Renewable gases: Production and impact on industry

Renewable gases: Production and impact on industry

In the current scenario, where the transition to a low-carbon economy is a global priority, the production of renewable gases, such as green hydrogen, emerges as a promising solution for the decarbonization of industry. In this article, you will learn about the international and national contexts of renewable gases, their forms of production, and their impact on industry, as well as the main challenges and ongoing industrial projects. 

Opportunities for the decarbonization of industry   

The production of green hydrogen and other renewable gases has several advantages for the decarbonization of industry. 

Firstly, renewable gases can be used as clean fuels in sectors such as electricity, road transport, and industry, allowing the replacement of fossil fuels and the reduction of GHG emissions. 

On the other hand, green hydrogen also allows the storage of surplus energy produced by wind and solar sources, increasing its use in sectors such as energy-intensive industries where direct electrification is neither efficient nor suitable in terms of costs or environmental issues. 

Green hydrogen production  

Green hydrogen production involves the use of renewable energy sources. There are several technologies and methods, the most common being water electrolysis and the steam methane reforming process with carbon capture and storage (CCS).

In water electrolysis, water is separated into hydrogen and oxygen using electricity. The electricity needed usually comes from renewable sources (solar or wind).

The electrolysis process can be carried out with ordinary water, which is electrically split into hydrogen and oxygen. With high-temperature water, after its vaporization, it is electrically split. The latter process is recognized as more efficient and can be combined with cogeneration systems to take advantage of waste heat.

In the carbon capture and storage (CCS) methane steam reforming process, the main component of natural gas, methane, is combined with water vapor to produce hydrogen and carbon dioxide (CO2). The CO2 is captured and stored, avoiding its emission into the atmosphere. Although this technique is called blue hydrogen, because the hydrogen produced is clean, the process is not completely so. This is because it uses fossil fuels, in this case, methane, which emits quantities of CO2.  

Hydrogen Power Plant

Business models for green hydrogen production

The ideal business model may vary depending on the scale and context of the project. Three possibilities are explained below:

  • Centralized production involves the construction of large production facilities, where the green hydrogen will then be distributed to industrial customers and road companies, among other possibilities.
  • Decentralized production: (local) production takes place on a small scale, usually integrated with renewable energy systems such as solar panels or wind turbines. Its commercialization benefits, in this model, from the proximity established with residential buildings and companies, among others.
  • Consortia: the creation of partnerships between companies, organizations, universities, research centers, and governments allows joint investments, the sharing of infrastructure and resources, and the development of new technologies and approaches to boost the production and use of green hydrogen.
Infographic: Green hydrogen production

International and Portuguese context  

Green hydrogen production has gained prominence in the international context of renewable gases, driven by the Paris Agreement and growing concern about climate change.

In Germany, the energy crisis is driving the transition to green hydrogen. With Russian gas exports to Germany set to stop in June 2022, SME Kelheim Fibers, which has been producing fibers for 87 years, has been looking at ways to become one of the first companies to advocate the switch to green hydrogen.

Where is Japan located? Find out on this Asian map!

Japan is the technological leader of the “green revolution”. The first large-scale, floating wind farm in the ocean has been built on the Goto Islands in the south of the country. Consisting of floating and fixed turbines to generate the energy, the solution now faces the challenge of coping with earthquakes and typhoons.

In 2017, Japan was already the first country to develop a strategy for green liquid hydrogen produced in Australia. It is currently shipped to the country by sea, cooled to -253°C, compressed and turned into a liquid. Kawasaki Heavy Industries, for example, has developed a complete green hydrogen supply chain in Kobe to provide heat and electricity to the urban area.

Portugal also stands out in this scenario, mainly due to its potential for renewable energy production, especially solar and wind. These elements place our country in a favorable position for the production of green hydrogen from these renewable sources.

In 2022, the Japanese company Kawasaki Heavy Industries announced its interest in investing in Portugal, specifically in the Sines complex, to produce natural gas and liquefied hydrogen.

Portugal could therefore have the first hub for the transit of renewable gases in Europe and a port terminal for liquefied hydrogen that also supports liquefied natural gas.

Particularities of Portugal

Although Portugal is dependent on energy from indigenous sources, it has made efforts to reduce the use of imported fossil fuels, for example.

The favorable climate and abundant natural resources allow Portugal to promote decarbonization strategically based on solar and wind energy.

In addition, the production of green hydrogen and other renewable gases from these energy sources has the potential to further expand Portugal’s energy independence and self-sufficiency.

Although the production of green hydrogen and other renewable gases shows significant potential, there are several challenges to be overcome. One of the main ones is the reduction of production costs in order to make the sources competitive with fossil fuels.

This requires new investments in research and development activities for more efficient and commercial-scale technologies.

Ongoing initiatives

Currently, there are some industrial initiatives and projects in the field of green hydrogen and other renewable gas production in Portugal.

One of them is the Neogreen Hydrogen Project in Sines. With an estimated investment of $3 billion, the project’s main objectives are to have, in the first phase (2026), an electrolysis capacity of 60 megawatts (MW), 300 MW of electrolyzers in the second phase, and another 540 MW of electrolyzers in the third phase.

In Vila Velha de Ródo, another industrial project of DH2 Portugal is underway with an estimated investment of EUR 161 million. It concerns the construction of an industrial unit for the production of green hydrogen using water electrolysis technology, complemented by two photovoltaic solar parks to produce the necessary electricity.

Concluding remarks

The production of green hydrogen and other renewable gases, which is directly linked to the renewable energy context, plays a crucial role in the transition of countries to a low-carbon economy and the decarbonization of industry. Especially in energy-intensive sectors. Examples are ceramics, steel foundry, chemicals, mineral wool, among others.

This article shows the great potential of Portugal to excel in the field of green hydrogen production and renewable gases, in favor of a significant reduction of GHG emissions and a decrease in energy dependence on external sources.

Considering the importance of continuous investment in research & development to overcome the challenges associated with the production of renewable hydrogen and other renewable gases, such as cost reduction and the development of more efficient technologies, we highlight that the “Support for the production of renewable hydrogen and other renewable gases” is open until 31/07/2023.

If you want to accelerate the carbon neutrality of your company through the production of green hydrogen or other gases of renewable origin, this incentive can support between 85 and 100% of the eligible cost associated with the development of your project. Find out all the details here.

Together, we can drive the energy transition and build a cleaner and more sustainable world for future generations.