and possibly 2040s,” it concludes. “Shipowners should be wary of relying on e-fuels alone for decarbonisation.”

“We need all solutions, there is no silver bullet,” says Verdier.

“Of course, green fuels are quite a bit more expensive,” adds Mazhari. She believes that in the not-toodistant future, all companies will have to engage with the need to decarbonise and that being out in front is the best place to be. “Lots of regulatory and technical changes are coming together to make an opportunity space. There will be a price to pay for your emissions.

The sooner you decarbonise the better vis-a-vis your business and your customers.”

The decarbonisation of shipping will “not be a single watershed moment like the ending of sales of internal combustion engines” for cars, forecasts Abbasov, but a “slow, gradual process”. • 57

TECHNOLOGY

A HYDROGEN A LTERN ATIVE Renewable ammonia has the potential for rapid expansion.

But technical and cost challenges stand in the way

58

FORESIGHT

A

hydrogen feedstock and the energy to power the process of combining hydrogen with nitrogen, known as the Haber-Bosch process. The sector as a whole produces almost 1.8% of global CO2 emissions annually.

Green ammonia—also known as renewable ammonia or e-ammonia—is chemically the same compound but uses a CO2 emission-free production method. It is made using renewable electricity, water and nitrogen separated from air. It has the potential to help decarbonise industries already using ammonia, notably agriculture, which relies on it to manufacture fertilisers.

Today, 70% of ammonia is used by the fertiliser industry, according to the International Energy Agency (IEA).

TEXT Catherine Early ILLUSTRATION Bernardo França

mmonia made from renewable energy is nothing new—it has been produced at an industrial scale since the 1920s, with hydropower electricity powering alkaline electrolysers. While only one renewable ammonia plant, in Peru, remains in commercial operation since natural gas took over as the dominant feedstock in the 1940s, more than 50 plants are now planned.

Ammonia is a compound of nitrogen and hydrogen. In an industrial context, it is mostly used as agricultural fertiliser, but also for refrigeration, pharmaceuticals, textiles and explosives. Almost all ammonia produced today uses natural gas or coal for both the

FORESIGHT

59

TEXT Ros Davidson ILLUSTRATION Bernardo França

MARKETS A hydrogen production and storage project in Utah is gaining attention in the United States.

Its success could act as a catalyst for similar sites across North America

GREEN DELTA

W La la land Much of the clean power from the new Delta project will make its way to Los Angeles

ith its sunshine, palm trees and beaches, Los Angeles hardly seems like a metropolis that relies on coal-fired generation. Yet California’s largest city gets almost a fifth of its electricity from the Intermountain Power Plant (IPP), a large coal-fired facility on the edge of the remote desert village of Delta, hundreds of kilometres to the northeast in central Utah.

LA’s electricity profile, however, is set to change dramatically starting in 2025.

All eyes are now on two new projects in Delta, which would reduce Los Angeles’ reliance on the dirtiest of fossil fuels. The twin projects could eventually replace coal power with electricity 100% generated from green hydrogen.

The first phase of the large Power-to-X project—the Advanced Clean Energy Storage (ACES) Delta hub— is already under construction. The ACES Delta joint venture is majority-owned by oil company Chevron’s New Energies division, with the remainder owned by Mitsubishi Power.

Starting in 2025, wind- and solar-generated electricity will run 220 megawatts (MW) of electrolysers, FORESIGHT

with the resulting “green” hydrogen stored for dispatch in two underground salt caverns that are the height of the 102-storey Empire State Building. The capacity of the salt caverns is 4.5 million barrels apiece, mid-sized compared with salt caverns globally.

BLENDED OPTIONS All of the hydrogen from this first phase of ACES Delta is spoken for, at least initially. Across the road from the hydrogen storage project is IPP, with its smokestack towering over the parched streets of Delta.

In May 2025, the 1800 MW site will cease coal power production and instead start to sell power to LA and other communities from two new natural gas combined-cycle power generators nearby on the 18.67 square kilometre site.

The new 840 MW combined-cycle plant will initially run on a blend of hydrogen—from the adjacent hydrogen storage caverns—and natural gas. This plant, currently under construction, is named IPP Renewed.

At first, IPP Renewed’s gas turbines will run on 30% hydrogen by volume and 70% natural gas. By 2045, IPP Renewed will operate on 100% hydrogen.

“The 100% hydrogen by 2045 is a goal that requires 69

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