Nothing is more central to hitting the goals of the Paris climate agreement than the use of green hydrogen and its derivative green ammonia. They could play a prominent part in the transport sector and heavy industry in their quest to hit net-zero targets. And the sooner they are adopted by the relevant companies, the sooner they will reach scale and become more widespread.
Indeed, that’s what Fortescue Future Industries (FFI) is doing with German polymer-maker Covestro. FFI will supply up to 100,000 tons of green hydrogen equivalent per year, starting as early as 2024. Hydrogen is widely used today in oil refining and the production of fertilizers. To make an even bigger footprint, however, it must expand into transport, buildings, and power generation.
Today, 95% of hydrogen is produced using natural gas reforming. The goal, though, is to create it from renewables using electrolysis. That is what FFI and Covestro aim to do — a move that increases the scale and thus improves the possibility that other businesses will benefit. The one caveat is that producing hydrogen from low-carbon sources is expensive. But the International Energy Agency says that those prices could fall by 30% by 2030.
Nylon, polyethylene, polyester, Teflon, and epoxy are examples of synthetic polymers. Silk, wool, DNA, cellulose, and proteins are natural polymers.
The Problem
Chemical bonding is used to make synthetic polymers. Heat and pressure can alter those bonds — an energy-intensive process. Making polymers requires a lot of thermal energy. According to an abstract on springer.com, reducing primary energy demand is the most potent thing producers can do — if they want to cut energy intensity in the polymer industry. That is followed by improving energy efficiencies.
Plastics are polymers. Since 1983 the global plastic industry has grown more than 500 %, and springer.com says that in 2012, 288 million tons of plastics were consumed. For example, in Germany, the plastics industry has a significant economic presence, and it represents 6% of that country’s domestic industrial production. In Australia, it is the second-largest manufacturing sector.
The resulting greenhouse gases are concerning. Despite the technological prowess of the polymer industry, it remains fixated on the use of fossil fuels. As a result, plastics producers across the globe will want to jump-start their efforts to cut energy consumption and reduce energy intensity — especially in light of the steps to combat changes, the site says.
That opens the door to green hydrogen and green ammonia in the chemical sector.
“We are delighted that FFI shares our circular economy vision and is willing to take courageous steps to foster the urgently needed market ramp-up for green hydrogen,” Markus Steilemann, chief executive of Covestro said “Our collaboration with FFI underlines our ambition to pioneer the transition towards a circular economy and climate-neutral production. Green hydrogen and its derivatives play a key role for the chemical industry, both as an alternative feedstock and a source of clean energy.
“The transition towards green hydrogen and its derivatives will be an important step forward in our efforts to offer more sustainable products that also reduce the carbon footprint of our customer industries,” Dr. Steilemann added.
The Solution
Green hydrogen is made from renewable energy, and it produces no pollution. Its only by-product is steam. Under its chairman, Andrew Forrest, FFI wants to grow it to 15 million tons of green hydrogen per year by 2030 and ultimately expand that to 50 million tons per year.
Covestro uses hydrogen and its derivatives as feedstock to produce high-performance polymers. As part of a broader circular economy strategy, Covestro is committed to leaping from energy-intensive manufacturing processes to those that are fossil-free and energy-efficient. To that end, it would rely more and more on green hydrogen made from clean energy. The partnership with FFI is an essential milestone toward this goal.
At the same time, construction equipment maker JCB signed a multi-billion agreement to supply green hydrogen. JCB will buy 10% of Fortesque’s output, which will make it the biggest supplier of clean hydrogen to the United Kingdom. JCB is investing about $136 million in “super-efficient hydrogen engines.” Anthony Bamford, chair of JCB, calls this move a critical step forward in getting green hydrogen into the market.
Notably, FFI is acquiring Sparc Hydrogen, which is developing green hydrogen produced by sunlight and water. That is different from hydrogen made from renewable energy electrolysis. It could be critical to producing green hydrogen at a larger and more affordable scale. FFI is also building one of the largest electrolyzer factories in the world in Australia — the traditional way to split hydrogen and oxygen. The company wants to show that the decarbonization of heavy industry is doable.
“There is irrefutable scientific evidence that the planet is warming. Green hydrogen is a practical, implementable solution to decarbonize hard to abate sectors, including heavy industry,” FFI Chief Executive Julie Shuttleworth said.
The Obstacles
Siemens, which is building an electrolyzer facility in Germany, has said that getting green hydrogen to scale will take time. New production lines for the electrolyzes are being set up on 2,000 square meters at a cost of $33 million. Electrolyzers, which create an electric current to split the hydrogen and oxygen from water, must be the focus.
“For us, hydrogen is an important component of the future energy world,” says Christian Bruch, chief executive of Siemens Energy. “For this to be economically viable, the manufacturing costs for electrolyzes must be significantly reduced. With our new production facility, we are helping to make hydrogen competitive sooner.”
The Potential Results
The deal between FFI and Covestro will allow the polymer maker to reduce greenhouse gas emissions by up to 900,000 tons of CO2 per year by replacing fossil-fueled grey hydrogen and its derivatives with green hydrogen.
FFI anticipates its green hydrogen production will hit 15 million metric tons a year by 2030 before ramping up to 50 million metric tons annually.
“That future is right upon us,” adds Dr. Forrest, chair of Fortescue. “Developing countries want to see this happen. They do not want to be hogtied by oil and gas companies. Think you will put carbon back into the ground? This is the perennial lie. There’s only one solution: clean hydrogen, which produces no carbon.” ‘Blue hydrogen’ produced from natural gas “just kicks the can down the road.”
In its Hydrogen Economy Outlook, Bloomberg New Energy Finance says that green hydrogen could supply 24% of the world’s energy demands by 2050 while cutting CO2 levels by 34%. With new investments like the ones being made FFI and Siemens — and the manufacturers buying their output — hydrogen produced from wind and solar could cost between $0.8 and $1.6 a kilogram. That is roughly the cost of natural gas.
