Wood Mackenzie said demand for low-carbon hydrogen in the refining industry could reach 50 million tonnes per annum (Mtpa) by 2050 under the green transition effort. Green hydrogen is produced from renewable sources, while natural gas produces blue and grey hydrogen. The grey hydrogen has a similar process to the blue, but without the capture of carbon dioxide, while the pink hydrogen is produced through nuclear electrolysis. Refining is one of the largest hydrogen markets, accounting for about 32Mtpa, or 30% to 35% of global hydrogen demand in 2020.

Hydrotreating and hydrocracking processes are used to reduce sulfur content in finished products and increase production of transportation fuels, respectively, and are the main processes that consume more than 90% of hydrogen in the refining industry. However, more than 65% of the hydrogen demand in the refining process is met by hydrogen supplied by by-products from catalytic reformers and ethylene crackers, which is unlikely to be replaced by low-carbon hydrogen.

Any shortage of hydrogen demand can be met by gas-based steam methane reforming and the production of coal, which together account for about 32% of refinery hydrogen demand. Low-carbon hydrogen has the potential to replace dedicated hydrogen as feedstock if it becomes cost-competitive and policy support develops over time, however, the real game changer will be the replacement of fossil fuels in combustion applications Generate heat and steam, which will provide a larger market for low-carbon hydrogen in refining, with a potential market size of 40Mtpa by 2050, reducing carbon emissions by up to 300Mtpa or about 25%. Therefore, the total potential demand for low-carbon hydrogen in the refining sector could be as high as 50Mtpa by 2050.

The global hydrogen industry is expected to reach $183 billion by 2023, up from $129 billion in 2017, according to Fitch Solutions. French investment bank Natixis estimates that hydrogen investment will exceed $300 billion by 2030.

In an earlier report, Wood Mackenzie said global demand for low-carbon hydrogen would surge from less than 1 million tonnes today to 223 million tonnes by 2050. This will initially be driven by ammonia, which will account for 48% of total demand by 2025, followed by the power sector from 2036, which will drive 31% of demand by 2050. Ammonia is mainly used in fertilizers as well as in industrial applications including the manufacture of plastics, textiles, pesticides, automobiles and cosmetics.

Lower costs and high carbon prices are needed to make low-carbon hydrogen competitive with dedicated fossil fuel hydrogen, the report said. By the early 2030s, higher carbon prices of $100 to $150 per ton will be needed for low-carbon hydrogen to compete in refinery combustion. In the long run, green hydrogen must cost less than $1.50 per kilogram to compete with natural gas and fuel oil combustion. Keywords: engineering construction, engineering news

In addition to lowering the cost of low-carbon hydrogen, higher carbon prices, financial incentives, and stronger policy support are needed to accelerate adoption in the refining industry, and a dedicated national hydrogen roadmap will help increase low-carbon hydrogen in many penetration in the field. Refiners must also consider other low-carbon technologies, such as electric heating, carbon capture and storage in major carbon emitters, and biomass gasification to further decarbonize the industry. The use of renewable energy and low-carbon feedstocks and products will also help reduce emissions.Editor/XingWentao