Abstract for: Understanding the risk of stranded assets for blue hydrogen production plants

Hydrogen can help tackle various critical energy challenges, since it offers ways to decarbonise a range of hard-to-abate sectors, including long-haul transport, chemicals, and iron and steel. However, currently hydrogen is almost entirely supplied from natural gas and coal. Thus, the hydrogen production market needs massive shift towards the capture of CO2 from hydrogen production from fossil fuels and significant supplies of renewable hydrogen from clean electricity. Establishing hydrogen supply chains on the basis of fossil fuels, as many national strategies anticipate, may be incompatible with decarbonisation targets and raise the risk of stranded assets. Our analysis show that several key techno-economic factors can significantly affect the contribution of different hydrogen production technologies. We found that across all scenarios, there is a considerable risk for early retirement of blue hydrogen production plants. Yet, the significance of risk and the average lifetime of those plants depend heavily on how the technologies (CCS, ATR and Electrolysis) will evolved in the next few decades.