News Release

Blue hydrogen: Greening the bottom line

U.S. incentives, 45Q tax credit and project-level economics likely to yield favorable returns

byEnverus

CALGARY, Alberta (Dec. 6, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a new report that explores blue hydrogen production technologies and incentives available in the U.S. and models the resulting project-level economics.

“Although more carbon intensive than green hydrogen production, blue hydrogen projects provide a practical and economical pathway to clean hydrogen adoption,” said Alex Nevokshonoff, senior associate with EIR.

“Projects claiming the 45Q tax creditsare likely to yield favorable returns and even out-compete existing gray hydrogen economics in certain situations. Nevertheless, project economics rely on the success and cost of sequestering CO2 which will vary widely by region, and thus should be a primary concern when choosing project locations,” said Nevokshonoff.

Key takeaways from the report:

  • EIR finds that blue hydrogen provides a pragmatic transition to green hydrogen, offering 2x-3x lower unsubsidized levelized cost of hydrogen (LCOH) but elevated emissions intensities.
  • The 45Q tax credit can be secured for each tonne of CO2 captured and sequestered to unlock syngas-only capture from steam methane reforming plants, the most carbon-intensive yet least capital-intensive scenario.
  • Developers seeking the least-emission-intensive scheme with the strongest returns should explore autothermal reforming plants with carbon capture and storage (CCS).
Graph-showing-project-NPVs-profitability-indexes-with-and-without-IRA-subsidies

You must be an Enverus Intelligence® subscriber to access this report.

EIR’s analysis pulls from a variety of Enverus products, including CCUS Analytics and Enverus Infrastructure.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Learn more at Enverus.com.

Media Contact: Jon Haubert | 303.396.5996

View all Enverus news releases at Enverus.com/newsroom.

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