Assessment of Hydrogen Delivery Options

Context or liquefaction of hydrogen or its conversion to a chemical

The recently launched European Hydrogen Strategy [1] carrier. ‘Unpacking’ means reversing that process in order to
recognises the important role that the transport of hydrogen have purified, gaseous hydrogen at a defined pressure and
© European Union, 2021 – JRC124206

will play in enabling the penetration of renewable hydrogen in purity at the use site.
Europe. Several Member States have published national
hydrogen strategies [2], with some of them looking at the The packaging modes included in this study are: compressed
importation of hydrogen. For example, a bilateral agreement hydrogen, liquefied hydrogen and chemical hydrogen carriers
was signed recently to investigate the scope for Germany to (ammonia (NH3) and liquid organic hydrogen carriers (LOHC)).
import hydrogen produced from solar power in Australia. The Methanol is not considered here because CO 2 is emitted when
development of an infrastructure connecting areas rich in it is used. Offsetting these emissions through direct air capture
renewable energy with areas with high demand for hydrogen of the carbon atoms used to make the methanol increases
will need significant investment and should therefore be costs considerably compared to all the other options
planned in a sound manner. As there are multiple options considered here.
available, it is necessary to investigate their advantages and
disadvantages, in order to guide infrastructure development Packing takes place in compression or liquefaction plants, or in
along the most effective path. chemical reactors for LOHC hydrogenation and ammonia
synthesis. The main options included in this study for
To implement the European Hydrogen Strategy it is important transporting hydrogen to a demand location are ships and (in
to understand whether it is cost effective to produce renewable the case of compressed hydrogen) pipelines. Trains and trucks
hydrogen where renewable electricity is cheap and then to are also considered when assessing hydrogen delivery cases
transport the hydrogen to the customer, or it is better to where a distributed network of hydrogen demand locations is
produce the renewable hydrogen close to the demand location. present. .
If transporting hydrogen makes sense, a second open question
is how long the transport route should be for the cost of the Following transport, unpacking is used to extract and/or
hydrogen to still be competitive with locally produced process hydrogen, delivering it in a form that meets the purity
hydrogen. JRC has performed a comprehensive study regarding and pressure requirements of its final use. Unpacking will
the transport of hydrogen. This policy brief summarises the key require equipment such as compressors, pumps and/or
findings. evaporators, dehydrogenation reactors (for LOHC) or ammonia
cracking plants. Additionally, purification systems may be
necessary in this step.
Introduction
To achieve the objectives of the EU Hydrogen Strategy, access
to sufficient amounts of renewable hydrogen at low cost will Scope and methodology
be essential in the coming years. The cost of hydrogen is To investigate which renewable hydrogen delivery pathways
determined by its production costs and its delivery costs. This are favourable in terms of energy demand and costs, JRC has
study assesses the delivery cost of large amounts of developed a database and an analytical tool to assess each
renewable hydrogen over long distances. step of the pathways, and used it to assess two case studies.

The cost of producing renewable hydrogen in a specific location Case A is based on the delivery of 1 million tons of renewable
is influenced by the type of renewable energy sources available hydrogen per year to a single industrial customer, via a simple
and their associated capacity factor. The cost of hydrogen transport pathway, through a dedicated pipeline or shipping
delivery depends on the amount of hydrogen transported, the route. The transport distance considered in case A is 2,500 km.
transport distance, the transport means used and the state in
which hydrogen is transported (the ‘packaging’ mode). In this Case B intends to model a more complex delivery route.
brief, ‘packaging’ is used when referring to the form in which 100,000 tons of renewable hydrogen per year are delivered to
hydrogen is being delivered. ‘Packing’ refers to the compression a network of 270 hydrogen refuelling stations (HRS), each with
 a dispensing capacity of 1tH2/day. The first leg of the transport EUR 50/MWh; (2) High price (Hi), with a production site
route is similar to case A (2,500 km), then hydrogen is further electricity cost of EUR 50/MWh and a consumption site
distributed (within a radius of 500 km) through a combination electricity cost of EUR 130/MWh. For case A (industrial use of
of railway and road transport. In this case, the hydrogen hydrogen), waste heat at 300°C is also assumed to be
© European Union, 2021 – JRC124206

delivered at the refuelling station should comply with the available, at a cost of EUR 20/MWh.
hydrogen purity and pressure levels required for mobility
applications. (These are higher than for industrial uses.) For Although the focus of the study is on the cost of delivery of
Case B, the scenario where hydrogen is distributed only by hydrogen, a hydrogen production cost also has to be estimated
pipelines is not included in the analysis presented here. It to account for the costs related to the use of hydrogen as fuel
requires a more complex analysis, which is part of ongoing for providing heat and to hydrogen losses along the delivery
work. chain (fuel for ammonia cracking, for example, or boil-off of
liquefied hydrogen). A production cost of hydrogen by
There is a significant level of technical uncertainty in the electrolysis is derived from the electricity price scenarios
assessment presented here, for two main reasons. Firstly, there described above, based on several further assumptions
are, to date, few working examples of some of the processes regarding electrolyser capital cost and operational hours. For
examined, so data are scarce. Secondly, the scale of these Lo the estimated hydrogen cost is EUR 1.5/kg H2, while in Hi it
prototypes is small. Nevertheless, this study allows for a semi- is EUR 3.5/kg H2. With these values, it can be estimated that,
quantitative ranking of costs for hydrogen transport options within the range of electricity prices at the production site of
within the technological field defined by the chosen set of EUR 10-EUR 50/MWh, an increase of EUR 10 per MWh would
assumptions. add EUR 0.5 per kg H2 to the hydrogen production costs.
The energy demand for the packing and unpacking of hydrogen In this study, the blending of hydrogen with natural gas is not
is generally assumed to be met by electricity. However, there considered a suitable means for the bulk delivery of hydrogen.
are some exceptions, such as for the ammonia cracking It is surmised that it could not be ensured that the hydrogen
process, where the energy demand is assumed to be met using supplied by the hydrogen producer would reach the hydrogen
a mix of ammonia and hydrogen as fuel, or LOHC consumer over long distances in the required quantities and at
dehydrogenation, where the energy for this process could also comparable cost with other transport options.
be supplied by hydrogen or by a source of waste heat (the
latter examined only in Case A). It is assumed that compressed hydrogen is stored in salt
caverns near the points of production and consumption. It
The size and type of the required transport fleet depends on should be pointed out that local geology might not permit this.
the packaging mode. These means of transport are at different
stages of technological readiness. For example, LOHC can be
transported in conventional oil tankers, and ammonia can be Results
transported in refrigerated chemical tankers. By contrast, The hydrogen delivery costs calculated for case A (See Figure
liquefied hydrogen will need to be transported in large carriers 1) suggest that transport options based on compressed gas (by
with a similar design to liquefied natural gas (LNG) carriers, ship or by pipeline) are the most competitive solution,
and compressed hydrogen will be delivered in tanker ships alongside LOHC by ship if waste heat is available at the
analogous to those transporting compressed natural gas consumption site at the assumed price. Liquefied hydrogen
(CNG). transported by ship would not be much more expensive.

Pipelines are assumed to be newly built, and to connect the Figure 1 shows that the hydrogen delivery costs of chemical
hydrogen production site directly to the consumption location. carriers are more dependent on energy prices than are those
of other packaging modes.
It is assumed that hydrogen production, packing and shipment
sites will be located close to renewable electricity generation, In terms of electricity price differences, from the results shown
benefiting from relatively low electricity prices equivalent to in Figure 1 it can be estimated that, for distances of 2,500 km
the generation cost. By contrast, the price of electricity used between hydrogen production and hydrogen demand locations
during transport (e.g. pipeline compressors) and for unpacking (compatible with a potential internal EU hydrogen market),
is assumed to be higher, i.e. the local retail price for large imports of hydrogen can economically be competitive if the
European industrial consumers. To assess what difference renewable electricity generation cost differences are above
electricity costs make, two scenarios are explored: (1) Low EUR 20/MWh, considering the boundary conditions for this
price (Lo), with a production site electricity cost of scenario (Case A, low electricity price).
EUR 10/MWh and a consumption site electricity cost of
 Figure 1 also shows how the total costs of the different better performance. However, boil-off losses of liquefied
hydrogen delivery options for case A are split between packing hydrogen increase with distance, reducing the competitiveness
costs, unpacking costs, and costs related to storage plus the of this pathway. Above about 16,000 km, chemical carriers
use of a transport fleet. (both LOHC and ammonia) could be the preferred option for
hydrogen delivery.

A more distributed delivery scenario involving smaller

quantities of hydrogen (case B) leads to different conclusions.
© European Union, 2021 – JRC124206

Transport and storage costs increase significantly in this

scenario, in particular penalising the packaging solutions with
lower gravimetric density (i.e. compressed hydrogen). Liquefied
hydrogen therefore appears as the cheapest option for the
scenario considered here (Case B, see Figure 3), also because
achieving the purity level required by HRS is more demanding
for chemical carriers.

Figure 1 Hydrogen delivery costs for case A. Hi and Lo electricity prices for each
carrier. Except for pipelines, all the transport options consist entirely of shipping.

In the case of hydrogen delivered by pipeline, costs are mostly

related to infrastructure (pipelines and compressors)
suggesting that repurposing existing natural gas pipelines for
hydrogen transport would significantly decrease the associated
delivery cost, making this option even more competitive. The
natural gas industry estimates that cost savings could be more
than 50% compared to a newly built pipeline [3].

For LOHC and ammonia, packing and unpacking costs Figure 3 Hydrogen delivery costs for case B. Hi and Lo electricity prices for each
dominate, while transport costs represent a small fraction of carrier. Transport options involve a combination of shipping, train and truck.
the total. This indicates that they could be cost competitive for
distances longer than the 2,500 km considered in case A. This While comparing hydrogen costs between case A and case B
is confirmed by Figure 2, where the influence of transport (Figure 1 vs Figure 3) it should be noted that a smaller amount
distance between a single production and delivery point on the of hydrogen is distributed in the latter case. Economies of scale
hydrogen delivery price is shown. For this analysis, 1 Mt of also influence the final cost of hydrogen, particularly the cost
hydrogen per year and the low electricity cost scenario have shares related to the packing and unpacking processes.
been considered. Three different regions can be identified, with
the most cost effective transport pathway changing depending Conclusions
on the distance. There is no single optimal hydrogen delivery solution across
every transport scenario. The most cost effective way to deliver
renewable hydrogen depends on distance, amount, final use,
and whether there is infrastructure already available.

For distances compatible with the European territory,

compressed and liquefied hydrogen solutions, and especially
compressed hydrogen pipelines, offer lower costs than
chemical carriers do. The repurposing of existing natural gas
pipelines for hydrogen use is expected to significantly lower the
delivery cost, making the pipeline option even more
competitive in the future. By contrast, chemical carriers
become more competitive the longer the delivery distance (due
to their lower transport costs) and open up import options from
suppliers located, for example, in Chile or Australia.
Figure 2 Hydrogen delivery costs for a simple (point to point) transport route, for
1 Mt H2 and low electricity cost scenario. Unpacking chemical carriers accounts for a significant share of
their total cost, mostly due to the processes’ high energy
For short distances (up to 3,000 km), compressed hydrogen demand and the fact that unpacking plants are likely to be
gas appears to be the cheapest option, particularly in the case placed in locations with a relatively high electricity price.
of pipelines. For longer distances, liquefied hydrogen and LOHC Optimization of unpacking processes has a key role to play in
(even without cheap waste heat) are the options with the increasing the competitiveness of the chemical carrier
lowest costs. Of the two, liquefied hydrogen shows a slightly pathways.
  Significant improvements over the current state of
Policy considerations the art and upscaling of several orders of magnitude
Set against renewable hydrogen production costs of are necessary for the technologies involved in the
EUR 1.5- 3.5 /kgH2, the contribution of hydrogen delivery costs hydrogen delivery chain. Major investments should
be mobilised in the short term for the technologies
© European Union, 2021 – JRC124206

to the final hydrogen price is not negligible. Nevertheless,

delivery costs may be low enough to facilitate the considered necessary to reach the performance and
competitiveness of imports of renewable hydrogen from scale required to reach the objectives of the EU
cheaper production locations, particularly for a single point-to- Hydrogen Strategy. Investigating the technical limits
point delivery route. As outlined in Figure 3, for a network of and optimisation margins and reducing energy
distributed hydrogen consumers, the cost of hydrogen delivery demand, in particular for the upscaling of packaging
may represent the highest share of the total hydrogen cost at technologies to the required sizes, is necessary.
the demand site. For this use case, even with limited renewable
energy resources and consequently higher renewable  In addition, the possibility of flexible operation of
electricity prices, on-site hydrogen production may be more conversion/packaging plants in order to profit from
competitive than imported hydrogen. However, it should be favourable low electricity prices should be
noted that the analysis presented here did not consider the investigated, in order to bring down costs.
delivery of hydrogen by pipelines for this scenario (case B). This
option could become the most suitable option in a highly  Since a major cost component for hydrogen transport
distributed scenario. through pipelines is the construction cost of new
infrastructure, actions aimed at understanding the
One of the main challenges for the delivery of large amounts techno-economic potential for repurposing natural
of renewable hydrogen is the current lack of infrastructure (e.g. gas pipelines should be supported.
liquefaction plants, ammonia cracking or LOHC
dehydrogenation solutions), both in terms of number of  Research on the potential hazards (e.g. toxicity,
facilities and their size. This challenge becomes more relevant flammability) associated with hydrogen packaging
when considering the amounts of renewable hydrogen the EU solutions is needed due to their presence in new
will demand in the coming years, as outlined in the European settings. This research should lead to the
Hydrogen Strategy [1]. development of adequate technological solutions
and the elaboration of safety regulations.
Aggressive and cost-effective implementation of the Strategy
warrants improved understanding of the costs of renewable  Modelling of the cost and availability of renewable
hydrogen. In addition to the delivery aspects covered in this energy in different geographical locations (within and
brief, more studies are needed to accurately compare actual outside Europe) is of paramount importance for
hydrogen production costs in the EU against the costs in places understanding the economic feasibility of hydrogen
with cheaper renewable resources (e.g. Chile, Australia or transport over long distances.
Western Africa). More clarity is also essential regarding the
actual future demand for renewable hydrogen and renewable Future work
hydrogen-derived chemicals in the EU, and how much of that The study is currently focused on hypothetical transport cases
demand could be covered with hydrogen produced in the EU at within and into Europe. Further case studies are to be
a competitive price. The large scale importation of green conducted, also considering longer transport routes. A full
chemicals could have a significant impact on the European report of the findings will be published, with a more detailed
chemical and fertilisers industry. analysis of the results obtained and full references. In a second
step, the environmental impact assessment of hydrogen
An established large-scale hydrogen delivery chain would emit delivery options will also be developed.
much greenhouse gas if fossil fuels were used to fulfil its
energy needs. Therefore the definition, certification and
labelling of renewable hydrogen should not only consider its References
production, but also the full delivery chain. [1] A hydrogen strategy for a climate-neutral Europe,
COM(2020) 301
Recommendations [2] National hydrogen strategies, Hydrogen Europe, December
There are several technological challenges to be overcome to 2020
enable competitive delivery of hydrogen over long distances:
[3] European Hydrogen Backbone, July 2020

Contacts:
[email protected] (valid until 30/06/2021)
[email protected]
[email protected]