We’d like to get as much input as possible from our valuable community of experts on how to evaluate an appropriate cost target for new clean fuels. Of the options below, what, in your opinion, is the best approach to account for green fuels to achieve desired levels of market penetration and accelerated adoption in the next 5 years?
Secondly, do you agree or disagree with our estimated pricing of each option? If not please explain or suggest other options on cost not considered below.
Approach 1: FULLY CONSIDERED COST OF OIL
Calculated Price: $4.478/kg
Includes full lifecycle cost (Total Cost Assessment) + carbon cost. Please note, this number is informed by independent reviews of “real cost.” For example, instead of the common carbon tax of $40-50/ton, we’ve used $417/ton;
Sources for calculation: Litman, 2012 + Ricke et al., 2018 + BP Statistical Review of World Energy 2020
Approach 2: TIPPING POINT COST OF HYDROGEN
Calculated Price: $2/kg
- Based on Hydrogen council assessment 2021 for production at scale trajectory (2026-2030) to make green hydrogen and its derivative fuels competitive across multiple hard-to-abate sectors.
Approach 3: TIPPING POINT COMPETITIVE WITH LNGs
Calculated Price: $1 for production + up to $1.5 added in transfer
Approach 4: WHAT LNG COMPANIES WILL CONSIDER PROFITABLE
Calculated Price: $8-12 per million BTU
Edit: the calculated price has been updated from original post.