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Hydrogen derivatives could be a cost-effective way to transport low-cost renewable energy. Converting renewable electricity to hydrogen effectively increases the distance along which transporting it can be cost effective. Hydrogen pipelines have transport costs that are 10 to 20 times lower per unit of energy than traditional power lines. However, pipelines are also only cost effective for distances of up to a maximum of 5,000 kilometres. For anything longer, shipping becomes the most attractive option - though hydrogen needs to first be converted to another carrier, since compressed hydrogen has a low density per unit of volume. There are two main options for this: use carriers where hydrogen can be recovered, or use carriers that can be directly deployed without reconversion to hydrogen. For the first option, the possibilities include liquid hydrogen and liquid-organic hydrogen carriers (or “LOHC”). Currently, liquefaction requires the equivalent of between 30% and 36% of the energy contained in the hydrogen, which potentially decreases to about 16% over the long term. LOHC are oil-like molecules that can react reversibly with hydrogen. This remains small in scale, however, and would require the equivalent of as much as 40% of the energy contained in the hydrogen to recover hydrogen from the molecule. Hydrogen can also be converted to other commodities like ammonia, methanol, and jet fuel, which are more dense than compressed hydrogen. This conversion involves additional investment for facilities, and added energy losses for each step, but also lower transport costs. Among these commodities, only ammonia has the dual possibility of being used directly or being reconverted to hydrogen. Currently, 74% of oil, 28% of methanol, 22% of steel, and 10% of ammonia is globally traded, so green versions of these commodities could utilize existing infrastructure (energy should be transported in the form in which it will be used, and hydrogen offers an intermediary product). About 45% of the hydrogen demand expected by 2050, in a scenario where global warming is successfully limited to 1.5°C above pre-industrial levels, will be in the form of these commodities - creating significant opportunities to transport energy in these forms. In such a future, only accounting for hydrogen and ammonia, about a quarter of global hydrogen production could be globally traded. In addition, 70% of ammonia would be used directly (as feedstock, fuel for shipping, and, to a smaller extent, for power generation), while only the remaining 30% would need to be reconverted to hydrogen.

Hydrogen and New Possibilities for Energy Trade