Earlier this year, the Suiso Frontier embarked on a voyage from Port of Hastings, Victoria, to Kobe, Japan; marking the first time that liquid hydrogen has been transported by sea to an international market. As recent news has shown, it will not be the last.
Global events from the Russia-Ukraine war to COP26 to COVID-19 have collectively contributed to a strong impetus for countries to depart from traditional fossil fuels in favour of renewable fuels such as green hydrogen (GH2). With the capacity to support the large-scale decarbonization of heavy and lightweight vehicle industries, as well as generate electricity and heat, GH2 has endless applications – the only issue is: how do we store and transport it?
Key Issues
While GH2 is favored as a future fuel of choice, the reality is that there is still much development needed in both infrastructure and transportation to get GH2 from remote production sites to its destination in heavily populated and industrial areas. The following factors must be considered as part of the development process:
- Time and Costs – large-scale conversion/re-conversion and transportation of GH2, as well as developing technologies in this space, are complex, energy-intensive and expensive processes with a reliance on both the public and private sector to provide the funds and labour.
- Feasibility – according to a report by Roland Berger,1 renewables must provide a significantly greater output of energy to perform on par with fossil fuels in sustaining an industry, and beyond that, to reduce emissions in that industry. For example, the report notes it would require up to 10 million tonnes of hydrogen per year to adequately power the European steel industry and reduce emissions. To supply that hydrogen requires 120-180 GW of renewable energy capacity, currently 2 to 3 times more than Germany’s total installed capacity for wind power.
Other considerations include the availability of physical space for renewable energy facilities and the capacity of the electricity grid to support such large projects alongside other domestic, public and industrial needs.
Despite these challenges, several initiatives are currently underway – particularly in Europe – to streamline the process of transporting and storing GH2, as we will explore below.
Gas Pipelines
Compressed hydrogen is capable of being transported via pipelines, which are fitted with metering stations, control valves, gates and storage facilities, to ensure a steady flow of hydrogen to end users.
A benefit of the pipeline delivery method is its use of the natural environment, such as using salt caverns as natural storage facilities or the existing gas grids as ‘pipelines’, which reduces the need to build new infrastructure, and the associated costs, whilst also contributing towards sustainability.
Where new pipelines must be built, they incur high capital costs and are subject to strict approval processes, both of which act as barriers to the efficiency of implementing and expanding pipeline networks. Additionally, there are unresolved questions surrounding how hydrogen supplied using this method can be converted for use by consumers.
Overseas, Middle Eastern and African suppliers have started blending and exporting hydrogen to Europe via international pipelines. In Europe, the European Hydrogen Backbone is an initiative in line with REPowerEU that aims to construct a hydrogen network comprised of 53,000 km of pipelines by 2040 at a projected cost of $84 – 151 billion. The European Commission has also set aside funding for hydrogen research and stated it will support the development of three major hydrogen import corridors via the Mediterranean, North Sea and (geopolitical conditions permitting) Ukraine.
In Australia, the Australian Gas Infrastructure Group recently completed a feasibility study and set out a roadmap for introducing hydrogen blending into the Dampier-Bunbury Natural Gas Pipeline, one of the largest capacity natural gas pipelines in Australia. Ultimately, the goal is to develop a commercial GH2 supply chain in Australia.
Green Ammonia
GH2 can also be stored and transported as ammonia. This method involves nitrogen and hydrogen reacting together to produce liquid ammonia, which is then transported in refrigerated tanks to its destination. The ammonia can then be cracked back to its components and purified to extract the hydrogen.
The method of using ammonia to transport GH2 is comparatively cheaper than other options and offers ease of storage and transport, as the GH2 is contained in a liquid form. As the use of ammonia has been well established on an industrial scale for some time now, there is also existing infrastructure for storing, transporting and handling the substance; as well as accepted policies and safety standards regulating its use.
The downside is that ammonia is a toxic chemical that can adversely affect human health and poses a potential risk to water and soil quality if mishandled. Accordingly, as GH2 will primarily be delivered for use in densely populated areas, there are some safety concerns in using ammonia as a transport vessel.
Projects for green ammonia are currently underway in the Netherlands. The companies Gasunie, HES International and Vopak have joined forces to develop an import terminal for storing and converting green ammonia called the ‘ACE Terminal’. The ACE Terminal has a purported start date in 2026 with plans to integrate it into a national hydrogen transport network.
Liquefied Hydrogen and Liquid Organic Hydrogen Carriers (LOHC)
Besides ammonia, GH2 can still be transported in liquid form if cooled below its boiling point of – 253°C or put through a process called ‘hydrogenation’ which chemically binds hydrogen to a liquid compound, to be released upon arrival at the destination.
Both options are supported by well-established technology and provide high-purity hydrogen to the end user. As mentioned previously, liquid hydrogen is also easier to store and transport. The main drawback is the high energy consumption for the liquefication process and extensive temperature regulation required in both these methods. For LOHC, there is the additional upstream costs of procuring high volumes of LOHC liquid to bind the hydrogen.
Other Options
Natural hydrogen – also known as native or ‘gold’ hydrogen – is continuously generated by geological processes and contained in the Earth’s crust and is considered a source of ‘truly green’ cheap hydrogen. Natural hydrogen has the potential to be three to four times cheaper than hydrogen produced via the methods outlined above due to the hydrogen being directly extracted rather than being produced after a lengthy manufacturing process. The extraction process has already been developed in the oil and gas industry saving further time and cost in research and development. Thus, whist difficult to find, natural hydrogen remains a potential option to enable a faster transition to more sustainable forms of hydrogen.
The Future Fuel
GH2 is fast becoming the future fuel of choice to pioneer the large-scale decarbonization of many hard-to-abate industries. While its widespread use is currently impeded by a lack of established infrastructure, as well as the costs and feasibility of further development, there is plenty of work underway in this space to develop new, sustainable ways of transporting and storing GH2. Indeed, given the already frantic pace of the renewable energy transition, do not be surprised if there are more cost effective and efficient methods of transporting GH2 developed before the year is out. Ultimately, the market will decide which method becomes the dominant way of transporting this ubiquitous gas.
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.
1 Uwe Weichenhain, Hydrogen Transportation: The Key to Unlocking the Clean Hydrogen Economy, Report for Roland Berger (2021) 4.
