THP-E37: Is The UK’s New Hydrogen Strategy Ambitious Enough? 10 Points To Discuss. Also, Big Oil Is Waking Up To Hydrogen And Making Deals Quickly

August 12, 2021 • Paul Rodden • Season: 2021 • Episode: 37

Welcome to The Hydrogen Podcast!

In episode 037 , An overview of the upcoming UK hydrogen strategy, Chevron and Cummins announcing a new strategic collaboration on hydrogen. And Petronos is eyeing blue ammonia as a way to ship hydrogen from Alberta to Asia. All of this on today’s hydrogen podcast.

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An overview of the upcoming UK hydrogen strategy, Chevron and Cummins announcing a new strategic collaboration on hydrogen. And Petronas is eyeing blue ammonia as a way to ship hydrogen from Alberta to Asia. All of this on today’s hydrogen podcast.

So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.

The Financial Times has reported that the United Kingdom’s highly anticipated and delayed hydrogen strategy is due to be published the first week of August. The strategy should offer clarity as to the specific policies that will be put in place to support the country’s goal of driving growth and low carbon hydrogen production and utilization. This coming in an article from JD Supra. Back in November of 2020 Boris Johnson outlined the UK 10 point plan for green Industrial Revolution, proposing one gigawatt of low carbon hydrogen production capacity by 2025 and five gigawatts by 2030. To add to this, the government intends to increase hydrogen blending in the gas distribution network to 20% to reduce reliance on natural gas, as well as to create the first hydrogen neighborhood in which all residential heating and cooking will be powered by hydrogen.

The UK’s energy white paper published in December of 2020 emphasize the need for significant investment in a carbon capture and storage infrastructure in order to promote the production of low carbon blue hydrogen. Moreover, while the white paper listed decarbonizing gas supply for heating, as a key strategy priority, it recognized the need for further testing to establish the feasibility of hydrogen blending in the gas distribution network on a large scale. Business support for hydrogen continues to grow as evidenced by the hydrogen strategy NOW campaign, which stands ready to invest 3 billion pounds in hydrogen projects in the UK.

That said regulatory support will be needed to generate significant investment and hydrogen projects across the country. So what can we expect from the UK hydrogen strategy? Well, market expectations are that the UK hydrogen strategy will cover some if not all of the points that I’m about to cover, as well as addressing some key criticisms and concerns raised about hydrogen. Point number 1: According to a survey conducted by the hydrogen strategy now over three quarters of respondents claim that the UK is five gigawatt target by 2030 was not ambitious enough. Based on these results, it seems likely that the market will embrace a more ambitious target for hydrogen production by 2030. Point 2: A roadmap to decarbonizing hydrogen with clarification on the efforts to promote the financial support for both renewable hydrogen and low carbon hydrogen and consideration on the feasibility of producing renewable hydrogen at scale due to the need for associated renewable electricity generation capacity.

Point number 3: a regulatory framework including whether hydrogen will continue to be regulated under the gas act and through off gem or whether a hydrogen regulation and authority will be created. Importantly, any regulatory framework should provide clarity regarding the strategy for injection of hydrogen and gas distribution networks. Point 4: Policies to boost hydrogen demand, such as minimum quotas in specific end use sectors. Point 5: Focusing on decarbonizing residential heating and cooking through decarbonizing the gas distribution network by blending greater quantities of hydrogen with natural gas.

Point 6: Sources of funding including governmental support schemes and grants for both research and development and projects as well as the development of a hydrogen focus subsidy program. Similar to the contract for difference to help incentivize the scaling up of low carbon hydrogen production and clarification on how this might impact household bills. Point 7: Regional hubs akin to the regional clean hydrogen hubs identified in Senator Joe Manchin’s recent hydrogen bill in the US and lastly Point 8: Efforts to promote the UK as a key hydrogen market globally. So what are the next steps? Well, now we just have to sit back and wait and look at any developments or comments that come along the topic.

When the development strategy does get released, it’s going to be interesting to compare and contrast their hydrogen strategy with that of the US and the rest of Europe. Next, Chevron and Cummins announcing a strategic collaboration on hydrogen. In a press release by Chevron, The two companies announced a memorandum of understanding to explore strategic alliance to develop commercially viable business opportunities in hydrogen and other alternative energy sources. The MOU provides the framework for Chevron and Cummins to initially collaborate on four main objectives, advancing the public policy that promotes hydrogen as a decarbonizing solution for transportation and industry, building market demand for commercial vehicles and industrial applications powered by hydrogen, developing infrastructure to support the use of hydrogen for industry and fuel cell vehicles and exploring opportunities to leverage Cummins electrolyzer and fuel cell technologies at one or more of Chevron’s domestic refineries.

In a quote from Andy Walz, the president of Chevron’s America’s fuels and lubricants, Chevron is committed to developing and delivering affordable, reliable, ever cleaner energy. And collaborating with Cummins is a positive step toward our goal of building a large scale business in a lower carbon area that is a compliment to our current offerings. Hydrogen is just one lower carbon solution we’re investing in that will position our customers to reduce the carbon intensity of their business and everyday lives. We’ve also invested in developing and supplying renewable natural gas, blending renewables into our fuels, co processing bio feedstocks in our refineries, and abatement projects that will reduce the carbon intensity of our operations.

And according to Amy Davis, Vice President and President of new power at Cummins, working with Chevron to advance hydrogen technology and accelerate ecosystem development helps us continue our goal and enabling a carbon neutral world. The energy transition is happening and we recognize the critical role hydrogen will play in our energy mix. We’ve deployed more than 2000 fuel cells and 600 electrolyzers around the world and are exploring other hydrogen alternatives including a hydrogen fueled internal combustion engine as we continue to accelerate and harness hydrogens powerful potential. And lastly, in an article from the, PETRONAS adds blue ammonia as a way to ship hydrogen from Alberta to Asia.

PETRONAS, Canada is teaming up with Japan based Itochu Corporation to explore the feasibility of building a new $1.3 billion facility just outside Edmonton that would produce low carbon ammonia, a source of hydrogen fuel for export to Asian markets. The two companies are betting that the project will capitalize on a global surge of interest in hydrogen, an alternative fuel that emits no greenhouse gases when burn, but as a challenge to transport. As more countries set net zero carbon emission goals, they’re increasingly seeking environmentally friendly sources of hydrogen. Itochu and PETRONAS. Canada, the Canadian arm of the Malaysian oil and gas firm are now in the process of studying costs and transportation options to determine if the project is financially viable. If it goes ahead, the companies say construction would start in 2023 and the plant would come online in 2027. The facility would draw natural gas from Petronas’s Montney Basin assets and combine it with nitrogen to produce ammonia.

This process produces significant amounts of byproduct carbon dioxide, but by capturing and storing the carbon dioxide before it can be emitted into the atmosphere, the plant would produce what is known as blue ammonia. That is ammonia that would reduce climate impact. Ammonia is easier to transport them pure hydrogen when it reaches its destination, it can be chemically split, allowing its hydrogen atoms to be used for fuel. Mark Fitzgerald, the President and CEO of PETRONAS Canada said he believes the project can help the Canadian natural gas industry gain a reputation as a global feedstock for hydrogen production.

Quote, I think it’s going to be a great example of the opportunity for Canada to play a leading role in the progression of the world to a low carbon economy. Itochu belongs to a group of more than 30 industry players that are partnered to study ammonia as an alternative to marine fuel. By examining issues such as safety, fuel specifications, net carbon dioxide emissions, the group aims to establish a global ammonia supply chain and develop ships that use ammonia fuels. Petronas and Itochu are eyeing blue ammonia for use in thermal power generation in Japan to replace hydrocarbon based fuels for power plants and for use in steel and chemical production. The Japanese government aims to secure 30 million tons of ammonia by 2050 as part of its efforts to achieve net zero emissions. Mr. Fitzgerald also said the Edmonton area project would have several competitive advantages. Those include the ability to leverage abundant natural gas stocks in the region. And the fact that the sailing time from the west coast of Canada to Japan is shorter than it would be from North American ports that could supply blue ammonia.

Another potential advantage is the existing local policy support for such projects including provincial and federal hydrogen strategies that encourage industry development, the project would fit neatly into Alberta’s chemical Incentive Program, which grants companies 12% of their eligible capital costs once a new petrochemical facility is up and running. Petrochemicals are derived from petroleum or natural gas feedstocks, such as ethane, methane and propane. Alberta is Canada’s largest producer of those and the provincial government wouldn’t say whether PETRONAS has applied for the grant, Nor would Mr. Fitzgerald.

PETRONAS estimates that the project could create about 10,000 direct and indirect jobs during construction and 3300 when it’s up and running. According to Dale Nally, Alberta’s Associate Minister of natural gas and electricity sent in an email that this is an incredible opportunity for all as natural resources to reach new markets, and further display the innovation that powers a dynamic energy sector, successive Alberta governments have pushed for more petrochemical development in the province to help diversify its economy. Citing the local abundance of low cost natural feedstock, the Provincial Crown Corporation Invest Alberta names petrochemicals as a key focus sector. So now, a very interesting collaboration between Malaysia, Japan and Canada, very much looking to see how this develops and whether or not they decide if blue ammonia is the way to go for transporting hydrogen.

Alright, that’s it from everyone. If you have any questions, comments or concerns about today’s podcast, stop by my website at and let me know. I would really love to hear from you. And as always, take care. Stay safe. I’ll talk to you later.

Hey, this is Paul. I hope you liked this podcast. If you did want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at Thanks for listening. I very much appreciate it. Have a great day.

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