Oxford – Carbon management and hydrogen

The May 2021 edition of the Oxford Energy Forum discussed the increasing role of electricity and hydrogen in the decarbonized energy system. It was projected that the share of electricity in final consumption would rise from 20% to 50% by 2050. Recent advancements in battery technology and electric vehicles have strengthened the role of electricity even further. However, the projected role of hydrogen has slightly decreased to 8% of final consumption by 2050. Despite uncertainties, it is clear that there will be sectors that cannot be electrified and will require other decarbonization solutions. Hydrogen remains a key technology for these hard-to-abate sectors, alongside carbon management activities such as carbon capture and storage (CCS). The Oxford Institute for Energy Studies has established research programs on carbon management and hydrogen in 2022. These programs aim to explore how carbon management and hydrogen can contribute to the decarbonization of the energy system. The first article in the forum provides an overview of strategies to reduce emissions from heavy industries and sectors such as cement, iron and steel, and shipping and aviation. These strategies include reducing dependency on carbon-intensive sectors, replacing fossil fuels with cleaner alternatives like hydrogen, and adopting low-carbon technologies like CCS. The article highlights that CCS still lags behind in development due to financial incentives. However, there are positive signs of government support for CCS, such as subsidies and carbon pricing. Another article focuses on the changes under the newly enacted Inflation Reduction Act (IRA) in the US, which supports carbon capture, utilization, and storage (CCUS) and hydrogen production projects. The IRA enhances tax credits for CCUS and introduces a new tax credit for clean and low-intensity hydrogen production. Despite the potential of the IRA to boost these technologies, factors like the cost of renewable energy production and the advantages of blue hydrogen from fossil fuel production may impact the momentum of green hydrogen development. The forum also explores the potential of carbon capture for enhanced oil recovery (CCS-EOR) in reducing emissions. The authors highlight the need to determine the impact of EOR on overall emissions, considering factors such as CO2 storage and increased emissions from additional oil production. The analysis shows that CCS-EOR can still contribute to emission reductions, even after accounting for the full decarbonization of the additional EOR oil produced. The role of carbon dioxide removal (CDR) technologies, particularly engineered methods like direct air capture (DAC), is discussed in another article. These technologies play a crucial role in actively removing CO2 from the atmosphere to meet net-zero targets. The author emphasizes the importance of scaling up engineered CDR deployment and the need for cost reductions to achieve this. It is also necessary to establish robust monitoring and verification processes and create a market for carbon credits to unlock finance for CDR projects. Overall, the forum highlights the importance of hydrogen and carbon management in the energy transition towards decarbonization. It discusses strategies for reducing emissions in hard-to-abate sectors, the regulatory and commercial barriers limiting CCS deployment, the potential of carbon markets, and the role of CDR technologies in addressing climate change.