As governments and organizations around the world seek pathways to reduce carbon dioxide (CO2) emissions, hydrogen is increasingly part of the discussion. This effort has significant momentum with $8 billion in new federal funding now available for development of clean hydrogen as part of the Infrastructure Investment & Jobs Act.
The incentives were sweetened further with the August 2022 enactment of the Inflation Reduction Act (IRA). Section 45V of the act creates a new 10-year production tax credit (PTC) program that adds significant new financial rewards for clean hydrogen production, depending on the level of carbon intensity.
Over the next four fiscal budget cycles, the U.S. Department of Energy (DOE) is authorized to establish at least four regional clean hydrogen hubs to demonstrate the production, processing, delivery, storage and end uses of clean hydrogen. In consultation with the Environmental Protection Agency and others, the DOE will now develop standards for the carbon intensity of hydrogen production from a range of energy sources.
Hydrogen has long been used in petroleum refining, fertilizer production and general industry. Although most hydrogen production utilizes steam methane reforming (SMR) at this time, hydrogen can be created many ways, using a variety of inputs or sources, each with a different impact on the environment. In addition to SMR, other production methods can include electrolysis, gasification and pyrolysis. The inputs or feedstocks that go into production can vary from traditional sources, such as oil or coal, to water coupled with renewable or nuclear energy.
Though hydrogen itself is a carbon-free energy resource, conventional production methods emit large volumes of CO2 and account for an estimated 2% of global carbon emissions currently. New federal funding will enable significant research and development to help tackle the technical and economic challenges that must be overcome if hydrogen is to achieve its potential as a zero-emissions energy resource.
Changing Colors in the Rainbow
Hydrogen offers several benefits in the ever-changing power and industrial markets as an alternative clean, reliable fuel source when produced using technologies purposed for decarbonization. Budding market opportunities like rising transportation penetration, elevated production of hydrogen-intensive renewable fuels, emerging long-term energy storage capabilities, and growing integrated or hybrid energy systems increase the need for hydrogen production.
This can be more easily shown and understood by analyzing the “hydrogen rainbow” — a system of categorizing energy sources, production processes and relative emissions based on colors. The colors of the hydrogen rainbow aren’t officially standardized across the industry, as definitions are continually shifting due to several variables.
We have previously discussed the method of production that each hydrogen color represented. Now, with the momentum of federal funding, these colors may shift further as decarbonization goals take the driver’s seat and finding “greener” ways of producing and using hydrogen gain new emphasis. The changes are happening so rapidly that our hydrogen rainbow is turning into more of a hydrogen kaleidoscope as the color definitions begin to mix together. The most recent categories are defined as follows:
- Green — Green hydrogen is made from renewable sources such as wind or solar. Electrolyzers are paired with renewable assets that are frequently curtailed, creating hydrogen by splitting the water into hydrogen and oxygen. This category emits zero carbon dioxide emissions.
- Yellow — Hydrogen produced via electrolysis from available grid power, which may be a mixture of renewable and non-renewable energy sources.
- Pink — Previously, hydrogen produced using nuclear power was called red hydrogen. Now this category has been further clarified as pink because it is produced through electrolysis of water, using electricity generated by a nuclear facility. While red hydrogen is produced via high-temperature splitting of water molecules using nuclear power as the energy source, pink hydrogen goes further by utilizing process heat to gain efficiencies in hydrogen production in small module and other advanced reactor designs.
- Turquoise — Made via pyrolysis, turquoise hydrogen uses natural gas as a feedstock. Though no carbon dioxide emissions are produced under this method, it creates a solid carbon byproduct that must be handled.
- Blue — Similar to the grey category, natural gas or other fossil fuels are used as feedstocks for an SMR that converts methane to hydrogen. Under this method, however, carbon emissions are captured and sequestered.
- Gray — Under this method, hydrogen is produced from natural gas, LPG or naphtha as feedstocks in an SMR process. Carbon dioxide emissions in this process are released into the atmosphere.
- Brown — Coal or petroleum coke may serve as feedstocks in a gasification process. Like the gray process, carbon dioxide is emitted into the atmosphere under this method.
Why Hydrogen?
As new standards, definitions and legislation regarding clean energy emerge, they may cause a shift in focus toward carbon intensity — and away from specific production methods — causing colors that now define various types of hydrogen production to shift further or even eventually go away.
There is no question that hydrogen has great potential viability as a carbon-free energy resource for transportation, industry and even power generation.
Trends indicate continued growth in hydrogen demand as new markets develop and user demand expands. With the federal government now jump-starting investment in clean hydrogen, it appears this energy source will gain serious traction as part of the overall global strategy for a net zero future.
Hydrogen can help position the existing fleet of natural gas power plants as even more valuable low-carbon resources for grid stability.
This post is part of a series that dissects the Infrastructure Investment and Jobs Act and addresses potential impacts of it on industries and infrastructure projects across the country. Learn more from these posts:
- Connectivity Is Critical to Enabling Infrastructure Act Investments
- Maximizing Federal Support Dollars for Transportation Projects
- Port Authorities Can Prepare for Federal Funding Opportunities
- Navigating the Waters of the Infrastructure Investment and Jobs Act
Editor’s note: This post was originally published Dec. 19, 2021, and has been updated for context and accuracy.