Shell pushes hydrogen into the “possible future”
Posted by | Michael Ratcliffe
With the recent publication of its Energy Transition Strategy, is Shell replacing hydrogen with LNG (liquified natural gas) in its drive towards net-zero?
In 2022, Shell said “Hydrogen can play a crucial role in helping the world reach net-zero emissions” and emphasized that they already had more than fifty H2 retail sites in Europe and the USA. Two years later, its Energy Transition Strategy 20241 scarcely mentions hydrogen as it outlines its revised energy transition plans to evolve into a net-zero emissions energy business.
Where hydrogen is mentioned, it implies that Shell doesn’t consider it to be a key renewable for the 2020s, with phrases such as “we are exploring”, “while investing in the future”, “we see potential in the long-term”, “to meet customer needs after 2030”, and “[in] the long-term when it becomes cost competitive.” The report also clearly states that Shell is currently looking to LNG as a “critical fuel in the energy transition”, along with solar and wind, but for the time being, not hydrogen.
LNG has the potential to significantly cut GHG (greenhouse gas) emissions with the right engine design, and it is an ideal substitute for coal in heavy industry where it could cut emissions by 50%. LNG also has the capacity to fuel approximately 5% of the existing operating shipping fleet and 25% of the vessels in the order book transitioning from traditional bunkers to LNG would result in a 23% reduction in emissions when engines are designed to minimize “methane-slip.” This is not ideal but is better than doing nothing. Shell also says it has already developed the world’s largest network of LNG bunkering stations along major trade routes, which it views as essential for shifting the global shipping fleet away from low cost, high-polluting bunker oil.
Shell’s report helps explain their withdrawal from both the California and UK passenger car hydrogen markets, and retaining only a very limited number of passenger car pilots in Continental Europe. Just a few years ago, Shell appeared poised to lead the charge into renewables, however, its strategic shift towards the far less risky semi-green LNG market suggests a transition from a leader position to a follower role in renewable electricity and relegation, and to a bystander role in the hydrogen transport market.
However, Shell is still reported to be building Holland Hydrogen 1 in the Port of Rotterdam, the largest green hydrogen production facility in Europe. Plans for the plant’s output are understood to involve replacing grey hydrogen at Shell’s nearby refinery and connecting it to the HyTransPort pipeline. Upon completion in 2025 this pipeline would allow the company to sell hydrogen to a range of Dutch cities and infrastructure projects. It will be interesting to see if Shell makes any announcements about this project and if it extends beyond a pilot phase designed to gain insights into the hydrogen market potential, with the Netherlands serving as its sandpit.
References
Tags: Energy, Hydrogen, Renewables
