Full Title: Clean Hydrogen: A Versatile Tool for Decarbonization
Author(s): Galen Hiltbrand, Whitney Herndon, Eric G. O'Rear, John Larsen
Publisher(s): Rhodium Group
Publication Date: September 9, 2021
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As Congress considers policy support for hydrogen technologies, it is essential to understand the distinction between how we use hydrogen today and the role of hydrogen in a decarbonized US economy. Hydrogen currently plays a crucial function in our economy, primarily as an industrial feedstock. Nearly all of today’s supply is from steam methane reformation, an emissions-intensive form of hydrogen production made from natural gas. Retrofitting these facilities with carbon capture is important for near-term carbon emissions reductions. Carbon capture is a cost-effective and commercial technology that can abate nearly 40 million metric tons (MMt) of CO2 emissions per year that current hydrogen facilities would otherwise emit.
While carbon capture minimizes the industry’s present carbon emissions, emerging forms of clean hydrogen (such as hydrogen produced from water via electrolysis) will play a prominent role in long-term decarbonization. Clean hydrogen has three primary applications in a decarbonized economy: energy storage and load balancing, as a feedstock, and as a fuel. These applications occur in all sectors, including transportation, industry, agriculture, and power. Due to its versatility and scalability, clean hydrogen could be a game changer in economy-wide decarbonization.
However, because steam methane reformation is cheap, it will be difficult for clean hydrogen to be competitive without policy support. In order to accelerate clean hydrogen and solidify US leadership on this emerging technology, Congress should pursue new policies and enhancements to existing policies that can bolster deployment. In this note, we discuss the decarbonization and economic benefits of clean hydrogen and assess policy options for scaling it up. We also assess the benefits of and policy options for retrofitting existing hydrogen facilities with carbon capture.