As more corporations and countries embrace decarbonization or “net zero” targets, coal will still have its place in the energy supply chain, and ironically, some new opportunities may emerge. The expected shift in the transportation sector to battery-electric and hydrogen-powered vehicles will create new strains on limited supply chains. Battery-electric vehicles will require more electricity, which will drive power demand and ultimately benefit coal. What you might find surprising about hydrogen is that most of it is derived from fossil fuels, with natural gas and coal accounting for 70% and 27%, respectively.
The IEA Clean Coal Centre in the U.K. recently conducted a webinar on hydrogen from coal. Working with the IEA Clean Coal Centre, we have published a five-page article based on that webinar that explains the relationship between hydrogen and coal. By 2050, hydrogen demand could reach 650 million metric tons per year, roughly five times the size of current production levels. Nearly 30% of that growth will come from the transportation sector.
Hydrogen is classified as either grey, blue or green. Hydrogen produced by reforming natural gas or coal gasification is referred to as grey hydrogen. Blue hydrogen is grey hydrogen that includes carbon abatement, such as carbon capture utilization and storage (CCUS). Green hydrogen is produced through the electrolysis of water, similar to charging a massive battery. Interestingly, the carbon intensity of blue hydrogen is lower than green hydrogen derived from electrolysis that uses electricity from a grid primarily powered by fossil fuels. The article also highlights several projects that are operating or under construction in the U.S., Australia and China.
The key to increased coal utilization in the blue hydrogen sector is CCUS, and steady advancements are being made in this area. Beyond enhanced oil recovery and sequestering CO2 in porous geologic formations, companies are looking at locking CO2 in concrete. This month in Developments to Watch (see p. 10), Coal Age recognizes the winners of the $20 million NRG COSIA Carbon XPRIZE, a prize that set out to convert CO2 emissions into valuable products. The winning teams developed solutions aimed at reducing CO2 emissions associated with concrete, which is currently the world’s most abundant human-made material and accounts for 70% of global CO2 emissions.
Another important aspect of these solutions is that they need to be applied locally to succeed. Ideally, the blue hydrogen plant would be located near existing coal operations and they would need to be able to apply some of these CCUS strategies locally. The blue hydrogen plant would need a hydrogen offtake agreement and a major ready-mix concrete supplier looking to sequester CO2 in their product for carbon offsets. Investing and participating in these programs could ultimately benefit coal operators and the surrounding communities.
