From s.t.o.c.k.h.e.a.d HC block the linkClean hydrogen’s chance...

From s.t.o.c.k.h.e.a.d HC block the link

Clean hydrogen’s chance to muscle in

While green hydrogen has been in the limelight, there are alternatives – colloquially known as clean hydrogen – seeking to produce emissions-free hydrogen using fossil fuel feedstock.

Leading this charge is Hazer Group (ASX:HZR), which has made great strides towards commercialising its self-named process.

Managing director Glenn Corrie told * that while Hazer was caught up in the down draft from the Fortescue decision, it believed that the pullback was inevitable due to the high cost of producing green hydrogen. This has created an opportunity for the company.

He pointed out that splitting a water molecule into hydrogen and oxygen using renewable electricity is an energy-intensive process due to the strong molecular bond of water.

“To put that into numbers, it currently requires about 55Kwh to produce 1kg of hydrogen. That’s a lot of energy,” Corrie noted.

“By contrast, what we do is we effectively remove carbon from natural gas (methane) to produce hydrogen and graphite and that requires just 8KWh to achieve.

“When you translate that into costs, you can see immediately that green hydrogen is going to be seven times the cost of what we do.”

Given the big disparity in costs, Corrie believes there is an opportunity for an advanced manufacturing process like Hazer to capture a large share of the market.

“The way I see it, it is an opportunity for Hazer because we can provide clean hydrogen today for a fifth to a seventh of the cost and accelerate the pathway to hydrogen much faster and more affordably than what green hydrogen can do,” he added.

Working on commercial scale

Corrie also pointed out that the company’s commercial demonstration plant, which represents the fifth successful scale-up of its technology, had passed through 240 hours of continuous operation.

This is an achievement that proves, de-risks and demonstrates that HZR technology works continuously on a commercial scale.

“It kicks off a number of really important critical success factors for our technology, so we are really excited about it,” Corrie said, adding that it is also the final stage before Hazer moves towards overall commercialisation.

“It is 15 years of development, $100m of capital deployed to develop the technology to where it is today and to prove it and de-risk it at this level is transformational for our company.”

Proving just how mature the technology is, HZR has already secured four commercial customers that will license the technology, with South Korean steel maker Posco being a notable example.

“We have had so much demand for the tech and with the CDP and demonstration plant going to plan, the interest in the technology has accelerated,” Corrie added.

“What a lot of people don’t appreciate is that all of the hydrogen produced today in the world is derived from natural gas. Our process uses the same feedstock but instead of producing carbon dioxide, we produce graphite instead, so we have a built in carbon capture and storage technology.

“We have some more milestones coming out of the demonstration plant, which again shows the progress of our technology and preparing it for commercial readiness by the end of this year.

“Concurrently, we have four commercial projects that are under early-stage licence arrangements.”

Corrie said all four are being progressed.

“The first cab off the rank is our project in Canada, which we’ll be taking to FID next year,” Corrie said.

“There are a lot of milestones between now and then in terms of the final licence terms this year, and early revenue from our engineering services agreement coming in just around the corner.

“Corporately, we are in a pretty strong position. We are well funded today, we have a R&D rebate, further ARENA grant funding on the way and other applications for grant funding, so there’s more non-dilutive funding coming through at that level as well.”