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A hydrogen industry fit for a King

Release date:
10 May 2023
Felipe Arbelaez, SVP hydrogen and CCS

World Hydrogen Summit, Rotterdam, Netherlands

Felipe Arbelaez, SVP hydrogen and CCS at the World Hydrogen Summit, Rotterdam, Netherlands


Hi everyone.

It’s great to be back at the World Hydrogen Summit.

Thank you, for the introduction.

I’m grateful for the opportunity to speak today.

I’ve come over from the UK which just had a big, historic weekend.

Celebrating a new era.

With the Coronation of His Majesty King Charles lll.

And here in Rotterdam I understand that you too recently celebrated King’s Day – Koningsdag.

Marking ten years on the throne of His Majesty King Willem-Alexander of the Netherlands.

His Majesty is a big advocate for hydrogen, and we thank him for his support.

Perhaps it’s no surprise though.

Hydrogen is, after all, the king of the elements.

Number one in the periodic table.

It is the most abundant element.

Found in faraway stars.

And essential to life back here on Earth.

Despite this, hydrogen has yet to make its eminence in today’s energy system.

And it needs to.

It has a vital role to play in cutting emissions.

Especially in sectors like cement, steelmaking, chemicals.

Which all depend on fuels that can create intense heat.  

And for heavy transport.

Trucks, ships and aircraft.

Which need fuels that can manage the load while fitting into a small space on board. 

Hydrogen is a big prize to go after.

It deserves to be given prominence.

A role that is fit for a King. 

I have a few thoughts on what is needed.

Based on what I’ve learned about hydrogen.

Where I think the industry needs to go.

And what bp is doing to support it.

What I’ve learned

The first thing I’ve learned is that our collective efforts should be initially focussed on going after industrial use of hydrogen.

Like bp is doing at our Castellón refinery in the Valencia region of Spain.

It’s there where we aim to supply fuel to hard-to-decarbonize industry and transport in the Valencian community.

And it should position the region to export green hydrogen across Europe.

It’s exactly the type of project that could likely make the most gains in reducing emissions.


Because just two or three willing companies can launch a project.

Make it investible.

And then execute it.

I’m not saying it’s simple, by the way.

But it’s much easier than, say, using hydrogen for heating homes.

Doing that may require the approval of potentially hundreds of thousands of households.

It may need construction sites in densely populated residential areas.

And the retrofitting of existing distribution networks to pipe hydrogen instead of natural gas.

That’s far more challenging in the short term, particularly for an industry trying to find its feet.

The second lesson is that there are complexities in hydrogen that are different from any other energy commodity.

For instance: how do you price it?

How do you produce, store and supply it safely?

And the third lesson is how important it is to focus on how you transport it.

Today, hydrogen is costly to ship compared with other commodities.

Oil, for example, costs roughly a dollar a barrel to ship.

At around $80 per barrel, the transportation cost is relatively low.

Liquefied natural gas costs roughly a dollar per million Btu to transport.

At around $3 per million Btu, that’s about a third of the total cost.

With hydrogen right now, the transportation costs can actually outweigh the cost to produce the fuel.

That’s because hydrogen is a less dense molecule than natural gas.

It would take around three times as many ships to transport the same amount of energy as LNG.

Right now, that means there is no economic sense in shipping hydrogen.

So, the companies that crack the code on shipping hydrogen efficiently.

And cost effectively.

Will be very well positioned for the international market.

But that will take time.

Which leads me to where I think the industry is heading.

Where hydrogen is headed

Given what we know.

My strong belief is that hydrogen will go from a local.

To regional.

To global market.

If you go local.

With an industrial project as I spoke about before.

You have a bunch of customers in a geographical location that is self-contained.

That gives you the opportunity to scale the project, with low transportation costs.

There is a simplicity about this approach that enables the execution of projects.

And that’s appealing for a growing industry.

So, I imagine we will see this approach pop up in places around the world.

When these projects become successful.

There will be a clamour to develop pipelines to other locations.

That won’t happen internationally – long distance.

But we will see regional supplies develop.

Piping hydrogen is much cheaper than shipping it.

So, we could see a situation where it is piped interstate.

From the US Gulf Coast.

To the Midwest.

To Indiana, Illinois and Ohio, for example.

That could happen using existing energy infrastructure.

Or by creating new infrastructure.

And, in time, when the regional supplies are taking off.

When the technology advances.

And hydrogen can be shipped cost effectively.

We will see a globally traded hydrogen market.

And it’s at that point in time when hydrogen can be feasibly traded internationally.

Between Australia and Japan.


From North Africa to Europe.

Across the Commonwealth. as we’re talking Royal Families.

I’m excited by the prospect of this phased approach of local to regional to global.

It is logical.


And within our reach. 

And it is for precisely these reasons that bp is focusing its efforts on this approach.

bp’s plans for hydrogen

And we are doing so in several ways.

Initially, we plan to supply our own refineries.

Before ramping up production to turn these into regional hubs.

These hubs will provide low-carbon energy solutions for customers.

Particularly in the hard-to-abate sectors where hydrogen can have most impact, as we’ve discussed.

An example of us working locally is right here.

Where we are teaming up with Dutch firm HYCC, here in the Port of Rotterdam.

Planning to develop this city’s largest green hydrogen project.

And with the H-vision project to explore large-scale blue hydrogen production in the port.

Back in the UK.

We are developing a low-carbon hydrogen hub.

One that could supply 10% of the UK government’s ambition for 10GW of hydrogen by 2030.

As this takes shape.

And as markets evolve.

We plan to invest in building global export hubs for hydrogen.

And for hydrogen derivatives such ammonia.

Like we are doing as lead operator of the Australian Renewable Energy Hub.

Where we plan to combine solar.

And onshore wind power.

With hydrogen.

Creating one of the world’s largest renewables and hydrogen hubs.

Producing power for domestic use.

And eventually exporting it to international markets.

That’s what we are doing at bp.

And by 2030, we aim to produce between 0.5 and 0.7 million tonnes a year.

We’re doing that because we believe hydrogen is worth pursuing.

Particularly in cutting emissions in the hard-to-abate sectors I talked about.

And by 2050.

We believe hydrogen’s share in global energy demand could be almost the equivalent to what natural gas has today.

That’s considerable when you think how central natural gas has become to everyday life.


So, to summarise.

I’ve learned a great deal about hydrogen.

It’s complexities.

What to focus on first.

The long-term goal for an international market.

And how to get there.

From local.

To regional.

To global.

And how bp’s plans fit with this approach.

First in our refineries.

Our regional hubs.

Then our global export hubs.

But of course, none of us can do it alone.

That’s why this Summit is so important.

For sharing ideas.


And taking action.

If we work together.

We can create a hydrogen industry fit...not just for a King.

One that is fit for everyone.

Now that really would be worth celebrating.

Thank you.