Earlier this year, the European hydrogen sector was finally given some clarity regarding the status of regulations that will underpin green hydrogen’s desired breakneck growth. The European Commission released its views on Delegated Acts article 27 – the rules that will govern the industry going forward.
The new rules affect not only green hydrogen, but the entire industry aiming to manufacture Renewable Fuels of Non-Biological Origin (RFNBOs) that use hydrogen as feedstock. Green hydrogen is heavily impacted by this.
What Is Green Hydrogen?
So, what makes this production process green? Green hydrogen is produced using renewable energy sources, such as wind or solar power. They are used to generate electricity to power the electrolysis process that separates hydrogen from water. With today’s hydrogen electricity coming primarily from fossil fuels – green hydrogen is a much cleaner and more sustainable energy source compared to its predecessor.
Research and development investments in green hydrogen are surging in numerous countries. It has emerged as a promising solution amid increased concerns around climate change and the need to transition to a low-carbon economy.
Potential applications for green hydrogen include transportation, heating and cooling, and industrial processes, among others. Hydrogen fuel and fuel cells offer an alternative to battery-driven electrification in the effort to deliver zero-carbon emission trucks and buses.
One downside to green hydrogen is its pricey cost point. According to EBA (European Biogas Association) estimates issued in 2022, biomethane production costs as little as €55/MWh. Conversely, other renewable gas processes, such as green hydrogen, can cost four times more and require additional scale up. However, if green hydrogen can be made cheaply enough, demand for the alternative to make fuels could heighten severely.
Europe has extremely ambitious targets for green hydrogen. The Commission has high hopes that these rules will encourage domestic production of 10 million tons of green hydrogen, while also allowing for the import of a further 10 million tons of it as well.
Green Hydrogen in the Pulp and Paper Industry
Currently, there is virtually no hydrogen production in pulp and paper mills. Mills that we know consume hydrogen consume very little – less than 2%.
So why are we discussing green hydrogen in relevance to the pulp and paper industry?
A study from 2020, shows that pulp and paper mills can actually be suitable for generating hydrogen from renewable energy. The study stated that pulp and paper sites in British Columbia, a province in Canada, are ideally suited to adopt alternative low carbon fuel technologies combining high energy demand with large electrical infrastructure.
The displacement of natural gas with a low carbon hydrogen fuel for use in a lime kiln and/or as a transportation fuel could help companies achieve greenhouse gas emission reduction targets. Green hydrogen presents pulp and paper mills with the opportunity to further diversify into a value-added, renewable fuel for a sustainable market.
In fact, we are already beginning to see investments and progress made with green hydrogen in the pulp and paper industry. At the beginning of this year, Smurfit Kappa and the HYFLEXPOWER consortium announced that the first stage of its research project on renewable energy – the introduction of an integrated hydrogen gas turbine demonstrator – has been successfully completed at Smurfit Kappa’s Saillat paper mill.
“We are focused on reducing our emissions with the best available technology today,” said Garrett Quinn, Chief Sustainability Officer at Smurfit Kappa. “But equally this announcement demonstrates how we are focused on looking beyond 2030 and trialing new technology, such as hydrogen, today.”
Understanding the Importance of Green Hydrogen and Its Potential Impact
Understanding the value of green hydrogen and where it’s going is becoming increasingly critical. To reiterate what we discussed earlier, green hydrogen plays an extremely vital role in achieving a net-carbon economy. So much so that in the European Green Deal, there is emphasized importance of hydrogen use as a vital part of its pursuit of carbon neutrality and a green energy transition.
However, reducing greenhouse gas emissions isn’t its only advantage. Green hydrogen also promotes energy security. As countries reduce their dependence on fossil fuels, their energy security increases.
Additionally, the increased development of green hydrogen technologies has also boosted economic growth and created new jobs – something that has been necessary during this time of economic turmoil.
Furthermore, it’s becoming imperative for companies to reduce their emissions as more countries have either passed or are in the process of passing legislation that requires a reduction of emissions for businesses to remain operational and profitable. Some examples of this include:
- Germany launched its national ETS for heating and transport fuels in 2021. It is being phased in gradually, with an increasing fixed price per tonne of CO2 from 2021 to 2025. In 2026, auctions with minimum and maximum prices will be introduced. All main fuel types (gasoline, diesel, heating oil, natural and liquid gases) were covered from the outset, while other fuels will gradually be phased in by 2024.
- Last month, Washington state launched its complex carbon-pricing scheme that will allow most of the state’s biggest greenhouse gas emitters the opportunity to sell and buy carbon allowances. This new market is only the second of its kind in the United States. It demonstrates the efforts some US policymakers are putting forth to control climate pollution. If everything goes as planned, the state will be mostly carbon-free by 2050.
With the P&P industry making up one of the top five industrial categories that contribute to the most greenhouse gases emitted, these carbon costs could have a significant impact industry-wide if nothing is done about it.
ResourceWise: Your Guiding Light to Decarbonization
While we believe it will be many years until hydrogen use is prominent in the pulp and paper industry, it’s never too early to begin planning, researching and developing upon the opportunities it presents.
Let ResourceWise be your source for trustworthy data, planning tools and expert industry knowledge as you transition to renewable energy sources. We empower companies to make wise decisions by providing business intelligence and insights that resolve value chain issues while promoting a low-carbon economy and profitable growth.
Producers who understand the potential green hydrogen holds can utilize FisherSolve’s Carbon Module to benchmark how much renewable energy is available in each mill. Based on uniform international standards, our module makes FisherSolve uniquely capable of measuring and benchmarking your carbon footprint against your peers. The tool shows carbon emission of various scopes, all the way from cradle to destination.
Once there is a solid understanding of the options in front of you, you can then use Prima Markets’, a ResourceWise company, latest product, Prima CarbonZero, to provide insights and key data needed to develop, institute and successfully achieve your decarbonization objectives.
You can access Prima’s historical datasets of biodiesel, renewable diesel and sustainable aviation fuel (SAF) plants throughout the value chain – including feedstock optimization and process technology. You can map global pricing across Prima’s best- in-class low carbon fuel and feedstock prices. Best of all, you can better understand the international supply and demand balance in ESG reporting and fuel decarbonizing to implement investment strategies for your carbon transition.
Learn more about ResourceWise’s available tools today. Contact our team to schedule a demo and see all the ways our intelligence can take your company decarbonization across the finish line.