Costs and environmental impacts of hydrogen imports

Hydrogen’s contribution to climate change mitigation

In future, hydrogen looks set to replace fossil fuels in domains where green electricity cannot be used. Germany will have to import hydrogen to meet this demand. A research consortium from the three institutes Prognos, Oeko-Institut and IREES analysed the anticipated costs of importing hydrogen and identified potential environmental impacts. The study was commissioned by the German Federal Ministry for Economic Affairs and Climate Action (BMWK).

Short transportation distances are most cost-effective – for long distances there is no panacea

The project team first defined nine transportation routes capable of working without emitting fossil greenhouse gases (GHG). The routes were required to be industrially scalable and reflect the full spectrum of technologies and the distinctive characteristics of each. The study came up with the following findings:

  • For shorter transportation distances of up to 3,000 or 4,000 kilometres, transportation via pipelines is most cost-effective.
  • For longer distances, importation in the form of ammonia is most cost-effective. However, attention must be given to possible negative environmental impacts, such as high toxicity for humans, flora and fauna and potential GHG emissions in the event of leakages.
  • Another advantage of ammonia imports is that industrial-scale facilities and infrastructures are already in place. It may also be possible to continue using existing liquefied gas import infrastructures to some extent. In addition, some direct use cases exist in which imports are cost-effective. Maximum utilisation will require the development and industrial scaling of ammonia crackers, however.
  • Carbon-based energy sources such as methane and methanol are dependent on carbon from a sustainably climate-neutral source such as carbon recovery via direct air capture (DAC). Although the scaling of this and the all-important economies of scale are still matters of great uncertainty, DAC is highly likely to be necessary to achieve negative emissions.
  • CO2 recirculation appears to lack merit due to its low overall energy efficiency.
  • Liquid-organic hydrogen carriers (LOHC) are only seen as suitable for niche applications due to the costs of the necessary carrier material and the poor ratio of transported energy to transported weight.
  • Apart from methane and the combustion of shipping fuel along the route, hydrogen and ammonia releases also have a crucial effect on the overall greenhouse gas balance depending on the route. Hydrogen is an indirect greenhouse gas and research into its exact climate impact is still under way. Ammonia left in the environment can be transformed into nitrous oxide, a very potent greenhouse gas.
  •  In terms of the environmental impacts on the different routes, there are major differences between the expected greenhouse gas emissions in the scaling phase and the emissions to be anticipated once systems have been optimised for the industrial scale.

Background on the research design

Based on data from the literature, the scientists analysed and quantified the specific cost components of the individual transportation routes. Investment in the necessary infrastructures was taken into account, as were the energy costs of transportation and of converting the hydrogen into the respective carrier media. Energy losses are as much a part of this equation as the question of whether existing infrastructure and facilities can be re-used.

Using up-to-date comparative literature, for each transportation route and carrier medium the research team set out the environmental risks to humans and the natural environment and identified possible negative climate impacts.

Study: Systemic comparison of different hydrogen transportation routes (“Systemischer Vergleich verschiedener Wasserstofftransportrouten”) by Oeko-Institut, Prognos AG (project leader) and IREES GmbH (in German)

Study: Systemic comparison of different hydrogen transportation routes (“Systemischer Vergleich verschiedener Wasserstofftransportrouten”) by Oeko-Institut, Prognos AG (project leader) and IREES GmbH (in German)