Hydrogen can be termed “blue hydrogen” when produced from natural gas (or sometimes coal) through steam methane reforming (SMR) or autothermal reforming (ATR), and the resulting CO₂ emissions are captured and stored rather than released into the atmosphere. The CO₂ is stored underground using carbon capture and storage (CCS) technology. As a result, blue hydrogen is sometimes considered carbon-neutral, since its emissions are prevented from entering the atmosphere.
Blue hydrogen can bridge the existing infrastructure gap with low-carbon goals and can be considered a transitional fuel before we can shift completely towards green hydrogen.
Why Blue Hydrogen?
Across the globe, industries are undergoing pressure to tackle sustainability challenges. As anthropogenic emissions have already led to a global temperature rise of approximately 1.58°C above pre-industrial levels.
In response, a significant number of countries are taking action. By the end of 2023, nearly 145 nations had either announced or were considering net-zero targets, together accounting for around 90% of global emissions.
However, achieving these goals means we cannot focus solely on one part of the puzzle. To keep temperature rise in check, emissions from both energy production and energy utilization need to be significantly reduced. Energy efficiency, electrification, and renewable energy sources have the potential to deliver required emissions reductions. However, hydrogen will play a critical role in decarbonizing sectors where alternative solutions remain either underdeveloped or economically unviable.
On the demand side, hydrogen demand continues to grow, but remains concentrated in traditional applications. Ammonia production, Petroleum Refining, and Methanol Production combined account for ~90% of the. Novel applications in heavy industry and long-distance transport account for less than 0.1% of hydrogen demand, whereas Net Zero Emissions (NZE) Scenarios require hydrogen to fulfill 40% of these applications by 2030.
As of 2023, global hydrogen production reached approximately 97 million tonnes. The vast majority of this—over 99%—was derived from fossil fuels, primarily through processes like steam methane reforming (SMR) and coal gasification, commonly referred to as “grey hydrogen.” Low-emissions hydrogen, including both “blue” and “green” hydrogen, constituted less than 1% of total production.
The major issues for low-carbon hydrogen production are related to cost and scalability. According to the Oxford Institute of Energy Studies (OIES), the average cost of producing hydrogen through methane reforming ranges between $1.5 and $1.8 per kilogram, influenced by natural gas prices. When carbon capture, utilization, and storage (CCUS) technologies are incorporated, the cost rises to between $2.1 and $2.4 per kilogram. In contrast, green hydrogen production—using electrolysis powered by renewable energy—costs significantly more, typically ranging from $3.3 to $6.5 per kilogram, depending on the price of clean electricity and the type of electrolyser technology employed.
While deployment and scalability issues remain largely unsolved in “green” hydrogen production, “blue” hydrogen production is gaining traction due to its relatively easier deployment and lower production costs.
Innovations Addressing Blue Hydrogen’s Challenges
As blue hydrogen gains traction as a low-carbon energy source, several innovations are emerging to overcome its environmental and technical hurdles. Some of these key innovations are:
Biogenic Methane Reforming: To reduce blue hydrogen’s dependence on natural gas, industry players are exploring biogenic methane as an alternative feedstock. Colorado-based startup RenewH2 has developed a process to reform biogenic methane for blue hydrogen production. The company aims to harness Wyoming’s largest biogenic methane source to produce hydrogen, thereby decreasing reliance on non-renewable fossil fuels.
Reduced Cost Production Technologies: Reducing the levelized cost of hydrogen (LCOH) is critically important to scale blue hydrogen technology and to mitigate the cost issues associated with current production technologies. To address cost issues, players are developing reduced-cost production technologies. The oil and gas giant Shell has developed the Shell Blue Hydrogen Process (SBHP) to significantly enhance the affordability of greenfield projects for blue hydrogen production. The technology combines Shell’s proprietary gas partial oxidation (SGP) technology with ADIP ULTRA solvent technology. SGP technology is an oxygen-based system with direct firing in a refractory-lined reactor. Unlike auto-thermal reforming (ATR), the partial oxidation reaction in SGP does not require steam as a reactant. Instead, high-pressure steam is generated using waste heat from the reaction, which meets the steam demand of the SBHP process and some internal power consumers. This eliminates the need for feed gas pretreatment, simplifying the process line-up. Furthermore, SGP technology is a non-catalytic, direct-fired system that is robust against feed contaminants such as sulfur, enabling it to accommodate a wide range of natural gas qualities and providing refiners with greater feed flexibility. SBHP can reduce the levelized cost of hydrogen by 22% compared to the best offerings on the market today.
Enhanced Carbon Capture Efficiency with Reduced Cost: To counter the issues of low carbon capture efficiency and high cost involved in existing blue hydrogen technologies, certain technologies have been developed. Players such as Johnson Matthey and Shell have developed the low-cost, high-efficiency technologies for blue hydrogen production. Johnson Matthey LCH™ technology enables the capture of up to 99% of the CO2 generated during hydrogen production. Whereas, Shell’s SBHP Process captures a similar amount of CO2 with reduced cost of capture.
Conclusion
Blue hydrogen presents a pragmatic pathway to decarbonize hard-to-abate sectors, offering a lower-carbon alternative to traditional hydrogen production while leveraging existing fossil fuel infrastructure. Despite valid concerns around cost, methane leakage, and carbon capture efficiency, ongoing innovations in production technologies, feedstock diversification, and emissions monitoring are rapidly improving its viability. While green hydrogen remains the long-term ideal, blue hydrogen can serve as a vital transitional solution, bridging the gap between today’s fossil fuel dependence and tomorrow’s clean energy systems. To fully discover its potential, balanced regulations, sustained investments, and continued technological advancement will be imperative.
