A framework for assessing economics of blue hydrogen production from steam methane reforming using carbon capture storage & utilisation

Abstract

Hydrogen (H2) generation using Steam Methane Reforming (SMR) is at present the most economical and preferred pathway for commercial H2 generation. This process, however, emits a considerable amount of CO2, ultimately negating the benefit of using H2 as a clean industrial feedstock and energy carrier. That has prompted growing interest in enabling CO2 capture from SMR for either storage or utilisation and producing zero-emission “blue H2”. In this paper, we propose a spatial techno-economic framework for assessing blue hydrogen production SMR hubs with carbon capture, utilisation and storage (CCUS), using Australia as a case study. Australia offers a unique opportunity for developing such ‘blue H2’ hubs given its extensive natural gas resources, availability of known carbon storage reservoirs and an ambitious government target to produce clean/zero-emission H2 at the cost of <A$2 kg−1 by 2030. Our results highlight that the H2 production costs are unsurprisingly dominated by natural gas, with the additional capital requirement of carbon capture and storage (CCS) also playing a critical role. These outcomes are especially pertinent for eastern Australian states, as they are experiencing high natural gas costs and would generally require extensive CO2 transport and storage infrastructure to tap potential storage reservoirs, ultimately resulting in a higher cost of producing H2 (>A$2.7 kgH2−1). On the other hand, Western Australia offers lower gas pricing and relatively lesser storage costs, which would lead to more economically favourable hydrogen production (<A$2.2 kgH2−1). We further explore the possibility of utilising the emissions captured at blue SMR hubs by converting them into formic acid through CO2 electroreduction, yielding revenue that will decrease the cost of blue H2 and reduce the reliance on CO2 storage. Our analysis reveals that formic acid production utilising a 10 MW CO2 electrolyser can potentially reduce H2 production costs by between 4 and 9%. Further cost reduction is possible by scaling the CO2 electrolyser capacity to convert a larger portion of the emissions captured, albeit at the cost of higher capital investment, electricity consumption and saturating the market for formic acid. Thus, carbon utilisation for a range of products with high market demand represents a more promising approach to replacing the need for costly carbon storage. Overall, our modelling framework can be adapted for global application, particularly for regions interested in generating blue H2 and extended to include other CO2 utilisation opportunities and evaluate other hydrogen production technologies.