Hydrogen is both a chemical energy store and a fuel. It has an energy content of 120 MJ/kg, almost three times that of diesel or gasoline, and hence, can be used as an energy storage medium, enabling greater use of renewable energy. As a fuel, hydrogen is carbon-free and can replace fossil fuels for heat and power generation, transport, and in industrial processes.
In particular, hydrogen or hydrogen-based fuels such as ammonia (NH3) and methanol (CH3OH) offer ways to decarbonise a range of sectors such as aviation, maritime and long-haul transport, and heavy industries. As a result, hydrogen is widely regarded as key to decarbonise some of the hard-to-abate sectors, and hence, has a critical role to play in a clean energy transition to achieve net zero emissions (NZE).
Currently, there are three well established technical routes for commercial production of hydrogen:
- reforming of natural gas, primarily through steam methane reforming (SMR);
- gasification (partial oxidation) of coal and other feedstocks such as petroleum coke, heavy fuel oil and biomass; and
- electrolysis of water.
Coal gasification-based hydrogen production is the most carbon intensive, emitting around twice as much CO2 as that of natural gas SMR. Implementing carbon capture utilisation and storage (CCUS) to coal gasification-based hydrogen production, however, could reduce the CO2 emissions to a level comparable to that of natural gas SMR with carbon capture. On the other hand, hydrogen production from renewable electricity powered electrolysis (known as renewable hydrogen) emits no CO2. Therefore, renewable hydrogen is regarded by many as the fuel of the future, although very little hydrogen is currently produced this way.
In 2021, 94 Mt of hydrogen was produced globally. SMR accounted for 62% and coal gasification for 19% of hydrogen production, both without CCUS. Only 0.7% was low-carbon hydrogen from fossil fuels with CCUS and 0.04% was renewable hydrogen. Hydrogen by-products from industrial processes made up most of the rest (18%).
The pathway to NZE requires increased use of hydrogen in existing applications and a significant uptake of hydrogen for new applications, especially for energy purposes. It is likely that demand for clean hydrogen will begin to pick up from 2030, and will then accelerate rapidly reaching more than 500 MtH2/y by 2050. The IEA projects that global hydrogen demand could reach 130 Mt/y in 2030, and that around 25% of this hydrogen (34 Mt) would be renewable and/or low-carbon hydrogen used in new and traditional applications.
The question is: how can this demand be met in a low-carbon way?
A recent report The hydrogen economy and the role of coal, published by the International Centre for Sustainable Carbon (ICSC) on behalf of the IEA Coal Industry Advisory Board has examined regional variations in hydrogen demand and supply and the role of coal in helping to meet the demand for clean hydrogen.
We found that the global demand for clean hydrogen cannot be met by renewable hydrogen production, at least in the short- to medium-term, because:
- there is a large gap between the installed renewable hydrogen production capacity and the capacity required to meet government targets;
- there is insufficient renewable power generation capacity to support large-scale renewable hydrogen production whilst meeting the direct electricity need;
- there is limited electrolyser production capacity; and
- there are supply issues for some materials key for the manufacture of electrolysers.
This means that low-emission hydrogen production from coal and gas with CCUS is essential to fill the supply gap. In addition, hydrogen produced from coal gasification with CCUS costs significantly less than renewable electrolytic hydrogen. This economic advantage will continue to 2030 or beyond. Thus, hydrogen from coal with CCUS can improve the economic viability of low-emission hydrogen use, enable its early and wider deployment, and bridge the transition to greater use of renewable hydrogen in the longer term.
Currently, the projected renewable hydrogen capacity of many countries falls short of their targets, and the gap between existing hydrogen demand and projected renewable hydrogen production capacity is even greater. So, diverse sources for hydrogen production are needed and they will be related to the resources available in a region. For example, China is the world’s largest user and producer of hydrogen with a production capacity of 41 MtH2/y and an output of over 33.4 MtH2/y. As hydrogen is seen as playing a critical role in decarbonising various sectors in China, the potential hydrogen market is huge, with demand projected to reach 130 MtH2 in China in 2060. There is a huge gap between the overall demand and clean hydrogen production capacity, although there are renewable hydrogen projects under development in China. Given the large consumption of hydrogen and the potentially rapidly growing demand, China will face serious challenges to meet its demand for low-emission hydrogen. With abundant coal reserves but limited natural gas resources, hydrogen production from coal gasification with CCUS will be vital to meet increasing domestic demand.
Japan, South Korea and some European countries have all set ambitious targets for hydrogen development and deployment, and are expected to be demand centres for clean hydrogen. However, their restricted domestic capability to produce hydrogen means they will rely on imports. Other countries such as Australia, Canada, Chile, Indonesia, Malaysia, the Middle East, Russia and South Africa can potentially produce hydrogen at low cost but have a low domestic demand so they are likely to become exporters of hydrogen.
Opportunities exist for the international trade of clean hydrogen to evolve and increase. In particular, hydrogen trade in the form of ammonia for use as a clean fuel will expand in the near future.
The key metrics for traded hydrogen markets in the future will be cost and carbon footprint. In general, the costs of low-carbon hydrogen production via coal gasification with CCUS and natural gas reforming with CCUS are significantly lower than that of renewable electrolytic hydrogen, typically by a factor of around three as shown in Figure 1. There are also large regional variations in hydrogen production costs.
For coal-dependent, large hydrogen-producing and consuming countries such as China and India, coal provides not only the cheapest source for hydrogen production, but also a secure and reliable supply.
Hydrogen production using electrolysis or coal or gas with CCS requires land, water, electricity, coal, gas and CO2 storage sites as well as raw materials, critical metals and rare earth elements, leading to different life cycle environmental impacts. CCUS can significantly reduce the carbon footprint of hydrogen produced by coal gasification and natural gas reforming. Figure 1 compares the life cycle CO2 emissions from coal- and gas-based hydrogen production with 95% carbon capture and renewable hydrogen. The carbon intensity of hydrogen from coal can be further reduced to achieve zero or negative emissions by co-gasification of coal with biomass plus CCUS.
Low-carbon hydrogen derived from coal can have low life cycle emissions and support the clean energy transition if best available technologies and operational practices are used along with the highest CO2 capture rates.
Electrolysis is most energy intensive of the three methods (see Figure 1) so large-scale production of renewable hydrogen will require huge amounts of renewable power to drive the process. Large areas of land will be required to host the wind and/or solar PV generation capacity. Taking the AREH project under development in Australia as an example, the plan is to build a renewable hydrogen and ammonia facility with a capacity of 1.6 MtH2/y or 9 MtNH3/y. The production facility will be integrated with a solar and onshore wind farm with a generating capacity of 26 GW, producing over 90 TWh/y, which is around one-third of all electricity generated in Australia in 2020. AREH benefits from excellent solar and wind resources and the project occupies a site area of 6500 km2, four times the size of Greater London. Compared to this, a hydrogen production plant with a similar capacity as the AREH project would require about 14 km2 of land for SMR with CCS or 17 km2 for coal gasification with CCS. Therefore, where low-cost land or excellent renewable resources are not available, but coal and carbon storage sites are, low-emission hydrogen from coal with CCS may be the best option.
Our work shows that coal can play a role in certain regions and markets to support the development of a hydrogen economy and a clean energy transition toward NZE. Low-emission hydrogen from coal can offer a cost-competitive choice, supplementing other options in meeting the expected demand, both domestic demand in major hydrogen-consuming countries such as China and India and internationally to provide importing countries more options of economically viable low-emission hydrogen.
For more detailed analysis, please download the report Hydrogen economy and the role for coal.