We started using hydrogen as fuel long before the World War II. A German emigrant in the USA patented using hydrogen as fuel for cars for the first time. Japan took practical steps in the field in the 1960s. the newspapers at the time even wrote about Japan having cars that ran on water. The idea did not become universally popular, however.

Ilham Shabanov, energy expert, head of Caspian Barrel Oil Research Centre says although hydrogen is abundant, it is usually a component of other matters. ‘It must first be extracted, for example from water or natural gas, before consumption. Electrolysis breaks down water molecules, generating two atoms of hydrogen and releasing the oxygen into the air.

Electrolysis requires electricity, which, if produced from solar or wind power, has no negative impact on the environment. This hydrogen is termed green .

The natural gas molecule contains 4 hydrogen atoms, like suggested in its formula (CH4). But hydrogen generation from natural gas also produces carbon. The carbon is not released but stored in special storage. There are even proposals to store it in oil wells. Such hydrogen is classified as blue . If the carbon, produced in the process, is released into the air, the hydrogen also ‘discolours’, that is we generate grey hydrogen .

There are also pink and red types of energy, generated through nuclear power. I would like to add a sidenote. When we started using atom for peaceful purposes in 1954, it was believed that the world would completely switch to nuclear energy in 20 years. Yet, it didn’t happen. Currently, it only accounts for 9% in the global energy market.

While producing hydrogen from natural gas (methane), it must first be processed to break down the ‘heavy’ gases in its composition, such as ethane, propane, and butane. It requires specialized plants and energy. Methane-powered blue hydrogen is considered the optimal option. The International Energy Agency estimates that green energy is exactly 5 times more expensive than wind power.’

- What opportunities does Azerbaijan’s water and gas potential create to produce hydrogen energy?

‘The consumption of traditional energy must end by 2050 in developed countries and their emerging markets. The EU has banned the production of internal combustion engine cars as of 2035.

The oil era in Azerbaijan is coming to a natural end. We have produced 2.2 billion tons of oil since the mid-19th century. I believe, the commercially acceptable volumes will have been extracted from Azeri-Chirag-Gunashli, the foundation of our oil industry, by 2049 . In 2010, President of Azerbaijan Ilham Aliyev announced that the 21st century was the century of gas for us, meaning our industry, economy and energy are all based on gas.

As the attitude towards traditional energy shifted in world markets in 2020, the states at COP28 international climate change conference in Dubai in 2023 decided to end the consumption of traditional energy within 25 years to prevent the rapid climate change.

What must Azerbaijan do in this regard? We have a 100 years’ worth of gas reserves , and we can sell this gas on those markets until the ban is imposed in 2050. 50% of our gas is currently sold on European markets. The volume will increase to 60-65% by 2027. Afterwards, we can market the electricity generated from green energy. The European Commission decided in 2023 that they will be applying environmental tax on energy obtained from traditional energy carriers from 2026.

We have plans and the potential to export 5 gigawatts of green energy. We have generated around 550 million kilowatt/hour of electricity per year at Garadagh solar power plant alone. This production will increase exponentially until up to 2028.

In the early years of independence, we had to burn our gas to convert it into electricity. Thermal power plants accounted for 93-94% of electricity we produced. The number has dropped to 85%. This will further decrease to 50% in the following three years. Right now, we sell the gas, and, while burning it, receive fertilizer and methanol as cleaner fuel, which we use as a semi-finished product in the chemical industry. We can diversify our export potential, generating green hydrogen and green electricity through hydro, wind and solar energy.

The green energy memorandums signed by either SOCAR or the Ministry of Energy of Azerbaijan with both governments and companies envisage the production, transportation and consumption as a final product of hydrogen as alternative fuel.

I believe hydrogen has limited scope of proving itself as an alternative fuel globally by 2035. Funding remains the main issue. The EU alone has spent 7 billion euros to research the field between 2020 and 2030.’

- Will we be transporting hydrogen like we do natural gas?

‘Hydrogen cannot be transported as natural gas, because its molecules are much smaller than those of natural gas. Therefore, they can leak in the pipeline joints, which translates to colossal losses . If we add 20% hydrogen to natural gas, thus changing its composition, we can turn it into an ecologically cleaner fuel. Be that as it may, transporting hydrogen alone through existing pipelines is not commercially viable.

Germany, taking up the initiative in Europe, is allocating large funds to build hydrogen infrastructure. Norway boasts great quantities of gas but does not consume it locally. They are converting gas into electricity using alternative energy sources. Norway has all the favourable conditions to produce both green and blue hydrogen, generated from gas, and transport it to the mainland through a pipeline. It requires pipes of a special chemical composition, much more expensive than the current ones. They are also considering the option of transporting hydrogen in tankers rather than through pipelines. Another option is to transport it in vehicles.

Some are proposing transferring liquid hydrogen through pipelines, which requires cooling it down to -253 degrees. They must build a refrigerator-thermos of sorts around the line, because liquid hydrogen can become a dangerous substance.

The shareholders of the Trans Adriatic Pipeline have already announced that the TAP infrastructure will be adapted to hydrogen. Naturally, they won’t be doing it fully, yet to a certain extent if it remains commercially feasible.’

- What are Azerbaijan’s chances of gaining a spot in the European hydrogen market?

‘We are currently at a learning stage. We have signed the first document in the field. But we won’t be able to learn from the practices of advanced countries, because no such experience exists yet. We have started to keep pace with the world, constantly keeping an eye on the market.

We might not even have to turn to Europe, because we can convert natural gas into fuels and various products with a low carbon footprint, thus exporting it to petrochemical powers. We have, for example, a rather large market in Türkiye. We don’t even need a pipeline infrastructure for this. It only needs a certain amount of time.

Secondly, we need stability in and around the country to safely move large volumes of goods in the East-West and North-South directions. I believe that Azerbaijani citizens will never have to wonder ‘Oil has run out, what are we going to do?’ anymore. Yes, the oil is indeed running out but there are other types of energy with much more diversified markets.’

Sahil Isgandarov

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