Emissions and costs of hydrogen products derived from natural gas: The new Low-Carbon Business Opportunity Analyser
© AdobeStock/Kalyakan
The extent to which hydrogen and its derivatives will contribute to climate protection in the future is the subject of wide-ranging political debate. To facilitate a fact-based discussion on the use of natural gas-based (blue) hydrogen, a new tool is now available: the Low-Carbon Business Opportunity Analyser. Commissioned by Agora Industry, Oeko-Consult GmbH has developed this interactive web tool, which assesses the greenhouse gas emissions and production costs of various hydrogen-based products in different countries. Decision-makers in politics and business can use this as a basis to examine the use of natural gas-based hydrogen in a targeted manner.
The new Low-Carbon Business Opportunity Analyser addresses questions such as the following:
- How high are the greenhouse gas emissions from natural gas-based hydrogen?
- How do these emissions differ between different producing countries?
- At what cost will different countries be able to export natural gas-based hydrogen or derivative products such as ammonia, methanol or iron in the future?
- What proportion of total emissions are accounted for by methane emissions from natural gas production?
- Which parts of the value chain (natural gas production, transport, H2 production, etc.) have what impact on total emissions or total costs?
Calculating emissions and costs effectively
The Low-Carbon Business Opportunity Analyser calculates the costs and greenhouse gas emissions of blue hydrogen and downstream products for the target years 2030 and 2040. The results are based on scientific assumptions regarding how the costs and greenhouse gas emissions of the individual components of the process chain will develop.
To ensure that the final products have low greenhouse gas emissions, CO₂ must be captured and stored (Carbon Capture and Storage, CCS) within the process chain. This assumption is applied to all processes.
For all countries covered by the tool, the app contains a standard dataset which serves as the basis for the calculations. Users can manually adjust all relevant variables to take local conditions into account, while at the same time gaining an overall overview through the comprehensive dataset. For example, they can select various factors, such as the mode of transport or the origin of the carbon used, and see how these affect costs and greenhouse gas emissions. They can choose between different hydrogen-based final products: methanol, hydrogen, steel, iron, e-fuels or ammonia. Users can use the tool to calculate production costs, including transport costs from an exporting country to an importing country, and receive a detailed cost breakdown for the hydrogen-based products.
Example of Importing hydrogen into Germany
To demonstrate the tool’s capabilities, the import of hydrogen into Germany is calculated. As the first figure shows, the tool determines that the lowest total emissions in the process chain are to be expected from exporting countries that
- have low (methane) emissions from natural gas production,
- are able to transport hydrogen via the pipeline (due to the short distance) and
- do not generate any additional emissions from shipping.
Comparison of total emissions and emissions by processing step for each source country
© Low-Carbon Business Opportunity Analyser
The lowest costs for the entire process chain are expected in exporting countries that have
- low natural gas production costs,
- low transport costs and
- low costs for the transport and storage of captured CO₂.
Comparison of total costs and cost components by source country
© Low-Carbon Business Opportunity Analyser
Calculating the costs of hydrogen from renewable energy
Using another tool developed by Oeko-Institut in 2023 for Agora Energiewende and Agora Industry, supplier countries for Power-to-X (PtX) can assess their various products and compare them with those of other countries. PtX refers to hydrogen produced using electricity from renewable energy sources and other energy carriers produced from it, such as ammonia, synthetic methane, synthetic methanol and synthetic fuels. The interactive tool, the PtX Business Opportunity Analyser, was developed into an app in 2024.
Christoph Heinemann is an expert on the production and use of hydrogen as a climate policy tool. Dr Roman Mendelevitch is an expert on international energy commodity markets. They both work as senior researchers in the Energy & Climate division.
Further information
Low-Carbon Business Opportunity Analyser
