According to a study conducted by the Potsdam Institute for Climate Impact Research (PIK), hydrogen-based fuel is ideally suited for use in non-electrified sectors such as aviation and certain industrial processes.
In certain cases, these fuels are too unreliable and expensive to manufacture, and their supply is too unpredictable, to make them a viable alternative to fossil fuels. Direct use of electricity (battery electric vehicles or heat pumps, for example) makes more economic sense for uses such as powering cars or heating homes. Continuation of combustion technologies while relying on hydrogen-based fuels could cement fossil fuel dependence and increase greenhouse gas emissions.
“Hydrogen-based fuels can be a great clean energy carrier — yet great are also their costs and associated risks,” said lead author Falko Ueckerdt from PIK. “Fuels based on hydrogen as a universal climate solution might be a bit of false promise. While they’re wonderfully versatile, it should not be expected that they broadly replace fossil fuels. Hydrogen-based fuels will likely be scarce and not competitive for at least another decade. Betting on their wide-ranging use would likely increase fossil fuel dependency: if we cling to combustion technologies and hope to feed them with hydrogen-based fuels, and these turn out to be too costly and scarce, then we will end up further burning oil and gas and emit greenhouse gases. This could endanger short- and long-term climate targets.”
According to Ueckerdt, the study suggests prioritizing hydrogen-based fuels in applications where there is no other good safe alternative, such as long-distance aviation, chemical feedstocks, steel manufacturing, and possibly some high-temperature industrial processes. “These are industries and applications that we can’t explicitly electrify.”
Prioritization was generated in “merit-order of hydrogen and e-fuel demand,” according to the researchers.
Electrolysis breaks the stable H2O water molecules into hydrogen and oxygen, resulting in “green” hydrogen. Hydrogen can be used to synthesize hydrocarbon fuels by adding carbon from CO2. These e-fuels are appealing because they are cheaper to store than electricity or pure hydrogen, and they can quickly replace fossil fuels because they can be burned in traditional combustion engines and processes. However, making them necessitates a significant amount of electricity. Given their limited supply, it’s unrealistic to expect them to completely substitute fossil fuels, according to Gunnar Luderer, a co-author of the paper.
A car that runs on hydrogen-based fuels consumes five times the amount of energy as a battery-electric vehicle. It is important to make optimal use of electricity, which is still far from 100 percent renewable.
The Paul Scherrer Institute’s Romain Sacchi said, “Low energy efficiencies cause a fragile climate effectiveness.” “Hydrogen-based fuels will increase, not decrease, greenhouse gas emissions if generated with current electricity mixes. Using hydrogen-based fuels in vehicles, trucks, or planes will generate three to four times more greenhouse gas emissions than using fossil fuels in the German energy mix in 2018.”
Based on today’s energy mixes in most countries, the researchers show that electric cars or trucks already cause greenhouse-gas emissions comparable to or lower than emissions from diesel or gasoline cars based on a complete lifecycle study that involves emissions associated with battery output.
“Hydrogen-based fuels become an important way to help balance our atmosphere only for fully renewable-based power systems,” said co-author Jordan Everall. “Hydrogen-based fuels, on the other hand, obviously necessitate the construction of a large number of additional renewable energy production facilities.”
Even with 100 percent renewable electricity, the researchers estimate that the cost of using hydrogen-based fuels to avoid one ton of CO2 emissions is currently 800 euros for liquid fuels and 1200 euros for gaseous fuels, which is significantly higher than current CO2 prices in the European Emissions Trading Scheme, which are now below 50 euros per ton. With continued technological development powered by CO2 rates, incentives, and investment in hydrogen and related industries, CO2 abatement costs could drop to around 20 euros for liquid and 270 euros for gaseous e-fuels. Hydrogen-based fuels could become cost effective around 2040 if CO2 prices rise, but this will be too late for sectors with electrification alternatives.
Nonetheless, provided the right circumstances, the authors of the study believe hydrogen-based fuels have a spot.
“Despite future cost uncertainty, hydrogen-based fuels have the potential to become a backstop technology for replacing all remaining fossil fuels by 2040-50. However, before business cases can be secured solely by increasing carbon pricing, significant large-scale policy support and, in reality, subsidies are needed for about two decades “Falko Ueckerdt remarked. “Two pillars may support an overall policy strategy: First, comprehensive technology support, including direct electrification, to encourage innovation and initial scale-up. Second, significant carbon pricing and electricity tax reform that, when combined, provide a level playing field for all technologies and, as a result, a sensible balance between direct and indirect electrification.”
Luderer claims that hydrogen-based fuels have a bright future. “E-fuels can be internationally traded and thus overcome renewable energy bottlenecks in heavily populated countries such as Japan or Europe by tapping into the vast wind and solar energy capacity of the global sun belts. However, since international and national climate goals necessitate urgent emission reductions, direct electrification should be prioritized from a climate perspective to ensure a secure future for everyone.”