CHF: Texas hydrogen will become competitive in the global market by 2030

The estimated decline in the cost of low-emission hydrogen produced in Texas to USD 1/kg for production from natural gas and USD 1.5/kg for production through water electrolysis by 2030 will enable Texas to compete with other hydrogen exporters on the global market. The news was reported by international outlet Platts, citing a report by the Center for Houston's Future.

The Center for Houston's Future (CHF) report was published on 23 May, one day before Houston was selected as one of four international hydrogen clusters by the World Economic Forum (WEF). The other three regions selected by the WEF are Geleen in the Netherlands, the port of Antwerp in Belgium and the Ohio River Valley.

"The timing of this report and the timing of the WEF announcement are important because they show policymakers in Austin, Washington and the rest of the world that Houston has an opportunity to help use low-emission hydrogen to decarbonise the rest of the world," said Brett Perlman, executive director of the Center for Houston's Future.

Without support, hydrogen from natural gas will be the cheapest

The report analysed the projected development of the costs of producing low-emission hydrogen using different technologies and fuels. Based on current policies, which do not take into account proposed operating support for hydrogen production, the study's authors estimate that the cost of hydrogen produced through water electrolysis will fall to USD 1.5-1.9/kg by 2030. Analysts at S&P Global Commodity Insights estimate the current cost of hydrogen produced this way in Texas at USD 4.1/kg, including capital costs.

According to the study's authors, the production of hydrogen from natural gas using carbon capture and storage technologies could fall to as low as USD 1/kg by 2030. This is also the target set for 2030 by US Energy Secretary Jennifer Granholm under the Hydrogen Shot initiative.

"I think when Secretary Granholm announced this target, it was meant to be something like a trip to the Moon, something difficult to achieve," Perlman said, adding that it was therefore not surprising that they had not reached this level for hydrogen produced through water electrolysis, but had come very close.

International outlet Platts noted that the set threshold could already be reached if a proposed bill were adopted, under which operating support for hydrogen produced through water electrolysis would amount to up to USD 3/kg and, in the case of hydrogen produced from natural gas using carbon capture and storage technologies, at least USD 0.6/kg.