Decarbonisation Technology - November 2021

Hydrogen in 2020 Virtually all grey, emitting 830 Mtpa COeq

Hydrogen in 2050 Consistent with a net-zero society

GHG emissions

Production potentially 800 Mtpa

Production

Production 70 Mtpa

Negative carbon H <0

Net-zero carbon H on life-cycle basis

Ultra low- carbon H ≤ 1 kg CO/ kg H

Low- carbon H ≤ 3 kg CO/ kg H

Reduced carbon H ≤ 6 kg CO/ kg H

Existing grey production c. 11 kg CO/ kg H

Carbon intensity of hydrogen

New production/consumption

Figure 1 Stepping stones based on the carbon intesity of hydrogen Source: WBCSD 2021, Policy Recommendations to Accelerate hydrogen deployment for a 1.5ºC Scenario

components, recycled waste, and captured carbon. Refiners are also investing to reduce the energy consumed (and therefore carbon emissions generated) during the production of the fuels, lubricants, and chemical feedstocks. At the same time, gas producers are decarbonising gas streams by converting the methane to hydrogen and capturing the CO 2 . Many of the technologies needed are available now, but of course new innovations designed to further improve efficiency and to bring down costs in the future will be welcome. Hydrogen production Hydrogen is used in most of the processes to upgrade refinery oil streams to useful products. Hydroprocessing includes hydrocracking, desulphurisation, dearomatisation, and denitrogenation processes and hence hydrogen production units are present in most refineries. As we look to decarbonisation technologies, hydrogen assumes even more importance. Some question why hydrogen is needed as renewable electricity powering electric engines is more efficient. Hydrogen can be complementary to pure electric power as it provides an alternative to batteries for renewable energy storage (for instance, in offshore deep water wind installations). Hydrogen can be used as a portable fuel in its own right, to power hydrogen engines or for use in fuel cells. Furthermore, as already mentioned above, hydrogen can be used as a fuel to turn

The energy transition must be a managed transition that supports the development of renewable electricity and fuels, and progressively reduces the demand for fossil fuels. Renewable electricity In developing countries, energy demand is growing. More investment in renewable electricity generation is needed both for burgeoning cities and for more rural areas which lack an electricity supply. In mature economies the focus is on renewable electricity production along with measures to increase the penetration of electric vehicles. Even the most ambitious targets for electric vehicle roll-out are only likely to achieve a measurable reduction in global carbon emissions in the latter half of this century. The reality is that the majority of the world’s cars, trucks, aeroplanes, and ships will continue to require liquid or gaseous fuels. In many northern hemisphere countries, gas is the main means of heating homes in the colder winter months. The IEA’s Sustainable Development Scenario includes a much faster deployment of clean energy technologies but also envisages the operation of existing carbon-intensive assets in a very different way. 5 Technologies which can reduce emissions now and over the next 2-3 decades will buy the time needed to develop and deploy longer term solutions on a global scale. The oil and gas industry understands this and is developing lower carbon fuels. Refinery feedstocks increasingly include different biofuel