Equinor ASA, the flagship producer of oil and gas giant Norway, is investing billions of dollars in blue hydrogen on a bet that it can make the fuel more cleanly than anyone else.

　　The state-controlled oil firm is among energy companies across Europe stepping up plans for hydrogen as mounting pressure to fight climate change spurs massive shifts in investment. Equinor believes it has the edge in the race to commercialize the industry because it leaks less methane than its rivals.

　　The company is focusing on blue hydrogen, which is made from natural gas and has been touted as key to cleaning up industries such as steel, cement and aviation. Yet it’s also drawn criticism, since its production releases carbon dioxide that must be captured and stored, while the process of gas extraction and transportation emits methane, an even more potent greenhouse gas.

　　“We work with catch rates of 95% CO2 capture,” Vice President of Low-Carbon Technology Henrik Solgaard Andersen said in an interview. It’s a “prerequisite” that the technology Equinor uses has “high efficiency and a high catch rate.” That compares with a maximum rate of 90% from “standard” technology, according to the International Energy Agency.

　　The company plans around 100 billion kroner ($11.7 billion) of investment in hydrogen -- comprising its own spending, partners’ contributions and state funding -- by 2035. It can count on an abundant supply of gas, with Norway pumping more than any other country in western Europe, and says its methane leak rate is below 0.03%.

　　That’s far less than targeted by industry group Oil & Gas Climate Initiative -- of which Equinor is a member -- which seeks to cut the aggregate methane intensity of upstream operations to less than 0.2% by 2025.

　　“You can’t sell natural gas to be used for blue hydrogen unless you have clean natural gas,” Andersen said. “It goes without saying that those who do not have the same emission levels as on the Norwegian shelf will struggle to sell natural gas in the future.”

　　Fledging Industry

　　To be sure, there is not yet a market for hydrogen, and it’ll take time to build up sufficient capacity to have widespread impact on industries. Norwegian consultant DNV GL AS forecast earlier this year that “hydrogen enters the picture at scale only in the late 2030s. That is far too late.”

　　In the meantime, multiple sectors are investing in electrification, from transport to metals production to home heating. While that will help to diversify economies away from fossil fuels, it won’t be sufficient to achieve the necessary emission cuts required by the Paris Agreement, according to Equinor.

　　“Electricity can be used in some sectors, but in others such as industry, or where flexible use of energy is required, electrification is not enough,” Andersen said. “Hydrogen comes in here, because you can make hydrogen in large quantities over a long period of time,” making it “part of the toolbox.”

　　Equinor is already active in the U.K.’s hydrogen industry, developing the H2H Saltend project and converting a huge gas-storage site to hold the fuel.

　　Political Push

　　The company aims to have a 10% share of the global hydrogen market in 2035 -- translating to about 8 gigawatts -- according to Andersen, who said expansion is now more down to politics than technology.

　　“What we are looking at today we could have done 20 years ago,” he said. “The technology was there, but politics and the mindset around climate were not as high on the agenda as today.”

　　With many governments now backing hydrogen research and development, Equinor has been adding specialist staff. The company now has 40 people working on blue hydrogen in its low-carbon solutions division, up from just a handful only 18 months ago, according to Andersen.

　　Equinor also plans to develop green hydrogen -- made from water and renewable energy -- but at a slower pace and smaller scale than blue hydrogen until the infrastructure needed is well established.

　　“We will have blue hydrogen for as long as we’ve got natural gas and the possibility to store CO2,” Andersen said. Development of the industry “could be a driving force to explore for more gas in the Norwegian sector, which will enable us to keep the oil and gas industry going for a longer period of time.”