Hydrogen derivatives key to the
global renewable energy trade
The role that hydrogen derivatives can play in decarbonising key applications
and industries
Nadim Chaudhry
World Hydrogen Leaders
A
s an energy carrier, when produced using
renewables, hydrogen is set to play a
pivotal role in decarbonising the world’s
energy systems. As a direct fuel, hydrogen can
replace fossil-fuels in a wide range of uses
including transport, industrial, residential and
portable power applications.
However, the markets for clean hydrogen
increase substantially when considering the use
of its derivatives; products that can be used as
a feedstock for industrial processes, as a way to
transport energy over long distances and use in
other hard-to-abate applications.
Hydrogen’s inherent flexibility offers multiple pathways to its end use
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Green hydrogen derivatives can accelerate
fossil fuel phase-out
Storing and transporting hydrogen as a gas
can be challenging considering its low energy
content by volume and small molecule size.
However, hydrogen’s inherent flexibility offers
multiple pathways to its end use. The gas can
be compressed, liquefied, and reversibly bound
into solid materials or liquid organic hydrogen
carriers (LOHC).
Hydrogen can also be converted into synthetic
green electro-fuels including e-methanol,
e-methane and e-ammonia. The principal
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As an energy carrier ammonia has some advantages over hydrogen
benefit of converting hydrogen to its derivatives
is that the energy density of these products
is significantly higher. For example, liquid
ammonia has an energy density around eight
times that of lithium-ion batteries. Increasing the
energy density makes long-distance transport
and long-term storage more cost effective. For
these reasons, hydrogen derivatives will become
a key enabler of the global trade in renewable
energy.
Green ammonia
As an energy carrier, e-ammonia has some
advantages over hydrogen. It is liquid at minus
33°C (compared to hydrogen which needs
a temperature of minus 253°C) and there is
expertise in creating infrastructure for storing
and transporting it. It can be used to fire
gas turbines to generate electricity without
emissions.
As well as making it cheaper and easier to
transport energy, hydrogen derivatives can play
a significant part in decarbonising industrial
processes.
Nitrogen-based fertilisers are critical for
global food production, but their production
and use contributes 5% of the world’s
greenhouse gas emissions. These emissions
can be reduced significantly by synthesising
ammonia from hydrogen and nitrogen using
renewable energy. The conventional process
for producing ammonia, which uses natural gas
as a feedstock, is responsible for around 2%
of global fossil fuel use and more than 1% of
global emissions.
From 2020 to 2022, fertiliser prices increased
by a factor of six due to gas price volatility,
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which is a key driver in the rising cost of food.
Developing alternative, green sources of
ammonia can help to protect against global food
price inflation.
Ashwani Dudeja, President & Director, Green
Hydrogen and Ammonia ACME Group sees
huge potential for hydrogen derivatives to
contribute to more sustainable agriculture and
in decarbonising industrial processes: “The
existing demand for ammonia as a chemical
in fertiliser and chemical industries is a low
hanging fruit to achieve decarbonisation without
requiring any capital expenditure. Beyond
agriculture, ammonia has a significant potential
in achieving decarbonisation in the marine
sector, which contributes to nearly 3% of global
emissions. The possible uses of ammonia in
areas like power generation both for co-firing
as well as mono firing fuel, road transportation
(especially heavy-duty transport) and other
industrial applications is very promising as well.
“To begin with, hydrogen and its derivatives,
like ammonia, can be used in many of those hard
to decarbonise sectors and applications where
electrification is not possible – aviation and
steel are good examples. Within the electricity
sector, these new fuels can be used alongside
renewable power generation to smooth supplies
and optimise power grids thus achieving higher
share of overall power generation.”
While an estimated 70% of ammonia is used
to produce fertilisers, the remainder plays an
important role in other industrial applications
including plastics and synthetic fibres.
Angela Kruth, Head of Green Ammonia
Technologies believes that string partnerships
will play in a key role in unlocking the hydrogen
energy transition: “Ammonia is a long-time
reliable and faithful workhorse that has enabled
our food supply for over a century. Produced
from renewable energy and directly utilised in
shipping, landside mobile and stationary energy
supply applications, as well as production
of green chemicals and materials, it is a
gamechanger for the energy transition and our
key to a fast-track decarbonisation of the global
energy system. Unlocking and accelerating the
green ammonia transition, however, requires
bold first movers and fast followers. They must
be supported in initiating the transition and
costs, benefits as well as risks must be shared
in strong partnerships across the whole value
chain of ammonia.”
A recent report forecast by the Faraday
Institution (FI) suggests that in 2050 ammonia
will be the predominant fuel for UK marine
applications, taking 35% of the market. Green
ammonia is forecast to be 15 times cheaper
than liquid hydrogen. However, FI does not
expect ammonia-powered ships to be in use
until 2035 due to the need to develop new
technology.
Tobias Block, Head of Strategy and Content
at the eFuel Alliance, believes that e-fuels offer
the best solution to decarbonise the maritime
sector: “Shipping is considered a difficult sector
to electrify, which makes the use of liquid fuels
such as synthetic LNG, e-methanol, e-ammonia
or e-diesel without alternative. E-fuels offer
the greatest potential for climate-neutral
operation for shipping. With the same chemical
characteristics as fossil fuels, they can be
blended into conventional fuels until they reach
full market penetration. By doing so, massive
CO₂ savings can already be achieved today.
But this requires ambitious political framework
conditions worldwide to accelerate the
production and marketing of sustainable fuels.
At the same time, shipping is a global sector
and under enormous competitive pressure. If
we want to facilitate a swift market ramp-up of
alternative fuels in the maritime sector, sufficient
support mechanisms have to be put in place to
combat global first-mover disadvantages.”
Green methanol
Green methanol is produced from green
hydrogen and carbon dioxide. Today, methanol
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is one of the most widely produced and
important raw materials in the chemical
industry. Producing green methanol on
an industrial scale can make a significant
contribution to the energy transition.
Direct Methanol Fuel Cells already enable the
use of methanol in portable generators and
vehicles. Liquid green methanol is easy to store,
transport and use. Furthermore, its manufacture
uses proven technology – there are plants
producing green methanol that have been
operating for over a decade.
By synthesising green methanol using
renewable energy, water and CO₂ from
industrial processes, it becomes possible to
create a circular system. The water produced
is fed back into the electrolyser and the waste
heat can be captured and reused, as can the
oxygen.
“green
Unlocking and accelerating the
ammonia transition, however,
requires bold first movers and fast
followers
”
Overcoming barriers key to early uptake
The cost of adopting cleaner hydrogen
derivative fuels is key in determining the rate of
uptake across all sectors.
For example, bunker fuel, used in the shipping
industry, is heavy fuel oil that is made from the
dregs of the refining process. While the cost
of bunker fuel has increased over the past few
years, green alternatives still come at around
a 50% cost premium. Increasingly, ships using
bunker fuel with high sulphur content are
refused entry to many ports and countries like
Norway are considering coastal bans. As well as
imposing restrictions, there are two policy levers
that can make greener fuels viable for shipping
and accelerate uptake – a carbon tax on
shipping to level the playing field and subsidies
for hydrogen derivatives to close the cost gap.
Another barrier to adoption is the global
debate and divisions around ‘pipe versus
cable’. Countries including France, Spain and
Portugal are planning to move hydrogen and its
derivatives by shipping routes and subsequently
subsea pipeline. Others argue that it is better
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to invest in electricity interconnections and
generate hydrogen locally. Concerns over
hydrogen pipelines include their cost and
overcoming safety and engineering challenges.
Those advocating piping hydrogen argue that
distributing electricity over long distances is
less energy efficient; that Europe’s grid lacks the
capacity to transport the extra power required
to produce green hydrogen and reinforcing the
grids is prohibitively expensive, and that it is
harder to get environmental approval for high
voltage infrastructure than pipelines.
Creating new hydrogen derivative economies
The ‘pipe versus cable’ debate highlights
the role that hydrogen derivates can play in
enabling global trade. The most likely scenario is
that natural gas pipelines will be repurposed to
carry hydrogen, as the cost will be much lower
than constructing new pipelines. Hydrogen will
be piped within and between countries over
medium distances, but not between continents.
However, the higher energy density of ammonia
and that it is more readily transportable by ship
is key to supporting global trade.
Currently, countries that lack fossil fuels
for indigenous production of methanol or
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ammonia have to import it to support their
chemical industries and agriculture. By investing
in renewable energy these countries can
synthesise hydrogen derivatives to satisfy in-
country demand and enable energy storage.
Those countries that are most successful in
exploiting renewable energy and can drive
down cost can become exporters of derivatives,
potentially transforming their economies.
Hydrogen derivatives offer an exciting
prospect to boost the global trade in renewable
energy; to help decarbonise hard-to-abate
industries and create and transform economies.
For the latest critical insights on the hydrogen
state of play, the global opportunities and
challenges and to better understand the
real potential for clean hydrogen, there is no
better venue than World Hydrogen Week in
Rotterdam, 9-13 October 2023, where over
3,000 world-leading developers and investors
will meet to accelerate the hydrogen future.
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