On the cost of zero carbon hydrogen: A techno-economic analysis of steam methane reforming with carbon capture and storage

•Zero carbon blue hydrogen can be achieved economically with commercial technology.•100% fossil CO2 capture increases capital and operational costs 5% and 4%.•Permanent fugitive emission offset increases hydrogen costs by 2 to 25% in the UK.•Global warming potential metric GWP* indicates lower climate impact of methane.•Fuel switching CO2 avoidance costs range from 223 to 367 £/tCO2e (HHV). This article challenges the view that zero carbon hydrogen from steam methane reforming (SMR) is prohibitively expensive and that the cost of CO2 capture increases exponentially as residual emissions approach zero; a flawed narrative often eliminating SMR produced hydrogen as a route to net zero. We show that the capture and geological storage of 100% of the fossil CO2 produced in a SMR is achievable with commercially available post-combustion capture technology and an open art solvent. The Levelised Cost of Hydrogen (LCOH) of 69£/MWhth HHV (2.7£/kg) for UK production remains competitive to other forms of low carbon hydrogen, but retains a hydrogen lifecycle carbon intensity of 5 gCO2e/MJ (LHV) due to natural gas supply chain and embodied greenhouse gas (GHG) emissions. Compensating for the remaining lifecycle GHG emissions via Direct Air Capture with geological CO2 Storage (DACCS) increases the LCOH to 71–86 £/MWhth HHV (+3–25%) for a cost estimate of 100–1000 £/tCO2 for DACCS and the 2022 UK natural gas supply chain methane emission rates. Finally, we put in perspective the cost of CO2 avoidance of fuel switching from natural gas to hydrogen with long term price estimates for natural gas use and DACCS, and hydrogen produced from electrolysis. CO2 intensity of H2 production vs LCOH for a UK case (1.04% natural gas supply chain emissions and Direct Air Capture at 100 - 1000£/tCO2). [Display omitted]