Decarbonisation Technology November Issue

November 2022 Decarbonisati n Technolo gy Powering the Transition to Sustainable Fuels & Energy

CARBON CAPTURE IS VITAL

CARBON INTENSITY OF HYDROGEN EU SAF DEMAND

WASTE - AS FEEDSTOCK

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ACCELERATING DECARBONISATION TOGETHER

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Decarbonisation Solutions

Contents

November 2022

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RefuelEU regulation will drive demand for SAF in Europe Robin Nelson Consulting Editor

11 If hydrogen is the answer to energy security, let’s talk carbon, not colour Maurits van Tol CTO, Johnson Matthey

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Why blue hydrogen provides a de-risked decarbonisation lever Mario Graca Shell Catalysts & Technologies

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Carbon capture, utilisation and storage in the energy transition Mike Hemsley Energy Transitions Commission

31

DMX CO 2 capture technology: an industrial demonstration Christian Streicher Axens

37

Near- and long-term options for decarbonising steel production Joachim von Schéele Linde

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The heat-pump way to more sustainability Rasmus Rubycz Atlas Copco Gas and Process

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Creating value from wastes to help achieve net zero Mark Whittle Greenergy

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Conversion to a green refinery Scott Sayles and Robert Ohmes Becht

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Roadmap to decarbonisation Henrik Larsen KBR

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Artificial intelligence drives the way to net zero Aaron Yeardley Tunley Engineering

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Process gas analyser for measuring hydrogen concentration Airat Amerov and Michael Gaura AMETEK Process Instruments

81 Decarbonising fired process heaters with zero-emission electric heat James Lewis Chromalox

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Where energies make tomorrow

Inspiring a cleaner future

©HafslundOsloCelsio

Technip Energies is a leading engineering and technology company for the energy transition. Leveraging a 50-year track record, we support a more sustainable world by driving the decarbonization of the industry with best-in-class technologies, proven experience and ground -breaking CO2 management strategies. With continuous advancements, we offer our clients competitive and at-scale carbon capture solutions to derisk investment and enhance project affordability. At Technip Energies, we inspire a cleaner tomorrow by reducing carbon emissions today.

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A lot can happen in a year. Early in 2022, the relaxation in Covid restrictions led to a surge in energy demand, then the invasion of Ukraine created a restriction in supply, the combination of which led to increased energy bills for consumers. The short-term economic outlook is gloomy, with a general rise in the cost of living and a re-emergence of inflation accompanied by higher interest rates. The war also emphasised our ongoing dependence on fossil energy sources. The social and economic impact of climate change is ever more clear, with record summer temperatures, drought, and wildfires throughout much of Europe, the overwhelming floods from abnormal monsoons in Pakistan, and annual, severe storms in the US. Billions have been invested in renewable energy sources and infrastructure, but it is clear that a fundamental change to the global energy system will require further trillions over the next 25 years. The current economic environment emphasises the need for a managed and progressive transition which balances the switch to renewables with energy security and affordability. Regulatory drivers need to balance ambition with realism. In this edition, there is a preview of the demand that will ensue from the forthcoming ReFuelEU regulation for sustainable aviation fuels (SAF) within Europe. While the details will emerge from the current Trialogue negotiations between the EU Commission, Parliament, and the Council of Europe, the direction is already clear. This regulation, as part of the ‘Fit for 55’ package, will drive the development and commercial scale-up of biofuels and e-fuels in Europe. In this issue, Johnson Matthey argues the case for technology-agnostic, low-carbon hydrogen standards, allowing the selection of the optimum solution for specific situations. In a similar vein, Shell discusses the need for both green and blue to meet the increasing demand for hydrogen. The Energy Transition Commission introduces its new report on the role of CCUS in the energy transition, touching on the importance of CO₂ removals from the atmosphere as well as the decarbonisation of industrial sectors that are otherwise difficult to decarbonise. Linde outlines development in the decarbonisation of steel production. The high temperatures required rule out full electrification, creating a strong case for hydrogen. While blue hydrogen currently has a cost advantage over green hydrogen, gasification of waste streams, such as municipal solid waste to produce syngas, could be even more cost competitive. There is increasing interest in the refining industry in waste as a feedstock. Greenergy’s Green Tyre Technology Project, which converts waste tyres into transport fuels, is a clear example of rethinking the energy system. Becht outlines different phases in the transition to a green refinery. Energy efficiency remains one of the most cost- effective options, as illustrated in the article on heat pumps to recover and reuse waste energy from current processes.

Managing Editor Rachel Storry

rachel.storry@emap.com tel +44 (0)7786 136440

Consulting Editor Robin Nelson robin.nelson@ decarbonisationtechnology.com

Graphics Peter Harper

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Business Development Director Paul Mason info@decarbonisationtechnology.com tel +44 844 5888 771

Managing Director Richard Watts richard.watts@emap.com

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Cover Story Twilight refinery

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RefuelEU regulation will drive demand for SAF in Europe RefuelEU is the first step on the long road to decarbonise aviation and will have a significant impact on the evolution of demand for SAF in Europe

Robin Nelson Consulting Editor

T he European Union’s ReFuelEU Trialogue negotiations between the three EU Institutions (EU Commission, Parliament and the Council of European Union) which started in September 2022. European aviation fuel suppliers will have two years to prepare, then from 2025 will be required to blend a minimum volume percentage of SAF in the aviation fuel supply. The mandated levels increase in steps every five years and include separate targets for the share of sustainable biofuels (biojet) and synthetic aviation fuels (e-kerosene) (see Figure 1 ). Biofuel components must meet the sustainability and greenhouse gas emissions criteria in the EU’s Renewable Energy Directive (RED-II) and be certified in accordance with the regulation is planned to come into effect from 1 January 2023, following the directive (European Commission, 2022). Although the EU Parliament proposed more ambitious targets for e-kerosene, the Council of Europe support the Commissions proposed targets, as shown in Figure 1, and subject to the Trialogue negotiations. These negotiations will also align on the feedstocks allowed for biojet and for e-kerosene. The ReFuelEU regulation is considered an important regulatory stimulus for the ongoing development and commercial scale- up of technologies to produce sustainable aviation fuels. Scandinavian countries have set autonomous targets, mandating a minimum volume of SAF of 5% by 2025 and 30% by 2030 in their aviation fuel supply.

Biojet E-kerosene

28%

11%

8%

0% e-kero

5%

35%

27%

2% biojet

24%

15%

5% 0.70%

2025

2030

2040

2045

2050

2035

European aviation kerosene demand in 2019, before the Covid-19 pandemic. The European Commission’s impact assessment for the RefuelEU regulation shows jet fuel demand for the EU-27 growing from 38 million tonnes (Mt) in 2010 (EU-27) to 50 Mt by 2050 in the base case scenarios (European Commission, 2021). This compares with 2019 actual demand in the EU-27 at 46 Mt (39.5 Mt international, 6.5 Mt domestic) (Eurostat, 2022a), (Eurostat, 2022b). Including UK demand at 12 Mt and Norway at 0.9 Mt results in a total European jet fuel demand of 59 Mt in 2019 (see Figure 2 ). Impact of Covid-19 on aviation fuel demand in 2020-21 The dramatic curtailment in air travel during the Covid-19 pandemic resulted in a 55% fall in demand for aviation fuel in the EU-27 in 2020 (see Figure 2). In turn, the lower demand resulted in a zero to negative jet-fuel margin for most of 2020 into 2021. The International Air Figure 1 Minimum shares for biojet and e-kerosene in aviation blends under ReFuelEU

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mid, high and low scenarios (ICAO, 2021), are summarised in Table 1 . IEA Energy Scenarios The IEA lays out pathways for global aviation that are consistent either with its Sustainable Development Scenario, which aims to limit the increase in average temperature to 1.8ºC, or its more recent Net Zero Emissions (NZE) Scenario, which limits the increase in average temperature to 1.5ºC (IEA, 2021). Fuel efficiency improvements The ICAO scenarios look at growth in air traffic using passenger and freight volumes. Fuel efficiency improvements can temper the impact of traffic growth on fuel demand. In 2010 ICAO adopted a goal for an average 2% annual fuel efficiency improvement in international aviation. The IEA notes that the aviation industry achieved an average 2.4% fuel efficiency improvement between 2000 and 2010, then 1.9% between 2010 and 2019 (IEA, 2022). ICAO considers that the introduction of new aircraft with hybrid engines, along with other efficiency-enhancing features, could help achieve its target over the next decades. In the near term, the economic pain felt by the industry during the pandemic meant that while fleet owners took older, less efficient aircraft out of service, they also postponed purchases of the latest and most efficient aircraft. European scenarios for SAF demand This section draws on three of the published scenarios, the IEA NZE and SDS and the ICAO High Growth Scenarios, to explore how demand for SAF could evolve, should the levels proposed by the Commission by adopted. Whilst the analysis described in this article is based on published scenarios, neither IEA nor ICAO were approached to endorse the subsequent analysis for Europe. To avoid

50.00

EU-27

45.93

45.25

40.00

Norway UK

30.00

25.40

20.00

20.33

12.37

12.23

10.00

0.34 4.97

4.68

0.88

0.85

0.33

0

2018

2019

2020

2021

Transport Association (IATA) reported global passenger traffic had started to recover to 40% of 2019 levels in 2021 and 61% in 2022 (IATA, 2022a). Global demand for air cargo or freight was more robust during this period, with demand in 2022 expected to be 13% above 2019 levels (IATA, 2021). The Air Transport Action Group (ATAG), in its Waypoint 2050 study, estimates air traffic demand globally is not likely to fully recover to 2019 levels until 2024 (ATAG, 2020). European air traffic in the first six months of 2022 had recovered to nearly 80% compared with the same period in 2019 (IATA, 2022a), (IATA, 2022b). We are living in a time when the risks of disruptions such as the Covid-19 pandemic, worsening impacts of climate change, prolongation or escalation of conflicts, and economic recession are all too real. While scenarios can help, any exploration of future demand over a 25-year duration should include a note of caution. ICAO aviation growth scenarios The International Civil Aviation Organisation (ICAO) has published three scenarios looking at growth in passenger and freight traffic, post- Covid-19, with projections towards 2050. The growth forecasts for Europe, within the ICAO Figure 2 2019-21 demand collapse due to Covid-19 travel restrictions Data sources: (Eurostat, 2022a), (Eurostat, 2022b), (ONSS, 2022)

Europe

Pre-Covid

Post-Covid

ICAO Scenario

Mid

High

Mid

Low

Passenger (RPK)

3.0%

3.1%

2.7%

2.3%

Freight (FTK)

3.0%

2.4%

1.9%

1.5%

Table 1 ICAO traffic growth forecasts for Europe (Revenue Passenger-KM and Freight Tonne-KM)

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Scenario

Air traffic demand growth

Fuel efficiency gain

Fuel demand change

EU-27 NZE: Net Zero Emissions

1.8%

2.0%

-0.2%

EU-27 SD: Sustainable Development

2.3%

1.9%

0.4%

EU-27 HG: High Growth

3.1%

1.9%

1.2%

Table 2 Average annual development in air traffic, fuel efficiency, and fuel demand

any misperception, the European scenarios are identified as EU-27 NZE, EU-27 SD, and EU-27 HG. UK focus is on domestic aviation As the UK is following an independent strategy for aviation decarbonisation, UK figures are excluded from this analysis of the impact of EU regulation. The UK’s ‘Jet Zero’ strategy commits to net-zero emissions in UK domestic aviation by 2040 (UK Government, 2022), while the ReFuelEU regulation includes international departures from EU airports. The average annual change in fuel demand under the three scenarios in Table 2 was used to explore the future demand for biojet and e-kerosene determined by the ReFuelEU mandate levels, assuming traffic demand in the EU will have fully recovered by 2025. In the EU-27 NZE scenario , the average annual growth in aviation traffic in the EU is reduced to 1.8% a year. Plausible changes in consumer behaviour that would be consistent with this scenario include a lower level of growth in business travel due to the normalisation of video conferencing, mainly for internal but also for a share of business- to-business meetings. Additionally, the EU and national governments could put in place measures to encourage a shift away from short- haul domestic travel to rail, such as more direct city-to city rail links. Other factors that may contribute to a reduced rate of growth in passenger air traffic include a protracted higher cost of energy, higher inflation, and a consequential economic downturn. Efficiency gains in aircraft and in-flight management operations help realise the ICAO target average annual gain in fuel efficiency of 2% over the duration. Normalisation of operating

procedures, such as the use of electric tractors for taxying on ground, also contribute. Hybrid aircraft are introduced widely. Even though alternative fuels such as electric and hydrogen become viable for short-haul flights, they are not deployed in sufficient numbers to have a significant impact on overall demand by 2050. Consequently, as shown in Figure 3 , despite a small growth in air traffic, overall demand for aviation fuels in Europe declines over the period 2025 to 2050 by an average 0.2% per year. Demand for SAF components grows from 1 to 16 Mt biojet and from zero to 13 Mt e-kerosene, in compliance with the ReFuelEU mandated levels. Conventional jet fuel declines to 17 Mt by 2050. In the EU-27 SD scenario, overall aviation fuel demand increases due to growth in aviation of 2.3% per year, while average annual energy efficiency gains remain slightly under ICAO’s target of 2% at 1.9%. Improvements in fuel efficiency help offset the additional cost of SAF over conventional jet fuels. Conventional jet demand reduces to 22 Mt by 2050, with biojet reaching 21 Mt and e-kerosene 16 Mt (see Figure 4 ).

0

0.3 2.4

2

0.9

4

5

7

13

11

12

16

45

43

36

31

28

17

2025

2030

2035

2040

2045

2050

Conventional

Biojet

e-kerosene

Figure 3 EU-27 NZE scenario: aviation fuel demand by type (million tonnes)

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Conventional

Biojet

e-kerosene

Conventional

Biojet

e-kerosene

6

4

16

0.3

3

0

8

23

2.6

0.9

8

16 5

13

15

9 3

20

0.4

2.7

0

21

0.9

28

41

45

45

36

45

46

45

35

48

44

30

22

2025

2030

2035

2040

2045

2050

2025

2030

2035

2040

2045

2050

Figure 5 EU-27 HG scenario: aviation fuel demand by type (million tonnes)

Figure 4 EU-27 SD scenario: aviation fuel demand by type (million tonnes)

The EU-27 HG scenario suggests a full recovery in average growth rates for European aviation passenger traffic to pre-Covid levels (see Figure 5 ). The cost of energy falls from the highs of 2022-3, in turn reducing the depth and duration of the economic recession. Progress with decarbonisation of the aviation industry, including the transition to SAF, attracts more domestic, regional, and international air travel. Consequential aviation fuel demand grows by 1.2% a year, although conventional jet fuel declines to 30 Mt by 2050. All three scenarios assume rapid scale-up and commercialisation of both biojet, and e-kerosene capacity, which is the rationale behind the ReFuelEU regulation. The EU-27 HG scenario requires that 16 Mt of biojet will be available in the EU by 2040 and, similarly by 2045 e-kerosene supply would need to reach 8 MT. Supply challenges Globally, in 2021 SAF production volumes were less than 0.5% of total jet fuel demand (IEA Bioenergy, 2021). The challenges regarding biojet supply are threefold: feedstock availability, production capacity, and economics. Table 3 summarises the findings of a study on the potential overall availability of biomass

produced from EU domestic feedstocks of agricultural, forest, and waste origin, which meet the sustainability criteria as defined in the Renewable Energy Directive II (European Commission, 2022). The ranges given in Table 3 reflect the scenarios used in their study to explore different levels of biomass mobilisation within the EU (Imperial College London, 2021). Biofuel production technologies are not specific to a given fuel, producing gasoline, kerosene, and diesel range molecules. The percentage of the jet fraction with the total liquid varies for each technology, while process conditions can be adjusted to increase the yield of jet or diesel. IEA Bioenergy points out that the ratio of jet to diesel will be influenced by market demand and economics as well as policy (IEA Bioenergy, 2021). For the HEFA (hydrotreated esters and fatty acids) route, when the objectives are co-production of both biojet and biodiesel, approximately 15% of the total biofuels could be biojet. Where the objective is to maximise biojet, the selectivity could increase to nearly 55% biojet at the expense of biodiesel (see Figure 5 in the IEA bioenergy report). Applying a 15% selectivity to biojet for the estimated levels of biofuels for transport from

Biomass availability (Mtoe)

2030

2050

All markets (energy and non-energy)

392-498 208-344

408-533

Bioenergy

215-366

Biofuel for transport 71-176 Table 3 Potential availability of sustainable biomass for biofuels production in the EU (Imperial College London, 2021) 46-97

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the Imperial College report gives 7-15 Mt (2030) and 11-28 Mt (2050) biojet, which would be sufficient to meet the projected demand in the EU-27 HG scenario shown in Figure 5. If the 2050 target of 85% SAF, as proposed by the EU Parliament, were to be adopted, 28 Mt of biojet would be needed. Of course, potential availability is different from practical availability. The Imperial College study also discusses measures needed to realise the potential availability of biofuels. Such measures include: • Policy support to create a positive investment environment • Research and development to improve biomass conversion efficiency and selectivity to different biofuel products • Development of new supply chains to manage biomass collection, pretreatment, and logistics • Partnerships across different industries and with governments to mobilise resources required The synthesis of e-fuels requires renewable hydrogen, produced from the electrolysis of water using electricity from renewable sources (wind, solar). The hydrogen is combined with carbon from carbon dioxide captured from industrial flues, the atmosphere, and oceans. Globally, the production of e-fuels is nascent. The eFuel Alliance lists 14 current or planned

Osetting (CORSIA) and carbon capture 19%

Infrastructure and operational eciencies 3%

New aviation technologies 13%

Sustainable aviation fuel (SAF) 65%

Figure 6 IATA’s Fly Net Zero by 2050 Strategy is contingent on the supply of SAF e-fuel plants, of which eight are in Europe (eFuel Alliance, 2022). The majority of announced projects are at demonstration scale, with a Technical Readiness Level of TRL 7. The next two decades will be critical in the development and deployment of commercial-scale e-fuels. Figure 6 shows that the IATA Fly Net Zero strategy relies on the build-up of global SAF capacity for 65% of the total emissions reductions in aviation transport by 2050.

VIEW REFERENCES

Robin Nelson robin.nelson@decarbonisationtechnology.com

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If hydrogen is the answer to energy security, let’s talk carbon, not colour We are on the brink of a clean-hydrogen revolution, but we need a change of language and the development of a global clean hydrogen market

Maurits van Tol CTO, Johnson Matthey

T he simplest and most abundant element in the universe is key to tackling Earth’s most challenging problem – climate change. It is an oft-repeated joke that ‘hydrogen is the fuel of the future, and always will be’, but its time really has come at last. Soon we will see hydrogen working alongside other green technologies – cutting carbon emissions and helping to achieve net zero. Hydrogen can help decarbonise activities that electrification cannot. Think shipping, HGV trucks and buses, and industrial processes that need very high temperatures, such as steelmaking. We cannot reach net zero without it. The hydrogen colour naming convention has now run its course. It has been an engaging and memorable way to classify what is, ironically, a colourless gas, but what is needed now is a more nuanced approach Technological advances in this field are everywhere. Johnson Matthey’s HyCOgen process, for example, uses clean hydrogen and atmospheric or waste CO₂ to produce syngas, which can be upgraded into sustainable aviation fuel, for example, and dropped into existing supplies (Johnson Matthey, 2022a). As a fuel, hydrogen leaves behind only water, and none of the CO₂ or pollutants associated with fossil fuels. But before we can really declare this to be a clean-energy vector, we need to consider the carbon footprint associated with

its production, and it is here that things start to get complicated. Front-runners Right now, most hydrogen is made by reforming natural gas – a process that creates so-called ‘grey hydrogen’. But this process also yields CO₂, making it ripe for replacement. We will rely on two technologies in the future: the first is ‘blue hydrogen’ – created in the same way as grey, but with the troublesome CO₂ captured and stored. Second, there is green hydrogen, produced by the electrolysis of water using electricity from renewable sources, such as wind or solar. There is a rainbow of colours, too, including pink (nuclear), turquoise (methane pyrolysis), and even white (naturally occurring and mined from rock). However, I believe the hydrogen colour naming convention does not tell the full story. Though an engaging and memorable way to classify what is, ironically, a colourless gas, what is needed now is a more nuanced approach to hydrogen nomenclature. Let’s talk carbon It is more appropriate to talk about the carbon intensity of hydrogen. The ease of the colour- naming convention tends to invite simplistic comparisons of hydrogen production routes. For instance, it is common to see arguments favouring green hydrogen (electrolysis from renewable electricity) over blue hydrogen (natural gas + CCS) because the blue variant still produces CO₂ and uses a fossil fuel (natural gas) as a feedstock, and dealing

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Though, it is also worth noting that half of the hydrogen produced through SMR actually comes from the water used, not the methane (UK Gov BEIS, 2021). At JM, our own LCH technology captures more than 95% of associated CO₂ emissions, and has excellent environmental credentials for ATR blue hydrogen production (Johnson Matthey, 2022c). Blue hydrogen is often looked on as an intermediate technology – something to tide us over until green hydrogen electrolysis plants are ready to take over. We don’t see things this way. Complementary solutions Rather than two opponents – one in the blue corner, the other in the green corner, slugging it out for supremacy – we see blue hydrogen and green hydrogen as being pieces of the same jigsaw. In the future, we will need both methods, working together to diversify supply and boost energy security. Diversity is important to insulate the market from price fluctuations. Both of these hydrogen generation methods have dependencies: CCS network capacity and natural gas prices in the case of blue hydrogen; and the availability and price of low-carbon electricity for green. Other factors to consider are speed and scale: blue hydrogen is ready to go now; green hydrogen will need until about 2030. At JM,

with this is both expensive and has a carbon footprint all of its own. However, this argument fails to acknowledge the ease with which existing grey hydrogen plants can be retrofitted with CCS to make them blue – a process that has a much smaller carbon footprint than building a green hydrogen plant from scratch. For instance, JM’s suite of CLEANPACE technologies enables the revamp of steam methane reformers with existing, proven technology to achieve CO₂ emission reductions of up to 95% (Johnson Matthey, 2022b). Such retrofitted blue hydrogen plants have an important role to play in expanding the hydrogen market in which new blue hydrogen plants, and green hydrogen electrolysis facilities, can then thrive. The colour naming convention also fails to take into account the technology variations within these categories. As analysis by the Hydrogen Council shows, the greenhouse gas emissions associated with green hydrogen production depend on how the electricity was generated (Hydrogen Council, 2021). Similarly, a blue hydrogen analysis by UK government department BEIS highlights the impact of the reforming method on lifecycle emissions, with autothermal reformers (ATR) being more efficient and more compatible with CCS than steam methane reforming (SMR).

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we believe every molecule of CO₂ entering the atmosphere is a problem – and something that blue hydrogen can help prevent in the short and medium term. Blue hydrogen’s potential to ‘move the needle’ quickly can be seen in the HyNet clean hydrogen project in the North West of the UK, which has adopted JM’s LCH technology. When this comes on-stream in 2025, production capacity will be 3 TWh, with the potential to scale to 30 TWh by 2030. In contrast, Shell Rotterdam – reported to be Europe’s biggest renewable electrolytic hydrogen production facility – will produce about 1 TWh when it comes on stream in 2025 (HyNet North West, 2022). The suitability of hydrogen production methods will also change according to location. Newly built blue hydrogen plants will often be more attractive to countries that have reserves of natural gas and the geological formations to deal with the captured CO₂. The HyNet project in the UK is a great example. On the other hand, green hydrogen will suit territories that have an abundance of renewable electricity. For example, in NEOM – Saudi Arabia’s futuristic city under construction – the country’s bountiful solar and wind resources will help produce 1.2 million tonnes of green hydrogen every year by 2026 (NEOM, 2022). And in California, approximately 1 TWh of solar electricity is wasted every year because an outdated electricity grid cannot take it. That is an amount of energy equivalent to four nuclear reactors, all of which could be stored in the form of green hydrogen – or converted into a high- density energy carrier such as ammonia. concentrate on carbon footprint, we will need to change our language around hydrogen. Defining and implementing proper low-carbon hydrogen standards is essential if all stakeholders are to know what ‘clean hydrogen’ actually means. Grouping hydrogen production by carbon intensity and not colour – as the US has proposed in its Inflation Reduction Act – gives clarity and freedom to project developers when choosing technology and seeking funding. To achieve a low-carbon hydrogen economy, we are calling for technologically agnostic Language matters For us to move away from colours and

standards to be adopted as soon as possible. These should be global, or at least regionally aligned, to facilitate a worldwide market for clean hydrogen – something that would blur the distinction between colours even more. But where there are standards, there also needs to be regulation, and important questions need to be addressed here. Implementation and adoption are key, but who will regulate, incentivise, and direct the use of these standards? Will it be left to national governments or an international agency? Numerous low-carbon hydrogen standards are already in development. While we are happy to work within any framework, we want to see the inclusion of upstream emissions (such as fugitive methane emissions and escaping CO₂). To this end, the most sensible approach seems to be a standard that covers well-to-gate emissions associated with hydrogen production. Defining and implementing proper low-carbon hydrogen standards is essential if all stakeholders are to know what ‘clean hydrogen’ actually means Having a global infrastructure standard for pipe and fittings would also help reduce the cost of introducing hydrogen to the world. To achieve net zero by 2050, the world has to increase the amount of hydrogen it is producing by a factor of 10. Just as there is no magic bullet for providing the world’s green energy needs, there is no one-size- fits-all approach to clean hydrogen production. We need a diverse network of suppliers around the world, each using the right method for them. Our language – and our preconceptions about existing technologies – must change and we need to find new ways of measuring carbon intensity. It is an incredibly exciting time to be involved with hydrogen – and at JM we are proud to be at the heart of it.

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Maurits van Tol Maurits.vanTol@matthey.com

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Why blue hydrogen provides a de-risked decarbonisation lever A deep-dive into blue hydrogen’s important role in achieving net zero by 2050

Mario Graca Shell Catalysts & Technologies

T he imperative for lower-carbon energy systems is highly perceptible now, as an increasingly large group of countries announce their intention to become carbon neutral by 2050. Globally, the pool of countries with aspirational targets that are set out in climate law, or as statements of intent or submissions to the UN, accounts for about 80% of the world’s population. As we approach 2050, the world population is projected to increase from its present 8 billion to 9.8 billion and energy demand will increase by about one-third; yet, simultaneously, net global carbon dioxide (CO₂) emissions rates will need to be halved. With more and more countries setting out their zero-carbon ambitions, momentum for blue and green hydrogen production is growing. The first half of 2021 saw a surge of activity in hydrogen project investments. By mid-2021, the Hydrogen Council reported a 60% increase in announced clean hydrogen production capacity, through to 2030, compared with a similar projection made in 2020. Furthermore, this was a 450% rise compared with the figure at the end of 2019. By early 2022, more than 500 major initiatives around the world have been reported, with $160 billion of industrial investment and $70 billion of pledged public support. Shell believes that both green and blue hydrogen are needed to meet the demands of the future hydrogen economy and help develop its infrastructure. Green hydrogen is the ideal long-term goal, but most green hydrogen projects currently come with a high cost. Further, the technology would require significant scaling for green hydrogen to satisfy

the majority of the projected hydrogen growth in the coming decades. Although there is great uncertainty on the relative growth of each, it is clear that an extended hydrogen economy and infrastructure is coming. Blue hydrogen has a strong role to play in the energy transition by helping to build a hydrogen market while continuing to lower emissions. Hydrogen projections The demand for hydrogen is accelerating, driven by stronger national-level government commitments to decarbonise the energy sector and by businesses with net-zero objectives and ambitious sustainability targets. Today, the International Energy Agency (IEA) estimates that the demand for hydrogen is about 90 mtpa, almost all of which is used for ammonia production and refining. This figure is forecast to reach about 200 mtpa by 2030 and more than 500 mtpa by 2050. Other forecasts assess hydrogen demand to vary between 150 mtpa and 500 mtpa by 2050. The wide range seen here is linked to the varying degrees of ambition required to achieve temperature targets within the various global warming scenarios. For example, some analysts suggest that striving to meet a Paris Agreement-aligned global warming target of below 1.8°C, similar to Shell’s Sky scenario, could result in a hydrogen demand of 220-600 mtpa by 2050. Meeting this demand will require an unparalleled transformation in how hydrogen is produced. Currently, most hydrogen is ‘grey’ and produced by converting natural gas into hydrogen and unabated CO 2 , using mostly the steam methane reforming (SMR) process. However, this process is carbon intensive

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cleaner hydrogen grows. And, although Europe accounts for 80% of new projects, China is a rapidly emerging market with more than 50 announced projects. With these investments, green and blue hydrogen production capacity is set to exceed 10 mtpa by 2030. This is, however, far below the demand forecast for 2030, which leaves a considerable need for further projects and investments. Why blue hydrogen has an important role Blue hydrogen is similar to grey hydrogen except that the CO₂ is captured and either utilised or stored underground. Though the amount of CO₂ captured varies according to the project, blue hydrogen is widely regarded as low carbon. Green hydrogen is mostly carbon free and is seen as the ideal solution to satisfy future hydrogen demand. So, why do we need blue hydrogen? The reality is that the current economics of green hydrogen are challenging when compared to blue hydrogen. Even by 2030, it is likely that green hydrogen will be double the cost of blue hydrogen (see Figure 1 ), though cost parity may be achieved by 2045. This will not be the case everywhere. In some regions, particularly those with a high level of grid- connected renewable energy, green hydrogen

6

CO price Fuel cost Operating expenditure Sensitivity Capital expenditure

5

4

3

2

1

0

Green hydrogen

Grey hydrogen

Blue hydrogen

Figure 1 Hydrogen production costs in 2030

and is, according to the IEA, responsible for as much as 900 mtpa of CO₂ emissions. The energy industry cannot, therefore, just expand current grey hydrogen production if it is serious about achieving deep decarbonisation. Instead, it must rapidly transition to cleaner methods of hydrogen production, such as green and blue hydrogen. A global investment of $500 billion has already been committed to low-carbon (blue and green) hydrogen projects through to 2030; this figure is set to rise as demand for

Lower methane slip as SGP operates at high reactor temperatures

Energy suciency Produced steam satises most internal users

Higher operating pressure Hydrogen compression duty and ADIP ULTRA CO capture eciency are improved

To internal users (air separation unit, CO removal unit, triethylene glycol dehydration and power generation)

Superheated steam

Boiler feed water

Saturated steam

Natural gas and/or renery fuel gas

ADIP ULTRA CO removal unit

Syngas euent cooler

Hydrogen compression

SGP reactor

Water gas shift

Hydrogen purication

Hot syngas

Cooled syngas

Impure hydrogen

Hydrogen product

Shift euent

Hydrogen product export

Oxygen

Medium-pressure CO

Air separation unit

INTEGRATED SBHP

CO compression and dehydration

High-pressure CO to storage

Air

Low-pressure CO

Feed exibility: Non-catalytic process means robustness against feed contaminents (sulphur, olens, C ) +

Intermediate ash: High capture pressure means most of the CO can be regenerated at a medium pressure to minimise CO compressor size

Shell propriety technology

Shell technology embedded

Open source technology

Figure 2 The SBHP and the advantages of integration with other technologies

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Cansolv CO

CO

SMR Large reference, but requires post-combustion CO capture for >90% capture

Flue gas

CO

Steam

CH

Feed gas pretreatment

CO capture

SMR

H

CO shift

Purication

(Option)

CO

Steam

ATR Feed pretreatment Steam for reaction Fired heater

CH

Feed gas pretreatment

CO capture

ATR

H

CO shift

Purication

O

CO emissions

Fired heater

Air Power

ASU

CO

HP steam

SGP No or minimal feed pretreatment Steam production using waste heat No direct CO emission from process

CH renery fuel gas

CO capture

SGP

H

CO shift

Purication

O

Air Power

ASU

Figure 3 Comparison of different blue hydrogen technologies

may already have the advantage. Where this is not the case, blue hydrogen has a vital role to play in the energy transition. Essentially, while green hydrogen may be the better economic option in some locations, blue has an advantage in others and therefore both are needed in the short and medium term. Which type of blue hydrogen technology? Blue hydrogen can be produced in different ways, according to the technology used. Until recently, project developers usually had the choice of two established blue hydrogen technologies: SMR or autothermal reforming (ATR). Now, there is a third option; one with the potential to provide superior cost and CO₂- capture performance. The Shell Blue Hydrogen Process (SBHP) is a new way to produce blue hydrogen from natural gas, or other hydrocarbon gases (refinery off-gases), by integrating proven technologies that can be deployed rapidly (see Figure 2 ). The process is an oxygen- based, non-catalytic system, whereby Shell’s proven Shell Gas POx technology is utilised to manufacture syngas. After the water-gas shift reaction, CO₂ is removed with Shell ADIP ULTRA technology to leave a hydrogen stream for further purification. Shell Gas POx utilises

Shell’s proven Shell Gasification Process (SGP) technology, based on gas partial oxidation, which is a mature, cost-efficient, and de-risked technology with a 70-year track record. Established, de-risked technology The SBHP development journey is interlinked with the Shell Pernis refinery’s decarbonisation journey. In 1998, SGP technology was at the heart of Shell Pernis refinery’s residue upgrading. With no sequestration available, some CO₂ was vented to atmosphere, but Shell also found uses for it, routing up to 1 mtpa to greenhouses to accelerate crop growth. Further development took place when the Pearl GTL (gas-to-liquids) plant in Qatar came on stream in 2011, with some 18 SGP trains, each of which was able to convert natural gas into syngas with an equivalent pure hydrogen production capacity of 500 t/d. While green hydrogen may be the better economic option in some locations, blue has an advantage in others, so both are needed in the short and medium term

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Shell began developing the gas-treating ADIP technology in the 1950s. In 2020, the insights and learning from over 500 ADIP references, from Pernis and Pearl, were pieced together and leveraged to develop a new integrated line- up to produce hydrogen from any hydrocarbon feedstock with CO₂ capture. The Porthos project, which is the Netherlands’ first carbon capture and storage (CCS) venture involving four companies, is a highly significant development for Pernis. This is because it will enable the gasifier’s CO₂ to be sequestered in empty gas fields below the North Sea. After 20 years of producing pure CO₂ from residue feed, Porthos provides the opportunity to store the CO₂ in the ground, transforming the Pernis unit into a type of blue hydrogen plant. As a result, Pernis will reduce its CO₂ emissions by some 25%, and it will also enable the site to lower the carbon intensity of its products. When compared with conventional SMR and ATR technologies (see Figure 3 ), the SBHP has key advantages. First, for large-scale projects (greater than 200 t/d), oxygen-based systems such as the SBHP and ATR can have a significant cost advantage over SMR systems. Moreover, the SBHP provides a potential levellised cost of hydrogen advantage: lower than both SMR and ATR. Second, the SBHP can produce the lowest

By archetype

Oil, chemicals and gas industries: Rening, petrochemicals, LNG using blue hydrogen to lower the Cl of their own products Natural gas industry: Converting natural gas to blue ammonia for export Power industry: Converting coal and natural gas fired power stations to re blue hydrogen to produce low Cl electricity Consortiums of industries (clusters): Converting natural gas to blue hydrogen to decarbonise heavy industrial clusters

Figure 4a The four blue hydrogen projects

carbon intensity blue hydrogen molecule and can capture as much as 99.9% of the CO₂ that is routed to the CO₂ capture plant from high- pressure, single-source, pre-combustion gas streams. This limits the Scope 1 emissions, which makes it the preference for greenfield applications that require high capture rates. Third, unlike ATR and SMR, the Shell Gas POx technology is non-catalytic, so it does not require the same extent of expensive gas pretreatment as a catalytic process and can still provide significant feed flexibility by default.

Pipeline gas

Blue hydrogen

Low Cl products

Oil, chemicals and gas industries

Rening, Petchem, LNG

SBHP

Excess blue hydrogen to other industries

Fuel gas

Blue ammonia (for export)

Pipeline gas

NH

Low Cl products

Natural gas industries

Natural gas

SBHP

Pipeline gas

Low Cl products Low Cl products

Power industry

Power

SBHP

Consortiums of industries (clusters)

Pipeline gas

Steel

Power

Cement

Paper

Rening

SBHP

Blue hydrogen

CO

Figure 4b How the SBHP integrates with the four project archetypes

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Shell’s blue hydrogen insights Since launching the SBHP as an alternative to SMR and ATR in 2020, Shell has gained important insights into the status of the global blue hydrogen landscape and is exploring opportunities and projects around the world. From these activities, Shell has defined four project archetypes that describe the key, current applications for blue hydrogen (see Figures 4a and 4b ). The SBHP has several important advantages for these projects when compared with SMR and ATR. Blue hydrogen and the oil, chemical, and gas industries Conventionally, a refinery uses fuel gas or natural gas in multiple fired heaters to provide energy, resulting in atmospheric CO 2 emissions from multiple stack locations. Post-combustion carbon capture is possible, but post-combustion gases are low pressure, must be captured from multiple locations, and typically have lower CO 2 concentrations, thereby making carbon capture less efficient and more expensive. Industrial clusters, or hubs, are becoming an increasingly important concept as heavy industrial emitters look to develop collective, cost-effective decarbonisation pathways Instead, companies are now looking to use conventional feedstocks in a centralised production facility to produce hydrogen that can be used to power furnaces and gas turbines as well as directly in conversion processes. The advantage of this is that CO₂ can be captured from a high-pressure, pre- combustion gas stream at a single location, which is cheaper and can help to reduce Scope 1 emissions. For this strategy, the SBHP has the advantage that since the CO₂ is captured at high-pressure from pre-combustion streams, medium-pressure CO₂ is easily produced for transportation or storage, without the need for further compression. The process also

offers greater feed flexibility, including fuel gas, natural gas, biomass, and bottom-of-the-barrel refinery products. Blue hydrogen and the natural gas industry Many natural gas exporters are looking to use their natural gas as a feedstock for blue ammonia production, which is an efficient hydrogen carrier and provides a more efficient way of exporting hydrogen molecules to market. This strategy is particularly suited to locations where local natural gas production exceeds the local demand. In this scenario, the SBHP has the advantage because it can leverage high-pressure natural gas feeds and deliver high-pressure hydrogen, reducing the compression costs for ammonia production. As an oxygen-based technology, the nitrogen produced by air separation during hydrogen production can be used to produce the blue ammonia for this application. Additionally, the process can capture as much as 99% of the CO₂ emitted during hydrogen production, thereby lowering the carbon intensity of the ammonia and any associated downstream products. Blue hydrogen and the power industry Current demand for blue hydrogen in the power sector is relatively small. Shell expects large growth in this area as utility companies continue to seek lower-carbon solutions for power production. Consequently, companies are looking at blue hydrogen as an alternative to coal or natural gas. Compared to SMR and ATR, the SBHP produces hydrogen and captures CO₂ at higher pressures and at the larger scales required to result in a lower levellised cost of hydrogen. Power plant efficiency can be improved by integrating the high-pressure steam from the SBHP with the power generation plant. Blue hydrogen and consortiums of industries (clusters) Industrial clusters, or hubs, are becoming an increasingly important concept as heavy industrial emitters look to develop collective, cost-effective decarbonisation pathways. For example, rather than each emitter developing its own blue hydrogen solution, clusters

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