Hydrogen Hustle: A Look Inside How Top Energy Companies are Strategizing

Hydrogen’s Role in Industrial Decarbonization for Energy Companies

Hydrogen plays a crucial role in decarbonizing heavy industries such as chemicals, cement, and steel. These sectors traditionally rely on carbon-intensive fuels like coal, diesel, and kerosene. Hydrogen emerges as an optimal replacement due to its high energy density and low emissions profile.

ExxonMobil’s Baytown, Texas facility exemplifies a large-scale application of blue hydrogen in emission-heavy sectors. Through hydrogen and ammonia production with over 98% CO₂ capture, the project aims to reduce site-wide CO₂ emissions by up to 30%. Their collaboration with Air Liquide ensures a steady supply of oxygen and nitrogen, supporting ExxonMobil’s goal of net-zero emissions by 2050.

Verdagy Inc., based in Silicon Valley, focuses on green hydrogen production using advanced alkaline water electrolysis powered by renewable energy. Their strategic collaborations with industrial giants such as Doral and Samsung indicate strong potential for scaling up. Verdagy’s modular electrolyser systems address key cost concerns, aiming for a production cost of $2/kg by 2026, aligning with DOE targets.

The transportation sector also benefits from hydrogen, particularly in aviation, shipping, and trucking. Hydrogen, via combustion or fuel cells, provides a zero-emission alternative crucial for reducing GHGs in long-haul and heavy-duty transport.

Versatility of Hydrogen

• Light industries
• Domestic applications
• Buses and cars
• Cargo cranes
• Building heating

BayoTech’s model of utilizing biomethane for hydrogen production highlights a decentralized, lower-carbon approach to tackling emissions at the community level.

The DOE’s hydrogen hubs underscore the strategic importance placed on hydrogen. Projects like the HyVelocity Hub on the Gulf Coast showcase how coordinated efforts can advance hydrogen infrastructure. The integration of hydrogen production centers, dedicated pipelines, and job creation indicates a comprehensive approach to embedding hydrogen into the energy transition.

California’s substantial investments in hydrogen hubs, particularly for green hydrogen, reinforce hydrogen’s critical role in sustainable development. The state’s ambitious targets for expanding hydrogen generation and reducing diesel-related health impacts further emphasize this importance.

Blue vs. Green Hydrogen: Cost and Feasibility

Blue hydrogen and green hydrogen present distinct cost structures, production processes, and environmental impacts. Blue hydrogen, derived from natural gas through steam methane reforming (SMR), currently costs approximately $2-5/kg. The process involves reforming methane into hydrogen and carbon dioxide (CO₂), with the CO₂ byproduct captured and sequestered to earn the “low-carbon” label.

Green hydrogen, produced through water electrolysis powered by renewable energy sources, achieves a zero-carbon status but currently bears a higher price tag of $4.5-12/kg. This is primarily due to the cost of renewable energy and current electrolyser technologies.

“The U.S. Department of Energy (DOE) has set a target to bring hydrogen costs down to $2/kg. Achieving this will require advancements in technology and scalability for both blue and green hydrogen production methods.”

Blue hydrogen benefits from existing natural gas infrastructure and relative ease of obtaining methane. ExxonMobil’s Baytown project demonstrates this advantage, with integrated facilities capable of storing and transporting hydrogen.

Green hydrogen, while facing costlier production challenges, holds the promise of a truly sustainable energy future, especially when aligned with renewable power sources. Verdagy’s innovative approach to electrolysis demonstrates the potential to bring costs down to the DOE’s target by 2026.

Environmental Impacts

• Blue hydrogen: Concerns about methane leakage
• Green hydrogen: Minimal environmental footprint, dependent on purified water and renewable energy

Both forms of hydrogen have roles to play in different contexts. Blue hydrogen offers a near-term solution for large-scale industrial decarbonization, while green hydrogen represents a long-term vision aligned with global sustainability goals. Balancing investments in both technologies will be critical to ensure immediate reductions in GHG emissions while fostering the growth of a sustainable hydrogen infrastructure.

Verdagy’s Approach to Green Hydrogen Innovation

Verdagy leads green hydrogen innovation with its advanced alkaline water electrolysis (AWE) systems, addressing capital and operational cost challenges that have historically impeded the scalability of green hydrogen production.

Their AWE systems combine mature, cost-effective electrolysis with large, single-element electrolyser cells utilizing sophisticated membranes. The Moss Landing plant in California, a 2 MW operation, has been operational for 12,000 hours over roughly three years, consistently working on reducing both capital and operational expenditures.

Key Collaborations

• Samsung Engineering: Accelerating deployment of infrastructure-scale hydrogen projects
• Shell and Doral: Realizing large-scale hydrogen infrastructure projects, including a 20 MW electrolyser system

Verdagy’s goal aligns with the U.S. Department of Energy (DOE) to reach a levelized cost of $2/kg of hydrogen by 2026. Their modular design concept, particularly the 20 MW eDynamic electrolyser, is capable of scaling up to 400 MW. Their innovative approach ensures that electrolyser cells can be refurbished rather than replaced, significantly cutting down maintenance costs and boosting long-term operational efficiency.

Through technological innovation and strategic collaboration, Verdagy exemplifies a scalable and efficient approach to green hydrogen production, positioning the company as a key player in global green hydrogen infrastructure development.

ExxonMobil’s Hydrogen Ventures and Strategic Impacts

ExxonMobil’s hydrogen ventures are exemplified by the ambitious projects at their Baytown complex near Houston, Texas. The facility is being retrofitted to produce 1 billion cubic feet of hydrogen per day and 1 million tonnes of ammonia annually, while capturing and sequestering over 98% of the associated CO₂ emissions. This output will serve ExxonMobil’s own olefin production and potentially supply other industrial customers, supporting decarbonization efforts across various sectors.¹

A key component of ExxonMobil’s strategy is its collaboration with Air Liquide, focusing on producing low-carbon hydrogen and ammonia at Baytown. Air Liquide will construct four large modular air separation units, providing oxygen and nitrogen critical for the hydrogen production process. The integration of low-carbon electricity to power these units further enhances the project’s environmental credentials.

ExxonMobil’s participation in the HyVelocity Hub, a DOE-funded hydrogen initiative, demonstrates their strategic foresight and collaborative approach. This hub aims to explore hydrogen production and infrastructure along the U.S. Gulf Coast, with a network of forty-eight hydrogen production centers supported by an extensive 1,000-mile hydrogen pipeline.

Economic Implications

• Potential job creation: Up to 10,000 permanent positions
• Global reach: Plans to export blue ammonia to Japan (deal with JERA)

ExxonMobil’s initiatives demonstrate a comprehensive approach to enhancing the hydrogen economy. By focusing on large-scale blue hydrogen production and integrating CCS to mitigate emissions, they are addressing immediate industrial decarbonization while paving the way for a sustainable hydrogen market. Their efforts contribute significantly to reducing the overall cost of hydrogen production, moving closer to DOE targets and ensuring hydrogen’s pivotal role in the transition to a lower-carbon future.