Chevron bets on ‘green’ hydrogen

In Richmond, California, a city plagued by the carbon dioxide, soot and methane emitted by a massive oil refinery owned by Chevron Corp., a startup is building a waste-to-green hydrogen conversion project designed to produce zero-carbon hydrogen for transportation applications. If it succeeds, the facility will reduce the city’s methane emissions, help waste haulers meet laws on diverting green waste and supply gas stations, including Chevron’s, with fuel for hydrogen fuel cell vehicles.

It will also further the quest to produce hydrogen without fossil fuels or fresh water. Its largest investor: Chevron. 

Startup Raven SR uses a patented steam and chemical reductive process to convert biogenic waste and landfill gas into transportation grade hydrogen. It’s building the facility next to a massive county landfill and transfer station where waste company Republic Services Inc. sorts and processes recyclables and turns green waste to compost. Raven SR plans to use 70 to 90 tons of that green waste a day to produce what it estimates will be about 2,000 metric tons of renewable hydrogen a year.

Raven SR claims it will be the first hydrogen producer in the world to actually reduce greenhouse gases. “We are not only eliminating something that creates methane emissions,” Matt Murdock, CEO of Raven SR, told Trellis. “We then produce a carbon-negative hydrogen.”

With the Raven SR project, “we (are) positioned to commercialize a first-of-its-kind lower carbon hydrogen project,” said Austin Knight, vice president for hydrogen for Chevron New Energies.

Government incentives fuel a business plan

Expected to be completed in 2025, the project will cost around $75 million, Raven SR says — a relatively low cost for a first-of-its-kind energy project.

The Inflation Reduction Act’s tax credit of $3 per kilogram of hydrogen produced will help drive the price of its hydrogen to be competitive with other fuels, the project developers say. And California regulations, including the Low Carbon Fuel Standard for transportation fuels and Clean Trucks laws requiring trucking fleets to begin introducing zero-emissions trucks, provide incentives to both investors and potential customers.

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Republic Services, the second largest waste company in the nation, is providing space to Raven SR for free in exchange for the removal of 75 to 90 tons of green waste from Republic’s landfill per day — helping meet California’s law requiring diversion or reduction of organic waste stored in landfills. Once operating, the facility will eliminate up to 7,200 metric tons of greenhouse gas emissions a year, the company says.

Raven SR’s second-biggest investor, Hyzon Motors, a manufacturer of hydrogen fuel cell trucks, has an off-take agreement with Raven SR to use its green hydrogen to fuel Hyzon’s fleets in Northern California.

And Chevron, which has a 50 percent stake in the Richmond project, has rights to half of its production for sale through its gas stations and fuel distribution networks to power hydrogen fuel cell vehicles

“You couldn’t do a green hydrogen project like this in Florida or in Texas,” Murdock said, noting that California “puts a value on low carbon.” 

Demand for zero-carbon trucks

Only a handful of states mandate green waste collection and diversion. While many have followed California’s low-carbon fuel standards on carbon intensity of fuels sold and its clean truck requirements, not all states have. In January, California began requiring large trucking companies, government fleet operators and companies performing drayage at seaports and railways to begin acquiring zero-carbon trucks. 

Murdock plans to wean the company off government subsidies. “We will be producing hydrogen that’s below $5 a kilo to start and envision sliding that down as more projects come online,” to $2 a kilo, he said. At that price, “we are going to be competitive with the petroleum industry.” 

Selling Raven SR’s green hydrogen will enable Chevron, which is headquartered in San Ramon and has 1,863 gas stations in California, to meet market demand for zero-carbon fuel for trucking and abide by the Low Carbon Fuel Standard. The project will also help Chevron progress on its pledge to make low-carbon intensity products, even as it increases oil and gas production. It could also help the company build some goodwill in Richmond, where residents have suffered high rates of asthma, cancer and heart disease.   

“The City of Richmond is excited to begin this journey into the future of green technology, a green economy, a green workforce, and a greener world,” said Richmond Mayor Eduardo Martinez in a press release announcing city approval of the project.

Chevon has set aside a New Energies portfolio of $10 billion through 2028 on a variety of lower-carbon capital projects. That’s about $1.4 billion a year, or 8 percent of its annual capital expenditures. Along with hydrogen, that portfolio includes carbon capture and sequestration, renewable fuels, carbon offsets and emerging technologies. Chevon says its distribution and sales channels are ready to supply and sell hydrogen.  

A comeback for hydrogen

Hydrogen has long been touted as a potential low-carbon power and transportation fuel source, especially for heavy duty vehicles that are unsuitable for batteries, and as a power source in hard to abate industries. Hydrogen fuel cell vehicles were popular a few years ago as an alternative to combustion engine vehicles, but faded from consumer interest as electric vehicles became the less expensive and cleaner low-carbon car of choice. While hydrogen burns clean, the conventional way of producing hydrogen uses natural gas as a feedstock. Recently, a host of ventures to produce “green” hydrogen emerged to rid the process of natural gas and changed its prospects. 

The International Energy Agency says yearly production of low-emission hydrogen could reach 38 metric tons by 2030, based on projects that have been announced.

Pure hydrogen is also highly volatile and flammable. Raven SR plans to sell its hydrogen only locally, in Northern California, via trucks. In proceedings for approval from the city of Richmond, Communities for a Better Environment and the Natural Resources Defense Council objected that not enough information on potential environmental and health impacts of the project was provided. Raven SR then provided a health risk assessment on the project, addressing potential air quality impacts. Communities for a Better Environment asked the city of Richmond to undertake a formal environmental impact review, but city officials chose to require more information for a “mitigated negative declaration” on the project’s impacts. 

In its comments, the California Environmental Protection Agency stated that the project would reduce existing flaring of landfill gas and therefore help reduce greenhouse gas emissions.  

RavenSR’s patented technology is based on a process developed at Lawrence Livermore National Laboratory. 

“RavenSR’s novel system provides a unique opportunity to demonstrate a new hydrogen production technology that could revolutionize waste-to-hydrogen production,” wrote Livermore scientist Vi H. Rapp in a letter submitted to the city.

Murdock envisions Richmond as the first of several projects.  “We’ll learn lessons from Richmond,” he said, in order to reduce the costs of future projects. “We are going to be competitive with the petroleum industries.”