Argus brings transparency to emerging hydrogen markets
London, 17 February 2022
Global energy and commodity price reporting agency Argus has launched a suite of 155 hydrogen cost indexes that illuminate the costs of producing the gas by different means, and which provide a framework for understanding the carbon intensity of production.
Hydrogen has become a central part of plans by many large economies to fully decarbonise by 2050. Energy-rich and carbon-free at point of use, it can be used in combustion, or to generate electrical power using fuel cells. Hydrogen can also be converted into ammonia (hydrogen plus nitrogen) or methanol (hydrogen plus carbon dioxide), both of which are seen as promising transportation fuels of the future.
The industry has moved beyond proof-of-concept and pilot plants, and the coming decade will be about scaling up hydrogen production. Australia’s hydrogen investments in 2021, for example, accounted for more than all other planned energy and minerals projects combined.
But while hydrogen projects are coming to market now, production is weighted towards the latter half of this decade. As a result, accurately pricing hydrogen represents a major challenge for developers, offtakers and infrastructure companies, which are making large capital investments years before any return. Globally, the hydrogen market size among utilities alone is forecast to be worth as much as $10 trillion by 2050.
A further challenge to the emerging hydrogen eco-system is classification: while hydrogen itself is a clean fuel, its method of production may not be. The gas can be produced using multiple processes, each with different greenhouse gas intensity, from zero-carbon renewable electrolysis to coal gasification at the opposite end of the scale.
With the launch of its new suite of indexes, Argus now publishes modelled hydrogen costs for all key global points including the US west coast, Germany, Abu Dhabi, Japan and Australia, and provides a classification system based on the emissions involved in the production of hydrogen.
The costs, published every week as part of the Argus Hydrogen and Future Fuels service launched in 2021, include autothermal reforming (ATR) production as a process route. ATR offers a higher theoretical rate of carbon capture compared with steam methane reformation.
Argus Media chairman and chief executive Adrian Binks said: “The world is moving to a low-carbon, and ultimately zero-carbon future. This intelligence service breaks new ground by raising the transparency both of price formation and associated carbon intensity, both of which are key to market efficiency during this fundamental shift in the global economy.”
- White paper: Hydrogen, awash in colours, in search of definition
- Podcasts: Hydrogen and Future Fuels Insights: Electrolysers, Hydrogen and potential role in steel production decarbonisation
- Blog post: Hydrogen's role in power generation
- More information about Argus’ hydrogen services
About Argus Media
Argus is an independent media organisation with more than 1,100 staff. It is headquartered in London and has 26 offices in the world’s principal commodity trading and production centres. Argus produces price assessments and analysis of international energy and other commodity markets and offers bespoke consulting services and industry-leading conferences.
Companies in 140 countries around the world use Argus data to index physical trade and as benchmarks in financial derivative markets as well as for analysis and planning purposes.
Argus was founded in 1970 and is a privately held UK-registered company. It is owned by employee shareholders, global growth equity firm General Atlantic and Hg, the specialist software and technology services investor.
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