Economic Report 2019

Hydrogen Hydrogen will also form a central element of the next phase of decarbonisation in the UK, as confirmed by the CCC. As a fuel source, hydrogen does not produce any harmful emissions when used, emitting only heat and water vapour. Hydrogen can be produced both via reformation of natural gas (methane) and from electrolysis; both sources of supply will be needed to help meet future energy demand. Methane reformation provides a more immediate basis for the first phase of development, since it will be some time before there are reliable surpluses of renewable electricity available to produce sufficient quantities of hydrogen, especially as the demand for electricity is expected to increase significantly through the use of electric vehicles. However, it should be acknowledged that the production of hydrogen through methane reformation needs to be combined with CCUS to be a net-zero source of energy. The development of a hydrogen-based economy provides a number of advantages and opportunities for the oil and gas industry, and the wider economy. This includes the re-use of the existing gas network infrastructure for domestic and industrial use, rather than electrifying all forms of energy supply — helping to provide a diverse mix of fuel types to aid decarbonisation in the most effective manner. The potential impact that the use of hydrogen could have on European GHG emissions is outlined in Figure 29. By 2050, emissions savings of around 800 million tonnes of CO 2 e per year (19 per cent of current emissions) could be achievable. 41

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Figure 29: The Potential for Reducing Europe’s GHG Emissions via Hydrogen

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1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

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GHG Emissions (Million Tonnes of CO 2 e per Year)

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European GHG Emissions in 2016

Transport Reductions

Residential and Commercial Reductions

Industry Reductions

Power Generation Reductions

Remaining Emissions in 2050

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Source: Sintef

Hydrogen and other decarbonised gases are particularly suited to meet a large proportion of industrial and domestic heating, as well as the requirements of heavy, long-distance freight services. Increasing the use of natural gas for freight and public transport will be an important stepping stone to this objective.

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41 Sintef, IFP – Hydrogen for Europe pre-study

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