The report, released on Monday (May 23), highlighted that continued investment in blue hydrogen would deepen the UK’s vulnerability to gas price volatility and supply uncertainty.

At a time where gas price and supply is already at high volatility, as Europe is scrambles to wean itself off Russian fossil fuels, the IEEFA calls into question continued support for blue hydrogen.

The UK announced the British Energy Security Strategy, in April this year, which called for up to 10GW of low-carbon hydrogen by 2030, of which 5GW could be blue hydrogen.

However, the IEEFA report found that if blue hydrogen, produced from natural gas, with emissions reduced by carbon capture and storage, is used for heating, it would require one-third more natural gas than if the gas was used directly. Amounting to a 10% increase in natural gas imports in the UK alone.

Ana Maria Jaller-Makarewicz, Energy Analyst at the IEEFA and the report’s co-author, said, “Europe is facing three challenges, namely reducing gas price, offering a secure supply of energy, and continuing with its energy transition goals.

“There is only one way to meet all of them: Reduce gas demand. Investing in blue hydrogen production would do quite the opposite.

“The gas price crisis has invalidated the business case for blue hydrogen, which is an extension of the gas value chain.

“Investors willing to back these projects risk ending up with long-lived assets on their balance sheets that just don’t make sense.”

IEEFA’s blue hydrogen cost forecasts suggest the technology should lose government support to make way for green hydrogen, which it claims will become cheaper to produce by 2030.

Arjun Flora, Director of Energy Finance Studies, Europe at the IEEFA, said, “Looking ahead to 2030, the cost curve speaks clear.

“Since both the price of gas and UK emissions allowances have risen, not only is blue hydrogen no longer a low-cost technology, but its green rival will become cheaper to produce this decade and well before the end of blue hydrogen projects’ lifetimes – which makes blue hydrogen a bad investment.”

North American Hydrogen Summit  

H2 View is taking its events platform to America’s original clean hydrogen hub of California. Together with the California Fuel Cell Partnership (CaFCP), we will stage our North American Hydrogen Summit in San Francisco on July 14-15.

As our summit theme Building Bridges: Hydrogen hubs and investment suggests, the event will explore the $8bn of funding announced to create at least four regional hydrogen hubs in the US. These hubs will turbo-charge the nation’s progress toward heavy trucking and industrial sectors that run without producing carbon pollution – and they may just provide the path forward to a hydrogen-fuelled future.

With California and Texas vying to be America’s hydrogen capital today, where are the hubs of tomorrow? Further still, what can other states, and countries, learn from California’s success story? And how can we build bridges to a successful flow of international investment?

If you are a member of the CaFCP, be sure to grab your ticket at a discounted rate with a code that can be provided to you by the events team.

Full information about this event including attendance and sponsorship packages can be found here.