Turquoise Hydrogen Producers Could Capture Flourishing Graphite Market

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While overmuch of nan limelight is connected bluish aliases greenish hydrogen produced from earthy state and renewable power respectively, astir a twelve power and exertion companies are softly moving to nutrient turquoise hydrogen whose byproduct could beryllium captious to nan electrical conveyance market.

Turquoise, for illustration bluish hydrogen, relies connected earthy gas, but it uses a accumulation pathway called methane pyrolysis.

Pyrolysis takes nan earthy gas—methane—molecule (CH4) and splits it into hydrogen and coagulated carbon.

The consequence is achromatic gold, c powder that tin beryllium transformed into synthetic graphite, an progressively lucrative captious mineral recovered successful each azygous EV artillery successful nan world.

“We each cognize nan trajectory of lithium, and there’s much graphite successful nan artillery than lithium,” said Nathan Ashcroft, Director for Hydrogen Solutions astatine Stantec, a creation and engineering institution based successful Edmonton, Alberta.

“Aligning early industries pinch electrical batteries and lithium, specified arsenic synthetic graphite and precocious worth carbon, that’s wherever you really want to go,” Ashcroft said.

Besides, processing hydrogen from methane pyrolysis is much efficient, he added.

Ashcroft said he’s been studying and lecturing astir nan virtues of pyrolysis for years. “Green hydrogen and bluish hydrogen are highly h2o intensive; it takes astir 10 kilograms of h2o to nutrient 1 kilogram of bluish aliases greenish hydrogen,” he said.

Water-stressed areas successful nan U.S, nan godforsaken Southwest, nan Permian Basin, aliases parts of nan world wherever there’s an abundance of earthy state and infrastructure but h2o is scarce, “those are nan places that will beryllium absorbing for methane pyrolysis successful nan future,” Ashcroft said.

“Japan, Korea and China person jumped connected this, and they person rather a spot of momentum successful Asia astir earthy state pyrolysis processes,” Ashcroft said. “It’s not going to beryllium easy, but there’s worth to beryllium had successful nan c equation.”

The U.S. relies connected graphite but does not nutrient any, earthy aliases synthetic.

In 2021, 95 U.S. companies consumed 45,000 tons of earthy graphite weighted astatine $41 million, an summation of 41% successful 1 year, according to nan U.S. Geological Survey (USGS), nan Interior Department’s subject and statistical arm. Most of that came from China.

Meanwhile, 1 azygous ample lithium-ion EV artillery works could require 35,200 tons/year of graphite for its anode worldly successful nan artillery packs, according to USGS.

The artillery waits to beryllium installed connected nan framework of Ford Motor Co. artillery powered F-150 Lightning ... [+] trucks nether accumulation astatine their Rouge Electric Vehicle Center successful Dearborn, Michigan connected September 20, 2022. - Construction crews are backmost astatine Dearborn, remaking Ford's century-old business analyzable erstwhile again, this clip for a post-petroleum era that is yet opening to consciousness possible. The manufacturing operation's premier ngo successful caller times has been to combine nan best-selling F-150, a gasoline-powered conveyance (Photo by JEFF KOWALSKY / AFP) (Photo by JEFF KOWALSKY/AFP via Getty Images)

AFP via Getty Images

Natural graphite is cheaper to mine—$4,000 to $7,000 per ton. Synthetic graphite is upwards of $9,000 per ton. Graphite represents astir 10% of nan full costs of nan cell.

“We’re going to spot immense maturation for graphite successful North America each driven by nan artillery compartment manufacturers who are chiefly building for nan car sector, but besides nan power retention sector,” said Novonix CEO, Chris Burns, PhD.

Australia-based Novonix is simply a artillery materials and exertion institution readying to unfastened nan first U.S. commercialized artillery people graphite installation by nan extremity of 2024 successful Chattanooga, Tennessee.

The institution received $150 cardinal assistance from nan U.S. Energy Department successful October 2022 toward its $1 cardinal plant.

The China Factor

As nan U.S. awaits its first synthetic graphite accumulation plant, China still owns astir of nan world’s graphite.

MASHAN, CHINA - MAY 28 A graphite worker walks crossed nan Jin nan graphite mill successful nan municipality of ... [+] Mashan, China connected May 28, 2016. Workers opportunity they person very small information instrumentality astatine galore of nan graphite factories. The northeastern state of Heilongjiang is rich | successful graphite and location are galore mines and factories successful nan region. Locals who unrecorded successful proximity to nan factories kick of contaminated aerial and h2o affecting their crops and health. The graphite is simply a cardinal constituent successful lithium batteries for mobile phones and electrical cars. (Michael Robinson Chavez/The Washington Post via Getty Images)

The Washington Post via Getty Images

China produces astir 80% of full world output according to USGS. North America—Canada and Mexico—produces only 1.2% of world graphite.

That’s dwarfed by supplies coming retired of nan world’s apical 5 producers—China, Brazil, Mozambique, Russia, and Madagascar.

“Every artillery successful each car successful almost everything that’s applicable that we’re talking astir today, vehicles, power storage, user electronics, almost each person graphite,” Burns said. “If you look astatine either earthy aliases synthetic graphite, there’s only a fistful of companies talking astir trying to build present successful North America.”

There will beryllium much than 1 cardinal tons/year of graphite request by 2030 successful North America alone, he said.

Meanwhile, “China controls nan market,” Burns said. “They tin power aliases throttle nan maturation extracurricular of nan Asian marketplace if they power nan upstream material,” he added.

“This hostility betwixt China and nan U.S. is not going to lead to a unchangeable proviso chain,” Burns said.

A man useful successful a shop of a graphite institution successful Jixi City, northeast China's Heilongjiang ... [+] Province, March 24, 2023. Based connected nan advantages of graphite resources and reserves, nan metropolis has integrated and upgraded nan proviso concatenation for a high-end, intelligent and greenish industry. (Photo by Zhang Tao/Xinhua via Getty Images)

Xinhua News Agency via Getty Images

On October 19, China’s Ministry of Commerce announced caller export controls connected artillery people graphite. Beginning December 1, U.S. companies will beryllium required to use for permits to person synthetic and earthy graphite from China, which has two-thirds of nan world’s earthy graphite supply.

U.S. companies already person nan Section 301 tariff, a 25% tariff connected incoming graphite from China, which will reappraisal nan waiver hold successful December.

Novonix will nutrient synthetic graphite globally.

For its Tennessee plant, Novonix will reconstruct petroleum coke from its largest shareholder, Phillips 66, into artillery fresh powder for compartment manufacturers including LG Energy Solution, Panasonic, and Samsung SDI.

“When we bargain petroleum-based coke products, we are almost upcycling those products into a cleaner ecosystem. If those were not distilled each nan measurement down to nan coking level, they would apt beryllium sold disconnected arsenic substance people cokes aliases bunker lipid for electricity,” Burns said.

Novonix said it could yet move to replacement feedstock, specified arsenic coagulated c from pyrolysis aliases biomass to little costs aliases c strength of graphite, arsenic a feedstock.

“The speech is inherently complex. Would it beryllium cleaner to spell done pyrolysis to get that coagulated carbon, I presume nan nett consequence of nan reply would beryllium yes,” he said.

A Slim but Expanding Market

Fewer than a twelve mini companies astir nan world are testing methane pyrolysis to nutrient turquoise hydrogen, but they person attracted millions of dollars from dozens of power companies, including immoderate majors, complete nan past 2 years.

The global hydrogen marketplace is weighted astatine astir $170 cardinal this year, but it’s expected to grow to much than $300 cardinal by 2030 according to Grandview Research.

The $15 cardinal turquoise hydrogen marketplace unsocial is expected to turn to $144 cardinal by 2030 erstwhile galore power companies and authorities person pledged to spell net-zero aliases meet world ambiance goals.

There’s only 1 commercial pyrolysis plant successful nan U.S., Monolith Nebraska LLC’s Olive Creek installation successful Hallam, Nebraska. DOE guaranteed astir $1 cardinal successful loans for nan installation which produces and sells hydrogen to make ammonia for agriculture. U.S. tyre giants Michelin and Goodyear bargain nan c achromatic byproduct.

Santa Monica, California-based C-Zero plans to beryllium adjacent and much efficient.

“What’s unsocial pinch our attack is not utilizing ample quantities of electricity, and we nutrient a small spot of water,” said Zach Jones, C-Zero’s main executive and cofounder.

Blue and greenish hydrogen require h2o for accumulation and greenish requires much power to divided nan molecule.

“Thermodynamically it takes 7 and a half times little power to propulsion hydrogen disconnected of c than it does to propulsion hydrogen disconnected of oxygen,” Jones said. “We devour immoderate of nan merchandise hydrogen we nutrient to thrust nan guidance guardant truthful nan only power root you request to deploy our exertion is earthy gas, either a pipeline aliases a tanker afloat of LNG disconnected nan seashore of Korea aliases Japan.”

C-Zero is focused connected Korea, Japan, Southeast Asia, but besides higher latitudes successful North America and Europe.

“If it doesn’t activity successful Asia, it isn’t going to activity anywhere. They don’t person anyplace to sequester CO2. The renewable capacity facet is not very good, and they person a beardown societal will to salary a premium to decarbonize. That’s going to beryllium nan first marketplace for this,” Jones said.

Since launching successful 2018, C-Zero has attracted finance from Breakthrough Energy Ventures, Eni Next, Mitsubishi Heavy Industries, AP Ventures, SK Gas, Engie New Ventures, and Trafigura.

DOE’s Office of Energy Efficiency and Renewable Energy’s Hydrogen and Fuel Cell Technologies Office awarded C-Zero $1 million successful January 2020.

While nan company’s aviator will beryllium afloat commissioned by nan first 4th of 2024 and tally done nan year, Jones said he should besides cognize wherever nan institution plans to put its first commercialized pyrolysis installation by nan 2nd 4th of 2024.

He said he’d for illustration to waste nan commercialized cognition to “any entity that is progressive successful nan earthy state worth chain, producer, distributor, user pinch a large equilibrium expanse and a history of processing chemic processes, a institution who tin thief pinch engineering and scaleup.”

There are still hurdles to pyrolysis.

“The situation that immoderate methane pyrolysis process has is you’re throwing distant half nan power successful nan earthy state successful nan shape of coagulated carbon,” Jones said.

Translation: It takes doubly arsenic overmuch earthy state to nutrient nan aforesaid magnitude of energy.

“If you person really soiled upstream methane emissions and you’re moving those into a process wherever you request doubly arsenic overmuch earthy gas, those upstream methane emissions tin wound you twice, whereas they only wound bluish hydrogen once,” Jones said.

Jones said his dream is that earthy state is going to beryllium cleaned up from an upstream methane emanation perspective.

“It’s not a glamourous process. You’re still connected to fossil fuels. You’ve sewage elephantine piles of c you person to put backmost successful nan ground. You’re throwing distant half nan power of earthy gas, truthful it doesn’t really fresh into anybody’s saccharine spot. It doesn’t look awesome from a PR perspective,” Jones said.

It’s why start-up exertion companies alternatively than lipid and state fields are driving pyrolysis, he said.

“We consciousness for illustration we’re successful nan correct spot astatine nan correct clip pinch nan correct idea,” Jones said.

American Petroleum Institute’s vice president of Natural Gas Markets, Rob Jennings, said “approximately 30 API personnel companies person invested successful hydrogen technologies on nan full worth chain.”

Those who are progressive successful pyrolysis are mostly keeping a debased profile.

ExxonMobil is testing nan commercialized viability of methane pyrolysis successful Korea and plans to unveil a objection task wrong a twelvemonth according to respective sources acquainted pinch that project. Beyond that, crickets.

“The c descend world is alien to U.S. majors, whereas successful Asia, they are “integrated value-driven companies and exertion driven companies,” Ashcroft said.

“Monetizing c for ExxonMobil, Chevron, others, that’s ne'er going to go portion of their halfway business,” he added. “I don’t expect ExxonMobil to spell into nan synthetic graphite refining industry, but they will make a handsome magnitude of money from trading this feedstock.”

Hydrogen + EVs = Biden’s Energy Policy

While hydrogen accumulation and electrical conveyance description are cardinal to President Biden’s power policy, nan administration, which is infusing billions of dollars into both, is not linking nan two.

US President Joe Biden drives nan caller electrical Ford F-150 Lightning astatine nan Ford Dearborn Development ... [+] Center successful Dearborn, Michigan connected May 18, 2021. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)

AFP via Getty Images

This month, nan White House and nan Department of Energy announced $7 cardinal to beforehand 7 U.S. Regional Clean Hydrogen Hubs (H2Hubs) to “accelerate nan commercial-scale deployment of low-cost, cleanable hydrogen.”

About two-thirds of nan money will beforehand greenish hydrogen projects, those produced from renewable energy. The different 3rd will beryllium bluish hydrogen projects utilizing a process called steam methane reforming which splits nan molecule into hydrogen and c dioxide state and sequesters nan CO2 underground.

No mention of methane pyrolysis successful President Biden’s announcement.

The Department of Energy told Forbes that it has not yet wished whether methane pyrolysis is “clean.”

It must first analyse nan lifecycle emissions “well-to-gate” of methane pyrolysis, which is ongoing arsenic nan Treasury Department prepares to rumor regulations astir really it will dole retired hydrogen accumulation incentives outlined successful nan celebrated Inflation Reduction Act.

DOE factors successful upstream emissions from nan feedstock, which successful this case, is earthy gas. It examines emissions astatine nan accumulation installation itself.

“Therefore, nan mobility of whether H2 produced from methane pyrolysis is considered ‘clean’ will dangle connected nan imaginable emissions from different parts of nan lifecycle,” DOE said.

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