Comprehensive Analysis of International Hydrogen Trade to Materialize Sustainable Pathways

Abstract

Hydrogen is one of the feasible alternative energy sources to mitigate global boiling in the future as conventional fossil-based carbon energy sources emit significant amounts of greenhouse gases causing serious climate change. In current, hydrogen needs to be distinguished into different colors including gray, blue, green, and pink according to the production methods. If hydrogen is produced by a conventional and common method called steam reforming of natural gas, the produced hydrogen is named gray hydrogen, while the post- capture of carbon dioxide is processed after the reforming, the produced hydrogen is named blue hydrogen. Last, if it is produced by a cleaner and new method called electrolysis of water using renewable energy-based electricity, the produced hydrogen can be named green hydrogen, which is considered to as an ultimate clean hydrogen pathway. That is, hydrogen cannot become a clean energy source if it is produced by the conventional method without carbon capture given the significant amount of emissions from the pathways. Thus, the proceeding projects associated with hydrogen energy consider blue and green hydrogen pathways developing carbon capture technologies and renewable energy farms together, and most of them consider green hydrogen pathways. However, due to the global regional deviation of renewable energy sources such as solar and wind energy, the deviation of green hydrogen production capacity is inevitable as well making international green hydrogen trade necessary. To materialize the sustainable pathways of international hydrogen trade, numerous studies have been conducted and projects have been announced so far. Especially, most of the projects consider several representatives of major importers including the Republic of Korea, Japan, and Germany, and exporters such as Australia, Chile, Arab Emirates, to name a few. Therefore, to materialize the international hydrogen trade by analyzing the status and verifying feasibility, fundamental analyses of both economic and environmental impact are conducted on the overall pathway of international green hydrogen trade including several processes such as renewable energy generation, water electrolysis, conversion, reconversion, storage, and transportation. From the economic analysis, the general trends of cost according to some influential factors are indicated for the major processes including renewable energy generation and water electrolysis at first. Then, with the estimation of each process of the overall pathway, a case study is conducted showing that the considerable processes of the total expenditure include renewable energy generation, ammonia cracking, and hydrogen storage. In addition, based on the results of the case study, an optimistic case is also analyzed for comparison study with the original case which can present some practical guidelines for considering the pathway. Similarly, the results from environmental analysis present the greenhouse gas emissions of each process of the pathway showing the breakdown of the emission by separating the emissions according to the kinds of gases, scopes, and used materials, respectively. Then, a case study is conducted with comparison analysis as well, showing that the hot spots of the total greenhouse gas emissions include renewable energy- based electricity, natural gas for ammonia cracking, nitrogen gas for ammonia synthesis, and silicon for manufacturing solar panels and wind turbines. Based on the fundamental analyses of economic and environmental impact, multi-criteria decision analysis using the analytic hierarchy process method is conducted to indicate the priorities of several objects, which are differentiated by the use of renewable energies and types of electrolyzer cells, for the case study. The results from the analytic hierarchy process present that the priorities of objects with 100% wind-based electrolysis are higher than others when the environmental aspect has a high importance, while the objects with 100% solar-based electrolysis are higher when the economic aspect has a high importance in decision-making. Lastly, with the fundamental analyses, supply chain optimization using the mixed-integer linear programming in Python programming language is conducted to indicate the optimal supply chain network for the major importers and exporters in aspects of both economic and environmental impact, considering several region specifiable values such as location factor, distance, renewable energy capacity, electricity price. From the optimization study, it is verified that the Republic of Korea can meet its overseas H2 demand by importing green H2 from the Arab Emirates, while Japan and Germany can meet their demand with the green H2 imported from South Africa in 2030. However, Australia finally becomes the most feasible exporter for both Korea and Japan in 2050 and Spain becomes the exporter for Germany in 2040 due to the advantage in the aspect of distance or sufficient decrease of renewable electricity price. With the optimal supply chain network, the trends of total costs, which include unit H2 cost and carbon tax from estimated emissions, are presented in this study. The total costs generally increase as the year progresses due to the increase in unit carbon tax per ton of carbon dioxide, while the unit H2 costs gradually decrease. In addition, the national target costs of the United States, the Republic of Korea, and Japan are compared, indicating the unit H2 costs can approximately satisfy the target costs, while the total costs with carbon taxes are not yet feasible to satisfy the targets.