SBS Consulting's research is aimed at analysing current trends and prospects for the development of the hydrogen economy in Russia and globally up to 2030. The report focuses on the dynamics of hydrogen consumption, hydrogen production technologies, economic aspects, as well as an assessment of the sustainability of various hydrogen production methods to changes in market conditions and raw material prices.

Hydrogen consumption dynamics

Global hydrogen consumption:

• In 2020, global consumption of pure hydrogen and hydrogen blended with other gases was 75 million tonnes and 44 million tonnes, respectively.
• By 2030, the consumption of hydrogen is expected to increase to 100 million tonnes and that of hydrogen blended with other gases to 56 million tonnes, equivalent to an average annual growth rate of 29%.

Major hydrogen consumption segments

1. Oil refining:
   
   

   The highest growth due to increased demand for petroleum products, including low sulphur products.

2. Ammonia production:
   
   

   Steady growth in hydrogen consumption for ammonia production.

3. Methanol production:
   
   

   Increased use of blended hydrogen for methanol production.

4. Transport:
   
   

   Significant growth in hydrogen demand in the transport sector, especially in the US, China, Japan, and the EU.

5. Metallurgy:
   
   

   Increase in hydrogen consumption in metallurgical industry.

Hydrogen classification and hydrogen production technologies

1. Grey hydrogen:
   
   

   — Produced by steam methane reforming or coal gasification.

   — This type accounts for more than 97% of global hydrogen production and is characterised by high CO2 emissions.

2. Blue hydrogen:
   
   

   — Produced by the same methods as grey hydrogen, but using CO2 capture and storage (CCUS) technologies.

   — This technology is at the stage of commercialisation.

3. Yellow and green hydrogen:
   
   

   — Produced by electrolysis using electricity from nuclear power plants (yellow hydrogen) or renewable energy sources (green hydrogen).

   — Alkaline electrolysers are the most common for producing this type of hydrogen.

Comparative characterisation of hydrogen production technologies:

1. CO2 emission:
   
   

   — Coal with CCUS: 4.1 kg CO2 / kg H2

   — Methane with CCUS: 3 kg CO2/ kg H2

   — Green hydrogen (WPP, SPP): almost zero CO2 emission

2. Production costs:
   
   

   — In Russia, the main and cheapest technology is steam methane reforming due to the low price of natural gas.

Demand for hydrogen in Russia

Major hydrogen consumption segments in Russia:

1. Petroleum products:
   
   

   — In 2020, Russia refined about 270 mln tonnes of crude oil, accounting for 6% of global oil refining.

   — About 22 mln tonnes of hydrogen is used, and demand is expected to grow by 8% by 2030.

2. Chemical industry:
   
   

   — In 2020, hydrogen demand for ammonia and methanol production was 28 mln tonnes and 700,000 tonnes respectively.

   — Demand is expected to grow to 34 mln tonnes for ammonia and 1 mln tonnes for methanol by 2030.

Economic aspects of hydrogen production in Russia

1. Steam methane reforming:
   
   

   — The low price of natural gas makes this technology the cheapest.

   — Costs are expected to rise by 20% by 2030 due to a 50% increase in natural gas prices.

2. Coal gasification:
   
   

   — More expensive than methane conversion due to higher CAPEX.

   — Expected cost increase of 6% by 2030 due to 20% increase in coal prices.

3. Electrolysis:
   
   

   — Cost of electrolysers is expected to decrease by 30-40% by 2030.

   — Green hydrogen will remain 2-3 times more expensive than other technologies, despite reduction in the cost of generation at SPP and WPP by more than 20%.

4. CCUS:
   
   

   — The technology is under development.

   — It will potentially become economically optimal for hydrogen production.

Conclusion

Hydrogen economy is a promising area for development both in Russia and globally. The demand for hydrogen in various sectors of the economy is expected to grow significantly. The development of hydrogen production technologies, especially using renewable energy sources and CCUS, will reduce the carbon footprint and make hydrogen a competitive fuel of the future.

Successful development of hydrogen economy in Russia requires investments in infrastructure, technology development and government support, which will enable the country to take a leading position in the global hydrogen market by 2030.