Producing blue hydrogen from hydrocarbons and sequestering or using the captured carbon dioxide (CO2) is one way of transitioning to the ultimate large-scale production of green hydrogen from renewables. By 2030, the production of blue hydrogen is expected to reach an estimated 22 million tonnes per annum (Mtpa) globally, and account for 46% of low-carbon hydrogen production, based on planned projects. There are four main options for capturing CO2 during hydrogen production: steam methane reforming (SMR), coal gasification, autothermal reforming (ATR), and partial oxidation (POX). Currently, approximately 84% of all hydrogen produced globally uses the SMR process, with the remainder using coal gasification. However, ATR is gaining in popularity due to its high CO2 capture rate potential and superior energy efficiency. As a result, we anticipate that most new carbon capture and storage (CCS)-enabled hydrogen production projects this decade will deploy ATR, resulting in it holding a 37% market share by 2030 compared to zero currently. In terms of regional focus and projects in the pipeline, ATR will be most popular in the US and Europe which have set net zero targets backed by policies and funding support.

Processes for capturing CO2 from blue hydrogen
SMR involves reacting natural gas with steam in the presence of a catalyst at high temperatures to produce hydrogen. When CO2 emitted in the process is unabated, the resulted hydrogen is referred to as grey hydrogen. If CO2 is captured and stored/utilized, the hydrogen produced is known as blue hydrogen. In a conventional SMR-based hydrogen production unit, there are two streams of CO2. Around two-thirds of the CO2 is in concentrated form during hydrogen production. The remaining third is generated in dilute form in the flue gas from burning natural gas for heating purposes. This second stream is generally not captured, resulting in an overall capture range of around 60%. If CO2 from the flue gas was to be captured, a process that is very expensive due to low concentrations because of the laws of thermodynamics, an overall capture rate of around 90% would be achievable.

The ATR process combines hydrogen production and heating in a single reactor, resulting in a single concentrated stream of CO2. Compared to SMR, this decreases the cost of CO2 capture and increases the potential capture rate to 90% and above. The overall energy efficiency of ATR is also higher as the energy required in the form of heat is supplied mainly by the exothermic reaction. Furthermore, ATR has faster start-up and response times for transient operations. In ATR, pure oxygen is supplied for combustion which results in a concentrated and high-pressure stream of CO2, making carbon capture integration easier. When it comes to ATR, the need to pre-treat feedgas requires significant investment with the need for an oxygen production plant also making the technology costly compared to SMR and POX. In developing carbon markets, carbon prices could compensate for ATR’s higher capital expenditure (capex) given its higher capture rates. In the US, the Texas-based Enbridge Ingleside Energy Center (EIEC) is looking to commission a CCS project using ATR in 2029. This project will have nameplate capacity of 1.4 Mtpa of blue hydrogen and aims to capture 95% of the CO2 generated from the production process. 

Most ATR projects aim for a CO2 capture ratio of 95%, as in the case with the proposed H2H Saltend project in the UK and the Air Products Hydrogen Energy Complex project in Canada.

POX occurs when sub-stoichiometric oxygen and hydrocarbon mixture is combusted in a reformer to obtain hydrogen-rich syngas. The POX process does not require steam which is generated using reaction waste heat recovery. While not widely used currently, oil major Shell is planning to install natural gas-based POX technology at the upcoming Zero Carbon Humber project in the UK. Grannus is also set to implement POX technology at the California-based Carbon TerraVault 1 project in the US.

Coal gasification currently holds a 13% market share of produced hydrogen equipped with CCS. However, it is the most emissions-intensive process and will be used in only a handful of upcoming blue hydrogen projects such as the US-based Wabash CCS project which will capture 1.65 Mtpa of CO2 while producing 0.3 Mt of hydrogen from 2027. Installing CCS requires a long lead time before a return on investment and is only meaningful for plants that expect to keep producing hydrogen for decades to come, which is the not case with coal-fired plants.

ATR, which combines the best of SMR and POX, with its higher energy efficiency and higher hydrogen production efficiency compared to POX, would lead to that the bulk of new CCS-enabled hydrogen production plants are expected to adopt ATR technology (Figure 1).

This year, 84% or 3.7 Mt of blue hydrogen will be produced using the SMR process, with the remaining 0.5 Mt and 0.2 Mt produced by coal gasification and petcoke gasification respectively. Petcoke gasification is not included in the four main methods discussed here and has only one operational project. By 2030, ATR is expected to grow its market share to 37% and account for around 8.2 Mt of annual blue hydrogen production. Furthermore, all new ATR-based projects will be greenfield projects. Some projects contemplating ATR with CCS will replace existing SMR plants, such as Baytown and IGP Blue Methanol, but the ATR unit will be new. Half of the SMR projects in 2030 will be brownfield. Topsoe, Johnson Matthey, and Air Liquide are among the leading ATR suppliers worldwide. Given the scale of the growing ATR market, we expect that partnerships will be made to develop and scale ATR technology, for instance, Technip Energies and Casale have united to co-license the ATR technology. Thyssenkrupp and KBR, dominant players in the SMR market, also supply ATR technology.

With more stringent regulations and ambitions to reach net zero by 2050, Europe and North America together account for 53% of the CCS-based SMR market. By 2030, the two regions will account for 100% of the ATR market, based on expected operational production and driven by high decarbonization ambitions, policies and funding. The remaining SMR-based projects will be in Asia (31%) and the Middle East and Africa (17%). As of now, there are only four projects (two operational and two planned) based on coal gasification and three planned projects based on POX.