Low-carbon hydrogen production in North America is expected to nearly triple by 2030, reaching 1.4 million tonnes per annum (mtpa).

That’s according to a GlobalData report released today (September 1), titled North American Hydrogen Market – Overview, Demand, Policies, Deals and Key Players, that projects that at least 85% of the produced low-carbon hydrogen to be blue hydrogen. 

“Blue hydrogen production in North America is some of the cheapest in the world due to low natural gas prices and an abundance of suitable sites for geological carbon storage,” said Miles Weinstein, Energy Transition Analyst at GlobalData. 

“Still, the cost of blue hydrogen production is in the US is $1.52/kg, compared to $1/kg for grey hydrogen. While Canadian costs are comparable, Canada leads the US in blue hydrogen due mainly to existing natural gas extraction and carbon sequestration infrastructure, as well as funding for low carbon vehicles and fuels.

“In most other global regions, however, the capacity of green hydrogen plants far outpaces that of blue due to higher natural gas prices or, in some cases, cheap renewable electricity.”

“While blue hydrogen is more expensive to produce than grey, US tax credits for carbon capture and storage effectively reduce the cost of blue hydrogen to $1.26/kg, reaching $1.11/kg by 2026. A similar tax credit is currently under consideration in Canada.”

A recent surge in the number of hydrogen deals in North America highlights the growing popularity. 2021 already boasts a record-breaking year in terms of the total reported deal value.

Weinstein continued, “Since partnerships are often a signal of upcoming projects, it’s possible that North America could see an uptick in green hydrogen production. Other common partnership sectors in North America are transportation, blue hydrogen, green fuels, fuel cells, and maritime shipping.

“In the case of green hydrogen, a concerted R&D effort will be necessary to reduce CAPEX. Finally, the ongoing build-up of a hydrogen value chain lends confidence that the necessary infrastructure will be in place to meet growing demand.”