Catf KBR Hydrogen Transport

Techno-economic
Realities of Long-Distance
Hydrogen Transport
A Cost Analysis of Importing Low-Carbon Hydrogen to Europe
Marika Tatsutani, Consultant and Technical Writer

Ghassan Wakim, Production and Export Director, Zero-Carbon Fuels, CATF
Magnolia Tovar, Global Director, Zero-Carbon Fuels, CATF
Alex Carr, Zero-Carbon Fuels Program Manager, CATF
Hagan Han, Zero-Carbon Fuels Associate, CATF
September 2023
Executive Summary
Interest in hydrogen has grown in recent years as energy density. To explore these issues, Clean Air
policymakers consider strategies for achieving the goal Task Force commissioned KBR Inc., a Houston-based
of full, economy-wide decarbonization over the next consulting firm, to model the cost of different pathways
several decades. Because hydrogen can be produced for delivering low-carbon hydrogen from likely
in a low-carbon manner and emits no carbon dioxide producing regions to Europe’s largest seaport,
at the point of use, clean hydrogen is seen as offering the Port of Rotterdam in the Netherlands.1 Specifically,
a potential solution for certain industrial processes the KBR analysis considered pipeline transport of
and energy end-uses that are technically impossible or gaseous hydrogen from Algeria and Norway and
prohibitively expensive to decarbonize through other maritime (ship) transport of either liquid hydrogen,
means, like electrification. According to some recent ammonia, or a liquid organic hydrogen carrier
studies, decarbonization efforts can be expected to (methylcyclohexane) from Norway, the Arabian Gulf
substantially increase global demand for low-carbon region, and North and South America. Estimates of
hydrogen, while also creating new impetus to develop overall cost per kilogram of hydrogen delivered to
the transport networks needed to connect low-cost Rotterdam were developed for each of three total import
producers of clean hydrogen with demand centers volumes (250,000, 1 million, and 10 million tonnes per
elsewhere in the world. year), which were assumed to be reached in 2030, 2040,
and 2050, respectively. By accounting for each element
Large-scale transport of hydrogen over long distances of the value chain in developing these cost estimates,
poses significant cost and technology challenges, the analysis aimed to elucidate the implications of
however—many of which stem from hydrogen’s different choices with respect to hydrogen carrier,
fundamental properties, including its low volumetric mode of transport, and export location.
1
The Port of Rotterdam was chosen because it is a significant economic driver in Europe, a major bunkering hub, and adjacent to numerous
heavy industrial facilities that can potentially use imported hydrogen. In addition, the Rotterdam port operator has announced plans to
develop capacity to handle 20 million tonnes per year of hydrogen imports by 2050. These plans reflect, in part, the European Union’s
adoption of strong decarbonization goals that are widely expected to increase European demand for hydrogen. Of note, operators at several
other European ports, including the ports of Antwerp-Bruges and Wilhelmshaven, are also looking at hydrogen imports as part of their
energy transition plans.
CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 2

Figure ES-1 shows the different export locations included Cost graphs in the main report are shown in $/kg; the
in the analysis, while Figure ES-2 shows results from appendix shows the same graphs converted to $/MWh.
the cost analysis for the three lowest-cost import
pathways at each of the import volumes considered. Two limitations of this study are worth noting. First,
Costs throughout this report are shown in U.S. dollars ($) the analysis does not account for the additional, ‘last
per kilogram (kg) of hydrogen and per megawatt-hour kilometer’ costs of delivering hydrogen to end-users,
(MWh) of hydrogen, where 1 MWh corresponds to the which could be substantial, nor does it attempt to
energy content of approximately 30 kg of hydrogen. predict future hydrogen prices. Hydrogen prices, and
Figure ES-1: Pathways for Importing Low-Carbon Hydrogen to Europe
Figure ES-2: Lowest Levelized Cost of Delivered Hydrogen to the Port of Rotterdam Across Various Supply Chains

therefore costs to end-users, would certainly be higher— are currently building out an extensive LNG importing
likely by a significant margin—than the KBR estimates infrastructure following the disruption to European gas
suggest, but final prices to different users will depend on markets in early 2022.
a host of market and regulatory factors, most of which ■ When transport via ship and transport via pipeline are
are complex and extremely difficult to anticipate.2 both possible options, transporting hydrogen by pipeline
consistently ranks as more cost-effective. Furthermore,
This study also does not include a full lifecycle it provides a simpler solution compared to the expansive
analysis of greenhouse gas or other emissions from maritime transport supply chain. However, it is likely
the production and transport of hydrogen. In reality, that geopolitical considerations, rather than purely
upstream environmental considerations could be techno-economic factors, will dominate decision
significant depending on the feedstocks, energy inputs, making over future pipeline development.
and methods used to generate and transport hydrogen. ■ Owing to economies of scale, costs per kilogram
For purposes of this analysis, we stipulate that future (or MWh) of delivered hydrogen decline with higher
hydrogen imports to Europe must qualify as import volumes for all carriers and export locations.
‘low-carbon’ and incorporate several simplifying ■ Natural gas prices have a large impact on the cost of
assumptions accordingly: specifically, that imported delivered hydrogen in this analysis, because they are
hydrogen is produced in a low-carbon manner from the main driver of operating costs for ‘blue’ hydrogen
natural gas, using zero-carbon energy inputs with carbon production. (The term 'blue’ hydrogen refers to hydrogen
capture and sequestration at the hydrogen generation produced in a low-carbon manner via steam methane
plant;3 that the fuels used by marine vessels to transport reforming with carbon capture; this was the hydrogen
production pathway assumed for purposes of this cost
hydrogen emit little or no carbon at the point of use;5 and
analysis.) In fact, natural gas prices in the hydrogen-
that any process heat needed to release hydrogen from
producing region account for as much as 20%–70% of the
another liquid carrier at Rotterdam is sourced from the cost of delivered hydrogen across the supply chains and
hydrogen itself. As a practical matter, realizing some of import pathways KBR considered.
these assumptions will present additional technical and
■ If hydrogen is transported in the form of a liquid carrier,
policy challenges that, while outside the scope of this
such as ammonia, the processes involved in liberating
study, can be expected to be significant.
pure hydrogen at the point of import can be expected to
consume a significant portion of the energy carried by
Findings from KBR’s cost analysis and the hydrogen. Alternatively, liquefying pure hydrogen for
other CATF work point to several transport incurs significant energy penalties for refrigeration
and compression. These losses can be reduced with scale
high-level conclusions:   and technology improvements but will likely stay significant
■ Importing large quantities of hydrogen over long as they are inherent to the fundamental physics that govern
distances to Europe—whether by ship or pipeline— each step in the supply chain.
will be expensive and relatively energy inefficient. ■ The use of uncracked ammonia rather than pure hydrogen
This is due to several inherent properties of hydrogen, in some applications could be cost-effective because it
particularly its low volumetric energy density. avoids the dehydrogenation step at the end of the value
■ Transporting liquefied natural gas (LNG) to Europe chain. In fact, uncracked ammonia offers the cheapest
and using it to produce hydrogen at the point of import pathway for delivering hydrogen molecules in our
(with low-carbon energy inputs and carbon capture) analysis, beating even pipeline delivery of pure gaseous
will likely be more feasible and cost-effective than hydrogen although the product delivered is different.
importing low-carbon hydrogen from distant suppliers. This is an important finding given expected demand for
This option was not considered in the KBR analysis but ammonia imports for use in fertilizer production or as a
bears further exploration, especially since EU countries bunkering fuel.
2
CATF has explored potential pricing regimes for low-carbon hydrogen in the early stages of a developing market.
See: https://www.catf.us/2022/10/potential-pricing-regimes-global-low-carbon-hydrogen-market/
3
We assume ‘blue hydrogen’ production from natural gas with carbon capture for this analysis because the technologies involved are
more mature and less costly—and can therefore be scaled more rapidly—than ‘green hydrogen’ production from renewably powered
electrolysis. It should be noted, however, that KBR’s cost estimates for the transport and import segments of the value chain apply
regardless of the production method used to make hydrogen in the exporting region.
4
For most of the marine import pathways considered, KBR assumes self-consumption of a portion of the hydrogen cargo by the transport
vessel during shipping. In the case where hydrogen is transported in the form of methylcyclohexane (MCH), KBR assumes that transport
vessels operate on liquefied natural gas (LNG) as the bunkering fuel.

Taken together, the findings from this study underscore ■ Given its substantial cost advantages relative to other
the numerous hurdles to transporting hydrogen by sea, hydrogen carriers, it will be important to (1) identify what
which include, but are not limited to, the inherent energy part of Europe’s expected hydrogen demand could be
requirements (and potential emissions implications) of met by uncracked ammonia and (2) spur development of
related technologies and infrastructure in applications
associated processes. Recognizing these hurdles, CATF
where no more efficient or cost-effective decarbonization
concurs with the overall conclusion reached by a recent
option exists.
European Commission study, which found that most of
the hydrogen needed to meet future European demand ■ The enormity of the decarbonization challenge
will likely be either (1) produced near the point of end-use demands care in designing public policies and directing
public resources to prioritize the most promising and
or (2) imported by pipeline. Findings from this analysis
cost-effective technologies first. Option value is
also inform several high-level Clean Air Task Force
important but so is avoiding expensive investments in
policy recommendations:
infrastructure that is inherently inefficient or unlikely to
be used. The reality is that additional technologies and
■ Plans for hydrogen deployment should be limited to
a deeper paradigm change will be needed to achieve
“no-regrets” sectors that include existing uses of
net zero greenhouse gas emissions in Europe and
hydrogen as a chemical feedstock in addition to future
elsewhere—current policies are not enough. Thoughtful
uses, where no other energy-efficient or cost-effective
assessment of the full range of strategies that could
decarbonization options are available.
be available to reduce greenhouse gas emissions will
■ Hydrogen demand forecasts should be re-examined significantly reduce the risk, both of missing the European
to develop more realistic estimates. At present, Union’s climate and emissions targets and of creating
some prominent policy targets, such as the European stranded assets through the misallocation of public funds.
Commission's goal of supplying the European market
with 20 million tonnes per year of clean hydrogen by
2030, seem to lack a clear basis. Realistic projections,
grounded in thoughtful analysis, are critical to designing
effective and ultimately successful policies.
■ Any hydrogen that is imported into Europe must be
truly low-carbon and climate-beneficial. To ensure these
criteria are met, the European Union urgently needs to
implement a credible and consistent international system
for certifying clean hydrogen. Such a system should be
based on rigorous analysis of lifecycle greenhouse gas
emissions across the entire value chain, including fugitive
upstream methane emissions for hydrogen production
from natural gas and manufacturing and construction
emissions associated with primary energy inputs to the
hydrogen production process. Analysis across the entire
hydrogen value chain and clarity about certification
standards and requirements are crucial to create market
confidence and minimize investment risks.
■ Import pathways that rely on the long-range transport of
liquefied pure hydrogen or on a liquid organic hydrogen
carrier that requires dehydrogenation to liberate pure
hydrogen at the point of import should be avoided as
they do not make sense from an energy, emissions, or
economic standpoint. Capital requirements and levelized
costs for these pathways are far higher (in some cases
close to double) the costs for importing hydrogen in the
form of uncracked ammonia.

Additional Findings from KBR’s Cost Analysis of Potential Pathways for Importing
Low-Carbon (‘Blue’) Hydrogen to the Port of Rotterdam
■ Of the pathways for delivering hydrogen to Rotterdam considered in this analysis, three options
consistently ranked as most cost-effective across all supply chain volumes: gaseous hydrogen by
pipeline from Norway and Algeria and ammonia via maritime shipping from the Arabian Gulf.
Estimated cost per kilogram (or MWh) of delivered hydrogen is lower for these options than for all
other geographies and transport options, including ship transport of liquid organic hydrogen carriers
(such as methylcyclohexane) and liquid hydrogen.
■ For pipeline transport, Norway is the lowest-cost exporter at the smallest supply volume considered
(250,000 tonnes hydrogen per year). At higher pipeline transport volumes, Algeria, because of its lower
natural gas prices, is the lowest cost exporter.
■ Among the maritime transport options considered, ammonia emerges as the lowest-cost carrier,
regardless of export location. The Arabian Gulf is the lowest-cost exporter, largely due to a combination
of low natural gas prices, geographic proximity to Rotterdam, and competitive construction costs.
■ Estimated costs for ammonia imports from locations in North and South America are on the order of
10%–15% higher than estimated costs for ammonia imports from the Arabian Gulf (the modelled cost
differential ranges from $0.20 to $0.40 per kilogram of delivered hydrogen, or $6–$12 per MWh of
delivered hydrogen, depending on overall import volume).
■ Across all supply chain volumes, importing hydrogen in the form of ammonia from the U.S. Gulf Coast
consistently ranked as the fourth most cost-effective option. The U.S. position could improve further as
a result of widening natural gas price differentials between U.S. and European hubs and recently passed
policy incentives in the United States, including a new federal tax credit for clean hydrogen production in
the Inflation Reduction Act of 2022.

Table of Contents
Executive Summary..................................................................................... 2
1 Introduction.................................................................................................. 8
2 Background & Context for Analysis............................................................. 9

2.1 The case for low-carbon hydrogen........................................................................ 9
2.2 Hydrogen basics: current market and emerging challenges................................ 10
3 Potential Carriers & Value Chains for a Global Hydrogen Market............ 12

3.1 The hydrogen generation plant............................................................................ 12
3.2 Liquid hydrogen (LH2).......................................................................................... 13
3.3 Methylcyclohexane (MCH).................................................................................. 13
3.4 Ammonia (NH3).................................................................................................... 14
3.5 Pipeline transport of gaseous hydrogen............................................................... 15
4 Methodology...............................................................................................16
4.1 Scope of analysis and study design...................................................................... 16
4.2 Key assumptions, study limitations, and data sources......................................... 18
5 Results......................................................................................................... 20
5.1 Overall cost of delivered hydrogen..................................................................... 20
5.2 Components of overall cost................................................................................ 24
5.3 Summary of results from the KBR cost analysis.................................................. 26
6 Policy Context.............................................................................................27
7 Policy Recommendations and Areas for Further Research...................... 30
Glossary: Acronyms and Chemical Formulas.............................................. 33
Appendix: Levelized Cost of Hydrogen Graphs in $/MWh......................... 34

SECTION 1
Introduction
There is growing consensus around the world that full Rotterdam in the Netherlands. Rotterdam was selected
decarbonization will require an expanded suite of advanced, as the point of entry for imported hydrogen in this analysis
climate-friendly technologies, including fuels that can be because the port is a significant economic driver in
produced in a low-carbon manner and do not emit carbon Europe, a major bunkering hub, and adjacent to numerous
dioxide at the point of use. Such fuels are needed to address heavy industrial facilities that can potentially use imported
energy needs for certain industrial processes and sectors hydrogen. In addition, the Rotterdam port operator has
that cannot be readily decarbonized through other means, announced plans to develop capacity to handle 20 million
such as electrification. tonnes per year of hydrogen imports by 2050.
Interest in hydrogen as a leading candidate to fill the By developing detailed cost estimates for each element
need for low-carbon fuel has increased in recent years. of the low-carbon value chain, the analysis was designed
For hydrogen to play a significant role, however, to elucidate the implications of different choices with
cost-effective, environmentally beneficial technologies respect to hydrogen carrier, mode of transport, and
for producing, storing, transporting, and utilizing export location. This report summarizes results from
hydrogen will need to be developed and rapidly scaled. KBR’s analysis, highlighting key takeaways for policy
Finding ways to move bulk quantities of hydrogen cost- makers and stakeholders.5
effectively over long distances is a particular challenge
in this context, both as a precondition for the emergence The remainder of this report is organized as follows: Section
of competitive global markets for clean hydrogen and to 2 provides background and context for the analysis. Section
enable high-demand regions such as Europe to access 3 describes potential hydrogen carriers and value chains.
lower-cost suppliers elsewhere in the world. Section 4 reviews the study approach and methodology,
noting important assumptions and data sources. Section 5
To explore these issues, CATF commissioned KBR Inc., presents results. Section 6 provides a brief discussion of the
a Houston-based consulting firm with expertise in current policy context for investments in clean hydrogen.
engineering and technology, to model the cost of different Section 7 concludes by discussing policy recommendations
pathways for delivering low-carbon hydrogen from likely and areas for further research.
producing regions to Europe— specifically, to the Port of
5
The full KBR report and analysis can be accessed here.

SECTION 2
Background & Context

for the Analysis
2.1 The case for low-carbon hydrogen This study focuses on low-carbon hydrogen, which is
drawing renewed attention6 as a potential option for
Internationally, there is wide agreement not only about decarbonizing certain energy-intensive sectors (such as
the urgency of rapidly reducing greenhouse gas emissions heavy, long-haul transportation) and industries (such as
to avoid the worst impacts of climate change, but cement, iron, and petrochemicals).7 As part of a portfolio
also about the main elements of a viable strategy for of advanced clean energy technologies, hydrogen offers
achieving full decarbonization on an economy-wide basis. several advantages: It can be produced with low emissions
Comprehensive efforts to increase energy efficiency from a variety of feedstocks using a variety of methods, it
and to electrify as many energy end-uses as possible, emits no carbon dioxide (CO2) at the point of use, and it is
while also rapidly decarbonizing the electricity supply, versatile and can be used in a range of applications.
are clearly high priorities and have received considerable
attention from policy makers and analysts. But there is For these reasons, many expert analyses—and,
also growing recognition that additional technologies and increasingly, many governments and business leaders—
policies will be needed to address certain sectors and see a role for hydrogen in the clean energy transition that
end-uses that are difficult to electrify. needs to occur globally over the next several decades.
6
There have been previous waves of interest in hydrogen, including in the 1970s, 1990s, and early 2000s. Most of the focus in these earlier
periods was on potential applications as a transportation fuel, however, and enthusiasm waned when oil prices fell or, in the case of the
2000s, when gains in battery technology favored electric vehicles over hydrogen fuel cell vehicles.
7
For more information about decarbonization challenges in certain leading industries and about the importance of industrial decarbonization
in Europe specifically, see: https://www.catf.us/2021/10/industrial-decarbonisation-europe-analysis/.

To realize this potential, however, significant hurdles In recent years, SMR using natural gas has accounted
must be overcome, chief among them: for almost two-thirds of global hydrogen production,
1. Developing and rapidly scaling cost-effective with coal gasification (primarily in China) accounting
low-carbon technologies for producing, transporting, for another 19% of global production.10 As currently
storing, and distributing hydrogen. practiced, these methods are relatively carbon intensive:
In fact, hydrogen production today is estimated to
2. Expanding hydrogen use into sectors where it currently
account for 6% of global natural gas consumption and
has no market presence. A related challenge—that of
developing the large-scale hydrogen transport systems
close to 900 million tonnes of CO2 emissions annually.11
needed to link higher-cost consuming regions to
lower-cost producing regions—provides the impetus Hydrogen can also be produced by passing an electrical
for this study. current through water to split the hydrogen atoms from
the oxygen atoms in a process called electrolysis.
This method can be carbon free if the electricity used
is generated by non-emitting sources such as renewable
2.2 Hydrogen basics: current market
generators (e.g., wind and solar) or nuclear power.
and emerging challenges The term ‘green’ hydrogen is generally understood
Hydrogen is already in wide use for a variety of to refer to hydrogen produced via electrolysis using
non-energy applications, primarily as a chemical renewably generated electricity. Electrolysis, however,
feedstock in petroleum refining, to make ammonia for is currently much more expensive than other modes of
fertilizer, and in the production of methanol. Other hydrogen production; for this reason, it accounts for only
common industrial uses for hydrogen can be found in about 2% of current hydrogen production worldwide.12
food and drug production, glass and semiconductor
manufacturing, and metals fabrication. In fact, growth Adding technology to capture and store CO2 emissions
in these sectors has sharply boosted worldwide demand so they do not enter the atmosphere offers a means to
for hydrogen, which reached 94 million tonnes 8 in 2021, greatly reduce emissions from current, fossil-fuel-based
according to the International Energy Agency (IEA).9 modes of hydrogen production: Low-carbon hydrogen
produced via SMR with carbon capture is often called
Hydrogen is an abundant element in Earth’s environment ‘blue' hydrogen to distinguish it from either conventional
but because it occurs in nature only in combination (‘grey') hydrogen or low-carbon 'green' hydrogen.
with other chemical elements, pure hydrogen (H2) must This production pathway should be paired with strict
be produced from hydrogen-containing feedstocks. methane emission controls upstream of the hydrogen
The least costly and most widely used method for production facility.
producing pure hydrogen today is steam methane
reforming (SMR): in this process, natural gas, which Costs for producing grey hydrogen using conventional
is largely composed of methane (CH4), reacts with SMR or gasification are highly dependent on fossil-fuel
high-temperature steam in the presence of a catalyst prices. In 2021, according to the IEA, the levelized cost of
to generate pure hydrogen gas and carbon monoxide. producing hydrogen from natural gas in different parts
Another conventional production method involves of the world ranged from a low of $1 per kilogram (kg)
gasifying coal or another hydrocarbon feedstock to as much as $2.5 per kg (around $30–$75 per MWh of
(for example, coal mixed with biomass or plastic waste). hydrogen). The same IEA report estimates that adding
carbon capture to reduce CO2 emissions increases
8
Throughout this report, quantities of hydrogen are given in units of mass, specifically kilograms (kg) or tonnes (metric tons) and in some
cases also in terms of equivalent energy content (in units of megawatt-hours). One megawatt-hour (MWh) corresponds to the energy
content of approximately 30 kg of hydrogen. One tonne (or metric ton) is equal to 1,000 kilograms.
9
https://www.iea.org/reports/global-hydrogen-review-2022/executive-summary
10
https://iea.blob.core.windows.net/assets/c5bc75b1-9e4d-460d-9056-6e8e626a11c4/GlobalHydrogenReview2022.pdf
11
https://www.iea.org/fuels-and-technologies/hydrogen
12
Electrolysis using renewably generated electricity accounts for an even smaller share of global hydrogen production at present: on the order
of one-tenth of percent according to the IEA (see: https://www.iea.org/reports/the-future-of-hydrogen).

production costs for blue hydrogen to around $1.5–$3 per
kg (around $45– $90 per MWh), while current costs for
hydrogen production via renewable-powered electrolysis
range from $4–$9 per kg (around $120–$270 per MWh).13
Reducing production costs for low-carbon hydrogen

is obviously one priority for enabling increased use of
hydrogen as part of a broader decarbonization strategy.
But hydrogen production is only one part of the value
chain for clean hydrogen—substantial investments
and technology improvements will also be needed to
build out hydrogen transport, storage, and distribution
infrastructure and to adapt end-use technologies so
they can operate efficiently on hydrogen fuel, which
has different combustion properties than conventional
fossil fuels.
Transport and storage, in particular, present challenges

because pure hydrogen, which exists as a gas at
ambient temperatures and pressures, is far less dense
than conventional fossil fuels and must be compacted,
through compression and/or refrigeration, to be
handled efficiently.14
Once compressed, gaseous hydrogen can be moved

economically via pipeline, but for bulk transport by ship,
the hydrogen must either be liquefied or converted to a
chemical “carrier” that is easier to transport and store in
large quantities. As discussed in more detail in Section 3,
either approach involves several process steps, each of
which adds technological and operational complexity to
the overall value chain and entails significant energy and
efficiency losses—with concomitant impacts on cost.15
13
https://www.iea.org/reports/global-hydrogen-review-2021/executive-summary. Data for 2022 are not available but the worldwide increase
in energy prices over the last year has almost certainly led to higher prices for hydrogen as well.
14
Although hydrogen is more energy dense than conventional fossil fuels on a mass basis, it is far less dense on a volume basis.
15
A further point is that neither liquefaction nor conversion to another liquid chemical carrier fully overcomes hydrogen’s disadvantages, in
terms of low volumetric energy density, relative to conventional fossil fuels. For example, liquified hydrogen has only 40% the energy of an
equivalent volume of liquified natural gas (LNG); in addition, liquified hydrogen needs to be maintained at a significantly lower temperature
(-253 degrees Celsius versus -162 degrees Celsius for LNG). Some analysts argue that these inherent disadvantages will significantly
constrain the real-world potential for large-scale use of hydrogen as a low-carbon fuel alternative.

SECTION 3
Potential Carriers and Value Chains

for a Global Hydrogen Market
This section describes the different hydrogen carriers 3.1 The hydrogen generation plant
and transport options considered for this analysis,
identifying the main components of the value chain in The value chain for all hydrogen carriers considered in
each case and highlighting potentially important energy, this analysis begins with a plant that uses natural gas as
infrastructure, and handling considerations. For transport a feedstock and employs auto thermal reforming (ATR)
via marine vessel, the analysis considers liquid hydrogen, to produce pure hydrogen gas from methane. Several
methylcyclohexane (MCH), and ammonia. Pipeline currently proposed ATR plants have target capture
transport was considered as the only viable option rates ranging from more than 95% to 97%. This analysis
for large-scale imports of gaseous hydrogen where assumes 97% capture of CO2 emissions from future ATR
geographically feasible; it is discussed after the marine hydrogen plants; it further assumes that all captured
carrier options (Section 3.5).16 CO2 is compressed and disposed of at or near the
hydrogen generation plant.
Figure 1: Hydrogen Value Chain – Low Carbon Hydrogen Production
16
Because of the very low density of gaseous hydrogen, it generally would not be cost-effective to transport large quantities of gaseous hydrogen over
long distances by ship or truck—for this reason, we consider pipelines as the only mode of transport for imports of gaseous hydrogen.

3.2 Liquid hydrogen (LH2) infrastructure costs—including costs for cryogenic
storage vessels, cryogenic piping, and other specialized
Figure 2 illustrates the value chain for liquid hydrogen, equipment—at both the import and export locations.
which begins with compressing and cooling gaseous
hydrogen at the export location to liquefy it for export. Because of these liquefaction and storage requirements,
The power requirements for this step are substantial, liquid hydrogen is the most capital intensive among the
as the hydrogen must be cooled to, and subsequently import pathways considered. Handling large volumes of
kept at, a temperature of -253°C. For purposes of this liquid hydrogen would also entail a significant scaleup
analysis, KBR assumes that liquid hydrogen would also from today’s capacities. Furthermore, the transportation
serve as the marine bunker fuel during transport—in of liquid hydrogen by ship has been proven but is years
other words, vessels carrying liquid hydrogen would away from being an established, commercial, and
consume a portion of their cargo on the way to the dependable method for transporting large quantities
import destination. The need to maintain liquid hydrogen of hydrogen at anything close to the scale of liquefied
at very low temperatures throughout storage, transport, natural gas (LNG). Challenges include managing boil-off
and handling operations has significant energy and during storage, loading and unloading operations, and
cost implications for this value chain; it also adds to limiting supply chain emissions.
Figure 2: Hydrogen Value Chain – Liquid Hydrogen as a Carrier
3.3 Methylcyclohexane (MCH) form, MCH, is required at the export and import
terminals. The need to reload toluene and ship it back
In this value chain, gaseous hydrogen is used to to the export location is another. Also, only about 6%
hydrogenate toluene, an organic solvent, to form liquid of MCH, by weight, consists of hydrogen. This means
methylcyclohexane (MCH), another organic solvent that much of the shipping cost and energy for this
which is suitable for marine transport. Once MCH import pathway goes to ferrying the organic liquid
reaches the import destination, it is dehydrogenated carrier rather than the hydrogen itself. KBR’s analysis
to release hydrogen and the original toluene molecule, assumes that ships carrying MCH will operate on LNG.
which is then shipped back to the exporter to restart the The requirement to supply large volumes of toluene is a
cycle. From a storage and transport perspective, liquid further challenge, especially considering that toluene is
organic hydrogen carriers (LOHC) like MCH and toluene largely a by-product of refining.
have several advantages: both are liquid at ambient
temperatures, have relatively low volatility and toxicity, Importantly, this choice of carrier incurs heavy energy
and are otherwise similar to familiar crude-oil-based fuels, penalties at the end of the value chain, owing to
which simplifies handling and infrastructure requirements. the substantial heat and power inputs required to
dehydrogenate MCH and deliver purified hydrogen as
However, the toluene/MCH value chain also has the end product. The dehydrogenation process alone
distinct drawbacks. First, extensive storage can consume 43%–52% of the hydrogen produced at the
infrastructure, for both toluene and its hydrogenated generation plant and substantially increases the initial

production volume required to deliver an equivalent is technologically mature and already in use in several
quantity of hydrogen at the import location. Finally, industries, the same is not true for the reverse process of
while the process for hydrogenating toluene to MCH dehydrogenating MCH to liberate pure hydrogen.
Figure 3: Hydrogen Value Chain - Toluene / MCH as a Hydrogen Carrier
3.4 Ammonia (NH3) most ammonia production in the world, to convert

gaseous hydrogen and air to ammonia. This part of the
Ammonia is another chemical that has drawn interest value chain requires heat and electricity inputs, but
as a potential carrier for large-scale hydrogen transport. the technologies and processes involved are mature.
Ammonia is already one of the most widely used By contrast the technologies needed to efficiently
chemicals in the world—as a result, production methods dehydrogenate (or 'crack') ammonia to liberate hydrogen
are well-developed, storage and transport requirements once it reaches the import destination are still in
are well understood, and extensive infrastructure for relatively early stages of development. Present methods
producing and distributing ammonia, including ships for cracking ammonia require significant energy inputs.
and terminals, already exists. Ammonia is also much
less demanding than LH2 in terms of the temperature Because of these requirements, KBR also considered
and pressure conditions required to keep it liquid— a case where ammonia is delivered without
this means that it can be stored in common 'Type C' dehydrogenation (cracking) for use in applications such
pressurized tanks and requires no specialized handling as ship bunkering, power generation, and other end
or equipment. Nonetheless, ammonia presents certain markets. While this case does not afford an apples-
toxicity hazards that could be amplified by a large to-apples comparison with the value chains for other
increase in maritime shipments of ammonia. (The roughly hydrogen carriers, which are assumed to deliver high-
20 million tons of ammonia that are currently transported purity hydrogen as the ultimate end-product, it may be
by ship each year account for less than 15% of today’s a realistic option for reducing the costs of transitioning
global market for ammonia.) to low-carbon hydrogen in some energy applications.
As with liquid hydrogen, the analysis assumes that ships
Figure 4 illustrates the value chain for ammonia. transporting ammonia use ammonia as bunker fuel—
As indicated in the figure, KBR assumed use of the in effect, consuming some of their cargo enroute.
Haber-Bosch process, which already accounts for

Figure 4: Hydrogen Value Chain - Ammonia as a Hydrogen Carrier
3.5 Pipeline transport of Nonetheless, the low volumetric energy density of

hydrogen means that the energy needed to deliver
gaseous hydrogen hydrogen by pipeline is three times the energy required
In contrast to the liquid carrier options considered in this to deliver an equivalent amount of energy in the form
analysis, the value chain for pipeline transport of gaseous of natural gas. Delivering hydrogen by pipeline has the
hydrogen is relatively simple. The energy-intensive steps advantage of being more technologically mature and
of liquefying hydrogen or converting it to a carrier at the proven than the carrier/marine pathways. Distance,
export location and then reversing the process to liberate however, is a greater constraint for pipeline transport,
hydrogen at the import location are completely avoided which limits the number of potential export locations
and other requirements for storage and transportation that could cost-effectively deliver low-carbon hydrogen
are also greatly reduced. Gaseous hydrogen must be to Europe via this pathway. In addition, building out new
compressed for pipeline transport, but the associated pipeline infrastructure—particularly across national
energy requirements are relatively modest.17 borders—may present political difficulties that would
not apply to marine shipments.
17
The analysis accounts for the need to place compression stations along pipeline routes (at intervals of approximately 100 kilometers);
it assumes that these stations are powered by electricity and includes associated electricity costs in pipeline operating expenditures
(see further discussion in Section 4).

SECTION 4
Methodology
4.1 Scope of analysis and study design (250,000, 1 million, and 10 million tonnes per year) which
were assumed to be reached in 2030, 2040, and 2050,
The KBR analysis considered four different pathways for respectively. In addition, KBR considered two scenarios
hydrogen delivery (liquid hydrogen, MCH, and ammonia for ammonia as a hydrogen carrier: in one scenario,
delivered via maritime transport and gaseous hydrogen ammonia delivered to Europe would be directly used as a
delivered via pipeline transport), six potential export fuel; in the other scenario, ammonia would be 'cracked' to
locations (Algeria, Argentina, Norway, Qatar, Saudi liberate pure hydrogen after reaching Europe.
Arabia, and the United States); and three import volumes
Figure 5: Pathways for Low-Carbon Hydrogen Imports to Europe

KBR’s cost estimates were developed using an in-house
Table 1: Key Parameters in Study Design modeling tool that accounts for location-specific
capital and operating expenditures (CAPEX and OPEX,
Variable Specification
respectively) across the different segments of the
hydrogen value chain (production, export, transport,
Volume of Delivered H2 250,000 /1,000,000/ and import) to calculate overall LCOH at the import
(tonnes/yr) 10,000,000 location. CAPEX for each supply chain component
includes costs for materials, construction, design and
Carriers LH2 / NH3 / MCH
project management, and insurance and certification,
Marine Transport (LH2 / NH3 Norway / US / Argentina / as well as contingency costs.18 OPEX for each
/ MCH) Qatar / Saudi Arabia component includes costs for fixed operations and
maintenance, power consumption, natural gas
Pipeline Transport (H2 gas) Norway / Algeria
feedstocks and non-hydrogen fuels (e.g., LNG in the
No. of Cases 71 cases that involve marine transport of MCH).19 Cost
and price data are from 2021 and are not adjusted for
inflation (see further discussion of data sources and
assumptions in Section 4.2). Costs for fees and taxes
Table 1 summarizes the combinations of parameters were not included and the analysis does not account for
that were considered for this analysis; together they any carbon emissions credits that might be generated by
resulted in 71 distinct cases. (As already noted, hydrogen using or importing low-carbon hydrogen. A discounted
imports were assumed to enter the Port of Rotterdam in cash flow model with a discount rate or weighted
all cases.) For Algeria, only pipeline transport of gaseous average cost of capital of 10% and an assumed plant life
hydrogen was considered; for Argentina, Qatar, Saudi of 30 years was used to calculate levelized cost.
Arabia, and the United States, only marine transport
To calculate estimated costs for hydrogen imports
of liquid hydrogen, liquid ammonia, or MCH were
by pipeline, KBR used PIPESIM to size the necessary
considered. For Norway, both marine transport of liquid
pipelines, assuming hydrogen inlet pressures of 80
hydrogen, ammonia, or MCH and pipeline transport of
barg (typical of existing European gas transmission
gaseous hydrogen were considered.
infrastructure) and installation of compression stations
For each case, KBR estimated levelized cost of delivered where the outlet pressure dropped below 40 barg.
hydrogen (LCOH), in U.S. dollars per kilogram ($/kg), Line sizes were set so that compressor stations would
taking into account all the major components of the be needed at intervals of approximately 100 kilometers.
hydrogen value chain. These components include: CAPEX and OPEX were estimated using IHS Que$tor
software (reflective of the first quarter of 2021), where
■ Hydrogen production, including the hydrogen generation OPEX includes imported electric power for pipeline
plant and carbon capture and sequestration system. compressor stations at an assumed cost of $80 per
■ Carrier production and export, including carrier megawatt-hour (MWh). Power to operate pipeline
production and synthesis, export storage, and export jetty. compression stations accounts for a significant share of
OPEX costs for pipeline transport. Offshore pipelines in
■ Transport via marine vessel or pipeline (pipeline transport
the Norway and Algeria cases were sized to avoid the
was considered for the Algeria and Norway export
locations only). requirement for subsea compression.
■ Import, including import jetty, carrier storage, and

regasification/liberation of hydrogen at the import facility
where applicable.
18
Contingency costs are financing costs during construction.
19
Where liquid hydrogen or ammonia are being transported, the analysis assumes that these hydrogen carriers also serve as the marine
bunker fuel for the transport vessel. See further discussion in Section 4.2).

4.2 Key assumptions, study of hydrogen.20 In reality, upstream emissions could be
significant depending on the technologies and energy
limitations, and data sources sources used throughout the value chain. Instead, the
As discussed in previous sections, KBR was asked to analysis stipulates that future hydrogen imports to Europe
conduct a techno-economic comparison of costs for will need to qualify as ‘low-carbon’ and incorporates
different potential pathways to supply Europe with several assumptions to satisfy that requirement:
imports of ‘blue hydrogen’ (i.e., hydrogen made by 1. Hydrogen is produced by combining natural-gas-based
reforming natural gas using low-carbon energy inputs and ATR with CCS technology to achieve 97% capture of CO2
carbon capture). The analysis focuses on blue hydrogen emissions at the hydrogen generation plant. The cost of
because the greater technological maturity and lower carbon capture at the ATR plant is included in KBR’s cost
cost of this production method mean that it has the estimates for hydrogen production.
potential to scale more rapidly than 'green hydrogen’ 2. Electricity requirements for the hydrogen generation plant
produced via electrolysis. However, it is important to note and at other points in the value chain are met using clean
that results from the KBR analysis pertaining to costs electricity (e.g., renewables, nuclear, or fossil fuel with
for the export, transport, and import segments of the carbon capture).
hydrogen value chain would apply equally to hydrogen
3. Other energy requirements—including for bunker fuel
made using other feedstocks and processes. during marine transport and for process heat at different
points in the value chain (for example, to liberate
Several limitations of the study design should be hydrogen from carriers such as ammonia or MCH)—
acknowledged at the outset. First, the cost analysis are self-supplied by the production of additional hydrogen
encompasses hydrogen delivery only to the Port of and factored into the mass balances used to calculate
Rotterdam—it does not account for the costs of ‘last cost for delivered hydrogen at the import location.
kilometer’ delivery to final customers, a crucial step in This explains why there is variation across different
the value chain that will impose its own transmission, export regions in terms of the initial quantity of hydrogen
storage, and distribution infrastructure requirements. that must be produced to deliver the same quantity of
Follow-up study would be needed to investigate the hydrogen in Rotterdam. In the case of MCH shipments,
costs and logistics of delivering imported hydrogen to the analysis assumes that LNG is used as the bunker fuel
during marine transport and includes those costs.
potential users that are not necessarily in the vicinity of
major receiving hubs, such as Rotterdam. 4. CO2 captured at the hydrogen generation plant is
permanently stored away from the atmosphere in a
A related point is that KBR’s cost estimates for producing suitable nearby geologic reservoir. For cost estimation
and importing hydrogen are not the costs that end- purposes, the analysis assumes that the cost of
users could expect to see. On the contrary, costs to sequestering CO2 captured during the hydrogen
end-users would reflect the additional distribution production process is $20 per tonne at all locations.
In reality, of course, cost for geologic sequestration would
and delivery costs just noted, as well as other market
vary from location to location, depending on a variety
factors—thus, final costs would certainly be higher
of factors, including distance to the sequestration site,
than production costs and likely much higher, given
reservoir characteristics and pumping requirements,
hydrogen’s challenging physical properties, than costs etc. (For comparison, a recent analysis by the U.S.
for incumbent fuels. Until better-developed markets Environmental Protection Agency estimates costs for
and pricing mechanisms begin to emerge, it will remain transporting and storing CO2 at $10–$28 per tonne.21)
extremely difficult to predict future hydrogen prices.
5. Strict methane emission control measures are in place
upstream of the hydrogen production facility.
In terms of environmental considerations, this study does
not include a full lifecycle analysis of greenhouse gas
or other emissions from the production and transport
20
The full KBR report does include some simple estimates of CO2 emissions for different hydrogen import pathways. These are driven
by the small fraction of CO2 emissions (on the order of 3%) that are not captured at the hydrogen generation plant and, in the case of
the MCH carrier pathway, by the use of LNG as a bunker fuel during marine transport. Because the underlying calculations are highly
simplified and subject to large uncertainties, and because emissions were not intended to be a focus of the analysis, we do not include
KBR’s CO2 results in this summary.
21
The EPA analysis was conducted as part of the development of a CO2 emission standard for the U.S. electric power sector. See: https://
www.epa.gov/stationary-sources-air-pollution/greenhouse-gas-standards-and-guidelines-fossil-fuel-fired-power.

Each of the above assumptions, it should be downstream of the hydrogen generation plant,
emphasized, carries its own considerable cost, for example to develop large-capacity ships that can
technology, and infrastructure requirements. In fact, operate on liquid hydrogen or ammonia22 and to improve
substantial investments and policy interventions hydrogenation and dehydrogenation processes for
will be needed to expand zero-carbon electricity hydrogen carriers like MCH and ammonia.
supplies, commercialize cost-effective carbon capture
technology, develop industrial-scale systems for the Table 2 identifies key parameters and assumptions for
geologic sequestration of captured CO2, and achieve this analysis, noting the basis for the assumption or data
near-zero upstream methane emissions—all of which source where applicable. Additional details may be
will be critical to decarbonize future hydrogen supply found in the full KBR report.
chains. Technology improvements will also be needed
Table 2: Assumptions and Data Sources in KBR Cost Estimates
Variable Assumption ($=U.S. dollar) Source
Skilled and unskilled Vary by location Compass International Publications

labor rates benchmark
Construction costs Varies by location depending on labor rates and location factor, KBR internal
where location factor takes into account import and productivity
factors. Calculated assuming local fabrication and construction and
accounting for local labor productivity factors and wage estimates.
Price for clean Algeria: $43/MWh Qatar: $47/MWh IEA 2021

electricity Argentina: $46/MWh Saudi Arabia: $46/MWh
Norway: $30/MWh United States: $35/MWh
Price for natural gas Algeria: $0.75/MMBtu Qatar: $1.25/MMBtu KBR internal information for Algeria;
Argentina: $2.94/MMBtu Saudi Arabia: $1.25/MMBtu International Gas Union Wholesale
Norway: $10.16/MMBtu United States: $3.24/MMBtu Price Report (2020-2021) for Argentina,
Qatar, and Saudi Arabia; Average TTF
Prices for 2019 & 2021 – HIS for Norway.
Cost of CO2 All locations: $20 per tonne of CO2 KBR internal
Sequestration
Average speed for 15 knots KBR internal based on industry

marine transport vessels experience
Distance from export Algeria: 2,500 kma (pipeline only) KBR internal
terminal to Port of
Argentina (Buenos Aires): 14,496 km/7,827 nautical miles Notes:
Rotterdam
(marine only) a
210 km is subsea (Medgaz to Spain) –
Norway (Oslo): 870 kmb (pipeline); 1315 km/710 nautical miles source McKinsey Hydrogen Insights
(marine) Report 2021.
Qatar (Doha): 13,364 km/7,216 nautical miles (marine only)

b
Based on Europipe II, distance from
Karsto to Dornum is 660 km plus 210 km
Saudi Arabia (Jeddah): 8,627 km/4,658 nautical miles (marine only) to Northern Netherlands.
United States (Houston): 11,464 km/6,190 nautical miles
(marine only)
Pipeline CAPEX Vary by location Calculated using IHS Que$tor software

and OPEX (2021 Q1) estimating tool
22
There are no large-capacity vessels capable of transporting liquid hydrogen in service at presence. The only existing H2 transport ship,
the Suiso Frontier, is a demonstration vessel and can transport no more than 90 tons (1250 m3) of liquid hydrogen.

SECTION 5
Results
5.1 Overall cost of delivered hydrogen

Figure 6: Levelized Cost of Hydrogen ($/kg H2)
Figure 6 summarizes KBR’s estimates of overall cost for
the different export locations, hydrogen carriers, and
import volumes considered. In all cases, the costs shown
are on a levelized basis, in U.S. dollars, per kilogram of
delivered hydrogen taking into account any additional
hydrogen production required to meet upstream fuel
needs. Note that Figures 6–8 do not include costs for
the uncracked ammonia value chain; because this value
chain does not deliver an equivalent product (i.e., pure
hydrogen), cost estimates for uncracked ammonia are
discussed separately, at the end of this section. The same
figures showing cost results in U.S. dollars per MWh of
delivered hydrogen may be found in the appendix.
Figure 7 (next page) shows that Norway, because of

its relative proximity to Rotterdam, is the least-cost
source for hydrogen delivered via pipeline at the lowest
supply volume considered (250,000 tonnes per year).
At higher supply volumes, which would allow for larger
diameter pipelines, Algeria—with lower-cost natural gas
compared to Norway—becomes the least-cost source
despite being farther away.
Figure 8 (next page) compares the least-cost export

location/hydrogen carrier options at each supply volume
considered. It indicates that the least-cost pipeline

option has a $0.2–$0.3 per-kilogram ($6–$9 per-MWh) Among potential export regions for marine shipments,
cost advantage over the least-cost marine-transport the Arabian Gulf is the least-cost source for all types of
option (i.e., cracked ammonia sourced from the hydrogen carrier considered and at all supply volumes.
Arabian Gulf) at all the import volumes and export This is due to a combination of advantages with respect
locations considered. to shipping distance, natural gas feedstock price, and a
Figure 7: Levelized Cost of Hydrogen by Pipeline in U.S Dollars ($) per kg
Figure 8: Lowest Levelized Cost of Hydrogen Across Various Supply Chains

competitive capital investment structure. Norway is the regions other than the Arabian Gulf could be competitive
most expensive source for marine imports, largely due as suppliers of low-carbon hydrogen to future global
to high feedstock costs and higher construction costs for markets if they make the necessary investments in
hydrogen producing and exporting infrastructure. production and export capability.
Among liquid hydrogen carriers that can be transported Finally, the KBR results show that costs for delivered
by ship, ammonia is the least costly option across all hydrogen decline at higher supply volumes for all carriers
export locations and at all supply volumes. Costs for and export locations, owing to economies of scale.
liquid hydrogen and MCH are higher than for ammonia
in all cases because of the greater infrastructure and Table 3 shows estimated costs for imports of uncracked
energy requirements associated with the full value chain ammonia from different export locations (additional
for these options. figures in $/MWh are provided in the appendix.) As noted
previously, ammonia can be directly used as a fuel or
Comparing KBR’s cost estimates for ammonia across feedstock in certain applications, thereby avoiding the
different export locations, the Arabian Gulf region has dehydrogenation step needed to liberate pure hydrogen
a consistent cost advantage but the cost differential at the end of the value chain. This substantially lowers
between Arabian Gulf and North or South America costs, such that marine imports of uncracked ammonia
is modest compared to the cost difference between from all export locations except Norway are more cost-
ammonia and other liquid hydrogen carriers. Specifically, effective than pipeline transport of hydrogen gas. It is
ammonia from the United States or Argentina is important to emphasize, however, that the estimates
estimated to cost from $0.20 to $0.40 more per kg shown in Table 3 assume that ammonia, not hydrogen,
($6– $12 more per MWh) of hydrogen delivered to is delivered as the end product. However, further
Rotterdam than ammonia from the Arabian Gulf, technology development would be needed to expand
depending on the overall supply chain volume. direct end-use opportunities for ammonia.
This roughly 10%– 15% cost differential suggests that
Table 3: Hydrogen Equivalent Cost Results for Uncracked Ammonia
Levelized Cost of H2 Delivered to Rotterdam as Uncracked Ammonia ($ per kg)
250,000 tonnes/year 1 million tonnes/year 10 million tonnes/year
Arabian Gulf (Doha, Qatar) 2.3 1.8 1.4
United States (Houston) 2.5 2.0 1.6
Argentina (Buenos Aires) 2.5 2.1 1.6
Norway (Oslo) 3.4 3.0 2.5
As already noted, gaseous hydrogen delivered by pipeline the added capacity needed to handle larger flows of
is the least costly import option for all the cases examined hydrogen. When total pipeline cost is divided by total
in KBR’s analysis. Figure 9 shows total installed pipeline imports, however, the per-kilogram cost of delivered
cost for each of the pipeline delivery cases considered. hydrogen falls at higher import volumes (reflecting
As one would expect, pipeline costs are consistently economies of scale) and Algeria, with lower natural gas
lower for Norway than for Algeria because Norway is costs than Norway, becomes the least-cost export region
substantially closer to Rotterdam (Figure 10) and pipeline despite its greater distance from Rotterdam.
costs increase at higher import volumes because of

Figure 9: Pipeline Total Installed Cost ($ Millions)
Figure 10: Pipeline Distance to Rotterdam for Norway and Algeria

5.2 Components of overall cost report; see footnote 3. Cost breakdowns in $/MWh of
delivered hydrogen are provided in the appendix to this
Figure 11 illustrates supply chain costs for hydrogen report.) It bears noting, however, that the breakdown of
carriers produced in the Arabian Gulf at different capital costs is generally the same irrespective of export
import volumes. We focus on these results because location. Also, capital costs for the import portion of the
the Arabian Gulf is the export location that offers the value chain—including costs for storage terminals and
lowest overall cost of delivered hydrogen for all the dehydrogenation processes at the receiving port—are
marine carriers considered. (Similar cost breakdowns the same regardless of the export location.
for other export locations are provided in the full KBR
Figure 11: Cost Breakdown for Different H2 Carriers Imported from the Arabian Gulf

All the carrier options considered incur significant capital gas prices, which are the main driver of operating costs
expenses in the hydrogen production, hydrogenation/ for hydrogen production. In fact, the price of natural
liquefaction, and dehydrogenation/gasification steps gas in the producing region accounts for 20%–70% of
of the supply chain, but capital expenses for the the estimated cost for delivered hydrogen across the
dehydrogenation step are particularly high for MCH. supply chains and import pathways KBR considered.
Not surprisingly, the higher the price of natural gas,
Similarly, liquid hydrogen is an outlier for the very high the more important a factor it becomes as a driver of
capital expenses associated with constructing export hydrogen production costs. Thus, differences in natural
and import terminals and storage facilities—this is due gas prices account for a large share of the difference in
to the special refrigeration and compression demands of delivered cost of hydrogen between the Arabian Gulf,
this carrier. Because of these demands, liquid hydrogen as the lowest-cost producing region, and Norway as the
emerges as the most expensive carrier, with higher costs highest-cost producing region.
than even MCH in most cases.
Figure 13 shows the breakdown of estimated costs for
Figure 12 breaks down estimated costs for the pipeline delivery of hydrogen to Rotterdam from Algeria
production, export, transport, and import steps of and Norway at the (assumed) 2040 import volume of
the value chain for cracked ammonia from different 1 million tonnes per year. Hydrogen production costs
export regions (we focus on cracked ammonia in this dominate for exports from Norway because of high
comparison because it is the preferred—i.e., least-cost— natural gas prices. By contrast, pipeline costs dominate
carrier for pure hydrogen delivered by marine transport in the case of exports from Algeria, where natural gas
regardless of export location). The figure, which uses prices are low. Naturally, these differences can become
KBR’s results for an annual import volume of 250,000 more pronounced as prices change, especially given a
tonnes, serves to highlight the importance of natural recent price surge in Dutch natural gas futures.
Figure 12: Levelized Cost of Hydrogen Breakdown ($/kg H2) 250,000 Tonnes Per Year H2 Supply Chain – NH3 Carrier
Figure 13: Cheapest Hydrogen Production Transported to Rotterdam via Pipeline ($/kg H2) 1 Million Tonnes
Per Year H2 Supply Chain (2040)

5.3 Summary of results from the KBR cost analysis
Three hydrogen delivery options to Rotterdam consistently ranked as the most cost-effective
across all supply chain volumes: Gaseous hydrogen by pipeline from Norway and Algeria and
ammonia via maritime shipping from the Arabian Gulf. These options are most cost-effective
compared to all other geographies and maritime transport options including liquid organic
hydrogen carriers (such as MCH) and liquid hydrogen.
When maritime transport of hydrogen and transport via pipeline are both possible options,
transporting hydrogen by pipeline consistently ranks as more cost-effective. Furthermore,
it provides a simpler solution compared to the expansive maritime transport supply chain.
Among the marine transport options considered, ammonia emerges as the lowest-cost carrier
and the Arabian Gulf is the lowest-cost exporter, largely due to a combination of low natural gas
prices, geographic proximity to Rotterdam and competitive construction costs.
Estimated costs for ammonia imports from locations in North and South America are on the order
of 10%–15% higher than estimated costs for ammonia imports from the Arabian Gulf (the modelled
cost differential ranges from $0.20 to $0.40 per kilogram of delivered hydrogen, or $6–$12 per
MWh of hydrogen, depending on overall import volume). This suggests that the United States
could be a competitive supplier of low-carbon hydrogen to global markets, particularly if the
price gap between U.S. and European natural gas markets continues to widen and if recently
adopted U.S. policies to accelerate clean hydrogen development have the desired effect.
Hydrogen liberation operations at the point of import are energy-intensive processes and consume
a significant portion of the energy carried by the hydrogen. In the case of liquid hydrogen,
hydrogen liquefaction imposes a significant energy penalty at the export location. These losses can
be reduced with scale and technology improvements but will likely stay significant as they are
inherent to the fundamental physics that apply to each step in the supply chain.
Owing to economies of scale, costs per kilogram of delivered hydrogen decline with higher
import volumes for all carriers and export locations.
Natural gas prices are a major driver of hydrogen production costs, and thus of estimated costs
for delivered hydrogen across all the supply chains and import pathways considered in this analysis.
The use of uncracked ammonia rather than pure hydrogen in some applications could further
reduce costs because it avoids the dehydrogenation step at the end of the value chain.
For pipeline transport, Norway is the lowest-cost exporter at the smallest hydrogen supply volume
considered (250,000 tonnes per year). At higher pipeline transport volumes, Algeria, because of its
lower natural gas prices, is the lowest cost exporter.

SECTION 6
Policy Context
Many governments have recognized the need for The European Green Deal includes a hydrogen strategy
advanced technologies, including CCS and low- and the European Commission in 2021 proposed a
carbon hydrogen, to achieve decarbonization goals. European Network of Network Operators for Hydrogen
The European Union’s Nationally Determined to ensure sound management of the EU hydrogen
Contribution (NDC) under the Paris Agreement does network and facilitate the trade and supply of hydrogen
not include specific plans for hydrogen use but does across EU borders. More recently, in May 2022, the
contemplate low- and zero-emission standards for heavy- Commission released a plan to rapidly reduce Europe’s
duty transport vehicles.23 In addition, low-carbon fuels reliance on fossil fuels from Russia and accelerate the
would be recognized in the context of regional trading clean energy transition. Known as REPowerEU, the plan
programs that will cover electric sector emissions as well calls for decarbonizing 30% of EU steel production using
as emissions from industrial and aviation sources. renewably generated hydrogen by 2030.25
In July 2021, the European Commission issued a More recently, in March 2023, the European Commission
proposed revision of EU gas market rules, called the published the Net Zero Industry Act (NZIA), which aims
“Hydrogen and gas markets decarbonization package” to strengthen the global competitiveness of European
(or “Gas package”), which outlines plans to decarbonize manufacturers of net-zero technologies and support
existing natural gas networks and regulate the nascent efforts to decarbonize hard-to-abate sectors and
renewable and low-carbon hydrogen market.24 industries. With respect to hydrogen specifically, NZIA
Gas market rules are currently being revised so that calls for ramping up EU electrolyzer capacity to meet the
they align with EU plans to achieve a 55% reduction REPowerEU domestic hydrogen production goals. The
in greenhouse gas emissions by 2030. Act sets an overall goal for installed electrolyzer capacity
of “least 100 GW hydrogen” by 2030.
23
https://www.catf.us/2022/04/wide-array-countries-include-carbon-management-hydrogen-nuclear-energy-climate-commitments
24
https://energy.ec.europa.eu/topics/markets-and-consumers/market-legislation/hydrogen-and-decarbonised-gas-market-package_en
25
https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-
sustainable-energy-europe_en

As part of NZIA, the European Union also launched a third countries (e.g., in the Middle East and North Africa),
Hydrogen Bank in March 2023 to provide a mechanism to import low-carbon and renewable hydrogen without
for closing the hydrogen cost gap. Utilizing resources any clear emissions accounting or related requirements.
from the EU Innovation Fund (discussed in the next In setting effective standards and certification systems
paragraph), it will aid the European Union in meeting for new low- and zero-carbon fuels, the European Union
its hydrogen targets, initially by subsidizing domestic can learn from its own past successes (such as regulating
renewable hydrogen production and eventually also by diesel sulfur) while also setting a helpful example for
reducing the cost of hydrogen imports into Europe from other countries and regions.
other regions.
Around the world, the IEA’s 2022 Global Hydrogen
The EU Innovation Fund is one of the world’s largest Report reports that 26 governments have now released
legislative programs to support innovative low-carbon hydrogen strategies (up from 17 countries in 2021) and
technologies and ‘lighthouse’ projects using funds raised more than 20 governments have announced they are
through the EU Emissions Trading Scheme (ETS). It working to develop strategies. According to the
provides the legal basis for the Hydrogen Bank’s budget Review, some 15 hydrogen projects with CCS are
and financial support mechanisms. A third round of 41 operational today, producing approximately 700,000
projects selected for funding was announced in July tonnes of hydrogen annually, mostly in the United
2023; these projects cover decarbonization options States, Canada, and China; globally, another 50
for a range of hard-to-abate sectors (steel, biofuels, projects are under development.
sustainable aviation fuels) and technologies, including
renewable hydrogen and its derivatives. Among the potential export regions considered in this
analysis, several countries in the Middle East and North
Finally, the European Commission has proposed a system Africa (MENA) region are interested in establishing a
of terminology and certification for low-carbon hydrogen leadership position in both blue and green hydrogen
and low-carbon fuels that complements similar rules production. A recent report from CATF details current
proposed for renewably generated hydrogen under activity in this area, including early projects by major
the revised Renewable Energy Directive. An additional, Saudi and UAE companies to demonstrate the export
encouraging development is the European Parliament’s supply chain for blue ammonia, as well as multiple
recent push for a life-cycle based standard for hydrogen initiatives to develop green hydrogen production
certification.26 Though not the focus of this study, capacity throughout the region. Several of the green
progress on the issue of certification and standards is hydrogen projects that have been announced in the
critically important, both for meeting climate goals and Middle East and North Africa are being developed to
to address the practical demands of creating a robust serve the European market; most of these projects, it
global market for new low- and zero-carbon fuels. By should be noted, are still in the agreement or planning
defining and implementing standards for these fuels, stages and have yet to begin construction.
Europe can shape the nascent global hydrogen market
and push for increased climate ambition outside the In the United States, the Infrastructure, Investment and
bloc. EU Member States and international groups Jobs Act of 2021 authorized $9.5 billion in federal funding
have made efforts to develop certification systems for for clean hydrogen, including $8 billion to develop
hydrogen in the past, however most existing schemes are regional hydrogen ‘hubs’, as well as an additional $12
voluntary and not fit for purpose in the sense that that billion for CO2 storage. In September 2022, the U.S.
they do not support full emissions accounting (instead Department of Energy (DOE) released a draft National
they often include only emissions from fuel production Clean Hydrogen Strategy and Roadmap that sets out
and some downstream emissions). At the same time, three key priorities: targeting strategic, high-impact
many European countries and companies have begun uses of hydrogen; reducing the cost of clean hydrogen
initiating memoranda of understanding (MOUs) with to $1/kg by 2031; and deploying at least four regional
26
For a recent CATF press release on the European Parliament’s recent action, see: https://www.catf.us/2023/02/european-parliament-
pushes-for-life-cycle-analysis-backed-standard-for-hydrogen-and-ammonia/#038;swpmtxnonce=8266bc879c. Additional information
on how the European Union can certify low-carbon hydrogen and on assessing full lifecycle greenhouse gas emissions from hydrogen
production and use is available from several CATF blog posts. See: https://www.catf.us/2022/07/how-eu-can-certify-low-carbon-
hydrogen/ and https://www.catf.us/2022/10/hydrogen-lca-emissions-across-life-cycle/.

clean hydrogen hubs.27 (The $1/kg cost target was first
announced in 2021 as part of DOE’s Hydrogen Earthshot
initiative.) More recent legislation, the Inflation Reduction
Act of 2022, contains additional provisions designed to
subsidize clean hydrogen production, including a new,
10-year hydrogen production tax credit28 and an increase
in the existing (Section 45Q) tax credit for carbon capture
and sequestration. Since this analysis was conducted
prior to the passage of the Inflation Reduction Act, KBR’s
cost estimates do not account for the impact of these
provisions. But it is worth noting that recently adopted
U.S. tax policies, by reducing the cost of producing clean
hydrogen in the United States, could also make the United
States a more appealing supplier to future global markets
for low-emissions hydrogen and ammonia.
27
For more information about regional clean hydrogen hubs, including CATF recommendations for ensuring that these hubs are clean,
equitable, and sustainable, see: https://www.catf.us/2022/06/what-makes-good-clean-hydrogen-hub/
28
The new Section 45V production tax credit introduced by the Inflation Reduction Act (IRA) ranges from $0.60 to as much as $3.00 per
kilogram of hydrogen, depending on lifecycle emissions associated with the mode of hydrogen production used. To qualify for the Section
45V tax credit, the carbon intensity of hydrogen production must be no more than 4 kg CO2e per kg of H2. (The maximum tax credit of
$3.00 is available only to hydrogen produced with a carbon intensity below 0.45 kg CO2e per kg H2.) The IRA also increased the existing
Section 45Q tax credit for CCS to $85/tonne CO2 captured. This credit could be available to firms that use fossil-fuel-based methods to
produce hydrogen, together with CCS systems to offset associated CO2 emissions. Note that the Section 45Q and 45V tax credits cannot be
combined, so hydrogen producers must choose one if they qualify for both.

SECTION 7
Policy Recommendations
and Areas for Further Research
As described in the previous section, two of the world’s governments (or other public bodies) could offer long-
largest energy markets have recently announced major term contracts to pay the difference between a pre-
policy initiatives aimed at supporting clean hydrogen: defined reference price for a desired product (such as
the European Union with its Green Deal and related low-carbon hydrogen or a ton of avoided CO2 emissions)
policies, as well as REPowerEU, and the United States and a strike price required for the new technology to be
with the Infrastructure, Investment and Jobs Act and commercially viable. Known as “contracts for difference”
Inflation Reduction Act. Myriad recent announcements (CfDs) or “carbon contracts for difference” (CCfDs), the
and memoranda of understanding concerning new idea is to provide long-term price certainty—in effect,
hydrogen projects are a strong testament to the appetite transferring price risk to a public counterparty—as a way
of countries and investors for developing clean hydrogen to incentivize private investment and thereby kick-start
technologies. High cost, however, remains a significant the development of new technologies.
barrier to the realization of these projects and to the
adoption of hydrogen in sectors that could benefit from These and other strategies for supporting zero-carbon
the deployment of climate-friendly fuels. fuels are currently under discussion by the European
Commission.29 More broadly, developing and scaling
Various mechanisms have been proposed to help supply chains for clean hydrogen will require major
overcome these cost barriers. For example, national investments and supportive policies in both consuming
29
Specifically, the European Commission is discussing implementing competitive bidding mechanisms for CfDs, CCfDs, and other comparable
instruments through the Innovation Fund, which is financed by revenues from allowance sales under the EU emissions trading system
and is the world’s largest funding program for low-carbon technologies. The Commission is considering implementing CfDs for domestic
hydrogen purchased with guarantees from the new European hydrogen bank announced by Commission president, Ursula von der Leyen, in
September 2022.

Challenges for Scaling Domestic Production of Clean Hydrogen in Europe
As noted in previous sections, European demand for clean hydrogen is expected to increase dramatically
in coming decades, from 280 TWh today to more than 2,000 TWh by 2050 according to some estimates.
Accordingly, the REPowerEU Plan puts near-term pressure on EU Member States to rapidly scale hydrogen
production and import capacity, including a commitment to collectively produce—by 2030—up to 10 million
tonnes per year of domestic hydrogen and import a further 10 million tonnes per year from other regions.
To put this target in perspective, meeting just 80% of the European Commission’s target for domestic
production of renewable ‘green’ hydrogen (i.e., 8 million tonnes per year) would consume roughly half of all
the additional electricity output planned to come from renewable energy sources between 2022 and 2027—
or the equivalent of approximately 15% of total electricity demand in Europe today.
Given the significant, multi-faceted challenges inherent in a scaleup of renewable power generation of
this magnitude, European governments and policymakers must think realistically about viable domestic
production and import pathways for hydrogen and take an approach that is open to different technology
options based on their merits in terms of emissions reductions, technical feasibility, and cost-effectiveness.
and producing countries.30 Other CATF reports have processes. Recognizing these hurdles, CATF concurs
identified several priority areas for further policy with the overall conclusion reached by a recent European
action31 and have underscored the need for coordinated, Commission study, which found that most of the
deliberate efforts by multiple stakeholders to develop hydrogen needed to meet future European demand
markets for low-carbon hydrogen in those applications will likely be either (a) produced near the point of
where it makes sense. Concerted policy interventions end-use or (b) imported by pipeline.32 Additional
will also be needed to responsibly advance carbon high-level conclusions and policy recommendations
management projects in hydrogen producing regions from this analysis are summarized below:
and to de-risk the build-out of new infrastructure for CO2
transport and geologic sequestration. Other types of 1. Plans for hydrogen deployment should focus on
“no-regrets” sectors, where other energy-efficient
policies, such as fuel-neutral government procurement
or cost-effective decarbonization options are currently
policies for low- and zero-carbon fuels can be effective
lacking. Examples include current uses of hydrogen
in stimulating markets for an array of decarbonization
as a chemical feedstock in the refining and chemical
options, including clean hydrogen. sectors in addition to future potential uses in the steel
sector. A clear understanding of (a) how much hydrogen
The findings from this study underscore the numerous priority sectors such as fertilizer production, refining, and
hurdles to transporting hydrogen by sea, which include, heavy-duty transportation will need and (b) how much
but are not limited to, the inherent energy requirements low-carbon hydrogen Europe can produce domestically
(and potential emissions implications) of associated and how much, realistically, can be imported, is critical
30
For example, CATF’s report on clean hydrogen production opportunities in the Middle East and North Africa (MENA) region, calls for MENA
countries to step up regional coordination, collaborate on technical pilots, develop comprehensive domestic policy frameworks to support
low- and zero-carbon fuels, advocate for international financial institutions and donor governments to include hydrocarbon-derived zero-
carbon fuels in their investment portfolios, build capacity within government agencies, and educate private lenders and investors about
advanced energy and climate technologies. The report, titled Poised to Lead: How the Middle East and North Africa Can Accelerate the
Global Energy Transition, can be accessed at https://cdn.catf.us/wp-content/uploads/2022/05/23114054/poised-to-lead-middle-east-north-
africa-accelerate-global-energy-transition.pdf.
31
See for example, https://www.catf.us/2021/10/industrial-decarbonisation-europe-analysis/ and https://www.catf.us/2022/07/how-eu-can-
certify-low-carbon-hydrogen/.
32
Another recent study from the European Commission, by Fraunhofer et al., reaches a similar conclusion about the likelihood of a
relatively smaller role for hydrogen imports to Europe.

to developing effective and ultimately successful policies Whether clean hydrogen is produced in Europe or imported,
for expanding hydrogen use in those applications where it it will have to be delivered in a reliable and cost-effective
makes sense. manner to end users. Associated ‘last-mile’ costs and
challenges, while not the focus of this study, are potentially
2. Hydrogen demand forecasts should be re-examined
significant and merit attention from policymakers.
to develop more realistic estimates. At present,
some prominent policy targets, such as the European 6. Public policies and resources should be leveraged
Commission's goal of supplying the European market to prioritize the most promising and cost-effective
with 20 million tons per year of clean hydrogen by 2030,33 technologies first, recognizing that, while option value
seem to lack a clear basis. Realistic projections, grounded is important, so is avoiding expensive investments in
in thoughtful analysis, are critical to designing effective infrastructure that is inherently inefficient or unlikely to
and ultimately successful policies. Moreover, by focusing be used. The reality is that additional technologies and
on this very near-term goal, European governments a deeper paradigm change will be needed to achieve
risk missing opportunities to integrate the broader set net zero greenhouse gas emissions in Europe and
of climate-friendly technologies that will be needed to elsewhere—current policies are not enough. Thoughtful
achieve net zero by mid-century. Failure to support this assessment of the full range of strategies that could be
integration together with the timely development and available to reduce greenhouse gas emissions, including
commercialization of needed innovations could mean options for sectors such as power, district heating, and
that the bloc finds itself in 2040 still short of meeting light-duty vehicles that are more climate-beneficial and
its 2050 goals, and with not enough time to deploy the less costly than hydrogen, will significantly reduce the
technologies that will be needed to close the gap. risk, both of missing the European Union’s climate and
emissions targets and of creating stranded assets through
3. An internationally recognized system for hydrogen
the misallocation of public funds.
certification is urgently needed. Although several
international groups and national governments are The comparative cost analysis described in this report
working to develop methodologies for certifying clean highlights some of the significant challenges and large
hydrogen and ammonia, the lack of clear standards and uncertainties that apply to current plans for large-scale
an internationally recognized certification system remains hydrogen development. It also suggests several priority
an important barrier to investment in nascent hydrogen
areas for further study, for example:
markets. A robust hydrogen certification system should
be based on rigorous analysis of lifecycle greenhouse gas ■ Developing a better understanding of ‘last-mile’ costs to
emissions across the entire value chain, including fugitive deliver hydrogen to end users.
upstream methane emissions for hydrogen production ■ Exploring potential uses of uncracked ammonia in
from natural gas and manufacturing and construction industry to further reduce costs.
emissions associated with primary energy inputs to the
■ Evaluating the climate impacts of ammonia, going beyond
hydrogen production process. Analysis across the entire
economic costs.
hydrogen value chain and clarity about certification
standards and requirements are crucial to create market ■ Understanding competing demands for ammonia from the
confidence and minimize investment risks. Providing this agricultural industry.
clarity is an opportunity for EU policymakers and Member
■ Exploring the potential to use imported LNG for low-
States to help drive the emergence of a global market
carbon hydrogen production closer to likely end-users.
for climate-beneficial hydrogen, foster the alignment of
This could be particularly relevant for Europe, given recent
certification systems internationally, and set the tone for
efforts to increase LNG import capacity following the
trade, thereby fostering an environment that is suitable
disruption to European gas markets in early 2022.
for realizing the projects and investments needed to meet
future European and global hydrogen demand. Further study in these and other areas would help
4. Further work is needed to identify what part of Europe’s governments and stakeholders identify the most
expected hydrogen demand could be met by uncracked important hurdles to developing cost-effective supply
ammonia and to spur development of related technologies chains for clean hydrogen; provide a clearer sense
and infrastructure. of the overall role clean hydrogen can play in future
5. Further work is needed to understand the infrastructure decarbonization efforts; and help policy makers design
needs and costs associated with building out storage and more effective strategies for incentivizing needed
distribution systems for delivering hydrogen to end users. technology and infrastructure investments.
33
Hydrogen (europa.eu)

GLOSSARY
Acronyms and Chemical Formulas
ATR auto thermal reforming
CATF Clean Air Task Force
CCS carbon capture and storage
CCfD carbon contract for difference
CfD contract for difference
CH4 methane
CO2 carbon dioxide
°C degrees celsius
DOE U.S. Department of Energy
H2 hydrogen
IEA International Energy Agency
kg kilogram
LCOH levelized cost of hydrogen
LH2 liquid hydrogen
LNG liquefied natural gas
LOHC liquid organic hydrogen carrier
MCH methylcyclohexane
MENA Middle East and North Africa
SMR steam methane reforming

APPENDIX
Levelized Cost of Hydrogen

Graphs in $/MWh
Figure 6a: Levelized Cost of Hydrogen ($/MWh H2)

Figure 7a: Levelized Cost of Hydrogen by Pipeline in U.S Dollars $ per MWh
Figure 9a: Pipeline Total Installed Cost ($ millions)

Figure 11a: Cost Breakdown for Different H2 Carriers Imported From the Arabian Gulf

Figure 12a: Levelized Cost of Hydrogen Breakdown ($/MWh H2)
250,000 Tonnes Per Year H2 Supply Chain – NH3 Carrier
Figure 13a: Cheapest Hydrogen Production Transported to Rotterdam via Pipeline ($/MWh H2)
1 Million Tonnes Per Year H2 Supply Chain (2040)
Table 3a: Cost Results for Uncracked Ammonia
Levelized Cost of H2 Delivered to Rotterdam as Uncracked Ammonia ($ per MWh)
250,000 tonnes/year 1 million tonnes/year 10 million tonnes/year
Arabian Gulf (Doha, Qatar) 68 54 42
United States (Houston) 74 60 48
Argentina (Buenos Aires) 75 62 49
Norway (Oslo) 103 90 76

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Techno-economic

Marika Tatsutani, Consultant and Technical Writer

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 2

Figure ES-1: Pathways for Importing Low-Carbon Hydrogen to Europe

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 3

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 4

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 5

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 6

2 Background & Context for Analysis............................................................. 9

3 Potential Carriers & Value Chains for a Global Hydrogen Market............ 12

7 Policy Recommendations and Areas for Further Research...................... 30

Glossary: Acronyms and Chemical Formulas.............................................. 33

Appendix: Levelized Cost of Hydrogen Graphs in $/MWh......................... 34

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 7

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 8

Background & Context

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 9

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 10

Reducing production costs for low-carbon hydrogen

Transport and storage, in particular, present challenges

Once compressed, gaseous hydrogen can be moved

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 11

Potential Carriers and Value Chains

Figure 1: Hydrogen Value Chain – Low Carbon Hydrogen Production

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 12

Figure 2: Hydrogen Value Chain – Liquid Hydrogen as a Carrier

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 13

Figure 3: Hydrogen Value Chain - Toluene / MCH as a Hydrogen Carrier

3.4 Ammonia (NH3) most ammonia production in the world, to convert

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 14

3.5 Pipeline transport of Nonetheless, the low volumetric energy density of

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 15

Figure 5: Pathways for Low-Carbon Hydrogen Imports to Europe

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 16

■ Import, including import jetty, carrier storage, and

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 17

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 18

Table 2: Assumptions and Data Sources in KBR Cost Estimates

Variable Assumption ($=U.S. dollar) Source

Skilled and unskilled Vary by location Compass International Publications

Price for clean Algeria: $43/MWh Qatar: $47/MWh IEA 2021

Average speed for 15 knots KBR internal based on industry

Qatar (Doha): 13,364 km/7,216 nautical miles (marine only)

Pipeline CAPEX Vary by location Calculated using IHS Que$tor software

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 19

5.1 Overall cost of delivered hydrogen

Figure 7 (next page) shows that Norway, because of

Figure 8 (next page) compares the least-cost export

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 20

Figure 7: Levelized Cost of Hydrogen by Pipeline in U.S Dollars ($) per kg

Figure 8: Lowest Levelized Cost of Hydrogen Across Various Supply Chains

CATF – Techno-economic Realities of Long-Distance Hydrogen Transport 21

Table 3: Hydrogen Equivalent Cost Results for Uncracked Ammonia

Levelized Cost of H2 Delivered to Rotterdam as Uncracked Ammonia ($ per kg)

250,000 tonnes/year 1 million tonnes/year 10 million tonnes/year

Arabian Gulf (Doha, Qatar) 2.3 1.8 1.4

United States (Houston) 2.5 2.0 1.6

Argentina (Buenos Aires) 2.5 2.1 1.6

Norway (Oslo) 3.4 3.0 2.5