Is the current gas crisis undermining the future of blue hydrogen?

You can win the race: renewables-powered hydrogen is now outcompeting the traditional gas-based hydrogen produced via SMR.

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Hydrogen production costs more than tripled compared to last year, to an average of over 7/kg in 2022, driven by record high gas prices -accounting now for almost 90% of OPEX.

Hence gas-based hydrogen is today around 30% more expensive compared to wind-powered electrolytic hydrogen.

We would need gas prices at below $25/mmbtu to make gas-based hydrogen cost-competitive again. according to forward curves gas prices are set to remain above this level until mid-2025…

Hence, record high gas prices could speed up the scale-up of renewables-based hydrogen and speed-up the transition from SMR-based hydrogen.

What could be the implications for blue hydrogen produced via SMR+CCUS? is the window of opportunity closing down? is the current gas crisis undermining the future of blue hydrogen?

Source: Greg Molnar (LinkedIn)