Promoting the hydrogen economy is critical if clean fuels are to play the role they are projected to play in global decarbonization.
The relevance of hydrogen in the energy transition process arises from its capacity to cut emissions in sectors that are difficult to electrify, in particular.
Despite decades of discussion, the hydrogen sector remains tiny and carbon-intensive; as a result, the International Energy Forum is demonstrating what has to be done for hydrogen to achieve its potential as a flexible, carbon-neutral fuel.
Economy based on hydrogen
Hydrogen is now gaining political traction; Japan has stated its ambition to transition to a hydrogen-based society, while the United Kingdom has stated its intention to establish the groundwork for a hydrogen economy by 2030.
While the UAE hopes to grab 25% of the global hydrogen market by the end of the decade, it also plans to build more than 7 hydrogen projects aimed at important export markets such as Japan, South Korea, Germany, and India.
According to IEF analyst Alison Catwright, the hydrogen industry is still in its infancy, accounting for just 1% of total energy use and 915 million tons of carbon dioxide emissions annually.
According to the paper, creating a hydrogen economy that achieves climate targets requires cross-sectoral collaboration and governmental assistance to minimize costs and risks for investors, as well as speed technology and infrastructure development, rather than the present highly centralized market.
Infrastructure assistance
There is a pressing need for hydrogen infrastructure, particularly for storage and delivery, and this may rely on existing energy infrastructure, such as ports and natural gas pipelines, to a great extent.
In the United Kingdom, for example, a project is ongoing to transport hydrogen and natural gas using the current gas network. In this approach, the country’s present infrastructure might save 6 million tons of carbon emissions per year.
Meanwhile, in Namibia, a $9 billion hydrogen project intends to take use of the country’s natural resources.
However, due to supply and demand uncertainties, it is still challenging to attract investment in expensive and unproven initiatives, according to the paper.
According to Alison Catwright, the hydrogen economy requires stronger governmental backing to reduce risks on both the supply and demand sides. This may be accomplished by carbon pricing, for example.
Closing the green chasm
Governments must encourage the generation of green hydrogen as part of fostering the hydrogen economy so that it can play a significant role in decarbonization.
According to the paper, green hydrogen is now two to three times more expensive than blue hydrogen, which is created from natural gas using carbon capture technology, and up to ten times more expensive than hydrogen derived from fossil fuels.
The World Business Council for Sustainable Development announced pledges from 28 companies across multiple sectors at the COP26 climate summit, which are expected to help avoid more than 200 million tons of carbon emissions annually by addressing supply and demand uncertainty for low-carbon hydrogen.
According to the paper, it would be useful to develop a globally recognized mechanism for certifying and determining the carbon intensity of hydrogen generation.
All degrees of coordination
To make a difference in global decarbonization, the International Energy Forum believes that accelerating the hydrogen economy requires a coordinated response by industries, nations, and international agencies.
Germany, as a major energy importer, intends to collaborate with foreign partners to meet its 2030 goal of 6 GW of green hydrogen capacity.
On the business side, BP and Daimler recently established a collaborative venture to speed up the UK’s hydrogen network in order to facilitate fuel cell transportation.
