High Natural Gas Prices Could Lift Green Hydrogen Investment

Major green hydrogen deals and projects in Europe and Australia

As the price of natural gas is soaring globally amid a scarcity of supply and Russian threats to cut off flows to Europe unless buyers start paying in rubles, the economics of the so-called blue hydrogen have deteriorated. Green hydrogen made of electrolysis from renewable energy is now the preferred choice of future hydrogen supply as governments target net-zero emissions and a reduction of reliance on Russian gas.

Scalability and costs are still issues to be overcome in green hydrogen production. Yet, Europe’s dependence on natural gas supply from Russia and Putin’s war in Ukraine have prompted the European Union and many of its member states to embrace green hydrogen development, preferring it to the so-called blue variant made of natural gas with carbon capture and storage (CCS).

Companies in Europe and U.S. allies such as Australia have recently announced major green hydrogen deals and projects. Although costs of green hydrogen production are yet to drop to economically scalable and feasible levels, the prospect of using home-grown energy resources—wind and solar—rather than relying on gas imports from Russia is now paramount for policymakers in the West.

https://oilprice.com/