Russian Prime Minister Mikhail Mishustin has created a hydrogen working group in what is seen as an attempt to respond to energy transition demands in its major energy export markets in Europe and Asia.
The initiative underscores the dominant view in Russia that its own future production of hydrogen will be predominantly reliant on natural gas.
This would result predominantly in the production of blue hydrogen — which uses carbon capture and storage (CCS) — rather than green hydrogen, where renewable energy is used to power the process of electrolysis that splits water into hydrogen and oxygen.
There is also a lobby in Russia backing the continued development of oil and coal in providing energy to planned hydrogen production facilities, with the government stressing that the country is “rich in hydrocarbon resources”.
The new working group includes the presidents and vice presidents of leading Russian gas producers Gazprom and Novatek, and oil producers Rosneft and Gazprom Neft, as well as representatives of several other major Russian state run corporations and related ministries.
For several years, Gazprom has been researching the option of blending hydrogen into gas supplies and recently reiterated a possibility that one of the two lines of its upcoming Nord Stream 2 subsea gas pipeline to Germany may be repurposed to carry hydrogen in around 10 years.
Russia’s largest independent gas producer Novatek has been leading the efforts toward change, having signed several agreements earlier this year to consider CCS, ammonia production and wind power generation at its liquefied natural gas projects on the Yamal Peninsula.
Meanwhile, Rosneft and Gazprom Neft have repeatedly stressed that they are not newcomers to hydrogen, as it has long been produced and used at their refineries — typically the unabated “grey” hydrogen.
However, both said they are also working on wind and solar power options to reduce their carbon footprint.
The working group does not include representatives of other privately held Russian oil producers, such as Lukoil, Surgutneftegaz and Tatneft.
Lukoil vice president Leonid Fedun said earlier this week that Russian oil producers “have been greatly relieved” by the European Commission’s proposalto postpone the much feared introduction of a carbon border tax on their oil and products exports to Europe beyond 2026.
This means that Russian producers should now expect a 10-year wait before it has an impact on their European exports.
The creation of the working group was envisaged last year after Mishustin approved the country’s roadmap to foster the development of hydrogen production and exports.
The roadmap makes no distinction between green, blue and grey hydrogen, industry analysts in Moscow note.
This reflects the Russian view that the country should be ready to consider all possible ways of taking a larger share in future hydrogen markets in Europe and Asia as its exports of oil and gas to the continent start to decline.
According to the roadmap, authorities expect new hydrogen-producing facilities with CCS in Russia to enter commissioning as early as 2023.
They will be followed by trial units to produce hydrogen from water, using nuclear and renewable power sources, officials promised.
Putin adviser to lead
According to Mishustin’s resolution, the working group will be headed by Deputy Prime Minister in charge of energy issues Alexander Novak.
The importance of the new body to the Kremlin has been underscored by the inclusion of St Petersburg Mining University rector Vladimir Litvinenko, according to observers.
Litvinenko has been long seen as close to Russian President Vladimir Putin, overseeing Putin’s dissertation work in 1996 in which he argued for the larger state involvement in the country’s oil and gas sector