Tightening natural gas supplies and soaring prices will encourage green hydrogen schemes and use in Europe, while making blue hydrogen less attractive, according to the chief executive of UK oil major Shell.
Ben van Beurden said that current high prices are making blue hydrogen — made from methane with most of the carbon captured and stored — “a little bit difficult”.
“I think for some while Europe will focus very much on making green hydrogen,” Van Beurden told analysts last week during a call to discuss the company’s bumper second-quarter results. “And maybe over time, indeed, we’ll also look at importing hydrogen — which can then be also blue hydrogen, for instance, if it comes out of gas-rich countries”.
But he pointed out that Shell will be “driven in the long run by the value of hydrogen in the transportation system”.
“Of course, at the moment there is no hydrogen-based transportation system. It has to be built,” Van Beurden added. “Ultimately, the value uplift needs to come from building out a transportation hydrogen infrastructure through Europe.”
This will be driven by how competitive hydrogen becomes against middle distillates — such as diesel, jet fuels and heating oil — and how fast transportation companies or their customers want to decarbonise, he said.