© bp
© bp

Blue will be bp’s hydrogen focus this decade – energy major posts $13.8bn 2023 profits

bp has said blue hydrogen will be its focus during this decade with green hydrogen production expected closer to 2030, as the oil and gas major posted $13.8bn profits in 2023 – down from $27.7bn the year previous.

With a total adjusted EBITDA for gas and low-carbon energy totalling $14.46bn in 2023 – down from $21.07bn in 2022, and $3.4bn in Q4 2023 – down from $4.5bn year-on-year – the results echo similar trends from other energy giants.

The company said its hydrogen pipeline grew to 2.9 mtpa, up from 1.8 mtpa in 2022. Last February (2023), bp said it would invest up to $8bn more into low-carbon energy, including hydrogen and renewables, by 2030.

Read more: bp targets double-digit return from hydrogen after announcing record profits

However, bp’s new CEO, Murray Auchincloss, revealed the company’s hydrogen focus would be on blue through to 2030, “laying the foundations” for green hydrogen production towards the end of the decade.

“As we look ahead, our destination remains unchanged – from International Oil Company (IOC) to Integrated Energy Company (IEC) – focused on growing the value of bp. We are confident in our strategy, on delivering as a simpler, more focused and higher-value company,” Auchincloss said.

“With hydrogen, our focus this decade is on blue hydrogen and decarbonisation of our refineries, while laying the foundation for green hydrogen production towards the end of the decade.”

Previously, the company said it aims to produce 0.5-0.7 million tonnes of “primarily green hydrogen” by 2030, while also pursuing selected blue hydrogen opportunities.

Despite having multiple green hydrogen schemes across the Netherlands, UK, Australia and Germany, bp has recently announced more developments from its 1.2GW flagship blue hydrogen project in the UK.

In October (2023), it named Johnson Matthey as its blue hydrogen technology provider for the project in Teesside.

Read more: Johnson Matthey blue hydrogen tech selected for bp’s 1.2GW UK project

Hydrogen is a crucial element in refining processes, enhancing the quality of petroleum products and enabling the processing of various types of crude oils.

Traditionally, grey hydrogen has been used for the processes, but various oil and gas players have been looking to green and blue to attempt to improve refining’s sustainability.

Last September (2023), TotalEnergies announced it was looking to secure a supply of 500,000 tonnes of green hydrogen per year for its European refineries by 2030.

Read more: TotalEnergies seeks 500,000 tonnes of green hydrogen per year for European refineries

CCS’ role in cleaning up existing hydrogen production

HyCO4 plant, Rotterdam © Air Products

So often in this industry we find ourselves discussing the decarbonisation potential of hydrogen and how it could repower polluting industry, transport and more

But almost equally as often, one crucial aspect is avoided – the current production of hydrogen is a huge emitter of carbon dioxide (CO2).

900 million tonnes of CO2 emitted in 2022 could be linked to the unabated fossil fuel-based production of hydrogen1, according to the International Energy Agency (IEA). Over 100 million tonnes more than what aviation sector emitted in the same year2.

The reason being global use of the energy carrier reached 95 million tonnes in 2022 – but just 0.7% (0.66 million tonnes) was met by low-emission hydrogen1. And for some time yet, it does not appear that green hydrogen will be able to move the needle.

In January (2023), the IEA’s Renewables 2023 report downgraded its predicted renewable power capacity dedicated to hydrogen production between 2023 and 2028 to 45GW. While offering a “reality check” on renewable-based hydrogen momentum, the agency said of all the global projects announced to use renewable for hydrogen production this decade, only 7% of the proposed capacity is expected to come online by 20303.

Blue or low-carbon hydrogen has continued to be a complicated and often contentious topic. While green hydrogen purists argue that it extends the life of fossil fuel usage and suggest carbon capture technology is not viable, blue hydrogen supporters say it is an effective pathway to cut a high level of emissions in the short-term…

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