Can hydrogen help solve the world's dirtiest energy problems?

Hydrogen is enjoying unprecedented political and business momentum. Hydrogen offers ways to decarbonise long-haul transport, chemicals, and iron and steel-where it is proving difficult to meaningfully reduce emissions.

Hydrogen demand stood at 90Mt in 2020, practically all for refining and industrial applications and produced almost exclusively from fossil fuels, resulting in close to 900Mt of CO2 emissions.

Global capacity of electrolysers, which are needed to produce hydrogen from electricity, doubled over the last five years to reach just over 300MW by mid-2021. Around 350 projects currently under development could bring global capacity up to 54GW by 2030, according to IEA research.

Another 40 projects accounting for more than 35GW of capacity are in early stages of development. If all those projects are realised, global hydrogen supply from electrolysers could reach more than 8Mt by 2030. Most announced projects range from 1MW to 10MW in size and are close to industrial sites and ports. Europe accounts for 40% of global installed capacity, with the next-largest capacity shares in Canada (9%) and China (8%).

Country Targets

Since the pandemic, several European countries have committed significant sums to develop hydrogen technology in a boost to the sector's credibility as a global fuel source. A joint European hydrogen project was launched in December 2020 to pave the way for large-scale projects that cover the full value chain. Several European oil companies, including Royal Dutch Shell and BP, are backing new hydrogen projects. Airbus this year unveiled plans for a hydrogen-fuelled airplane by 2035.

The EU has named green hydrogen as a vital technology in the continent's path to net zero carbon emissions by 2050. The region is leading electrolyser capacity deployment, with 40% of global installed capacity, and is set to remain the largest market in the near term on the back of the ambitious hydrogen strategies.

The EU has set a 40GW electrolyser capacity target by 2030, producing 10Mtpa of green hydrogen to help achieve its target of a 55% cut in greenhouse gas emissions by decade-end, compared with 1990 levels. This will require a huge ramp up in renewable electricity generation, given that strict EU rules for green hydrogen production require facilities to utilise dedicated renewable generation, or curtailed generation from existing renewables.

The UK, meanwhile, is the only European country with a blue hydrogen strategy as the stepping stone to green hydrogen. It has a target of 5GW of "low-carbon hydrogen" capacity by 2030, on par with Germany and Italy, but behind France's 6.5GW. The target includes a mix of green and blue hydrogen in as-yet unknown quantities. Government analysis suggests that 20-35% of the UK's energy consumption could be hydrogen-based by 2050.

The UK's "twin track" hydrogen strategy, revealed in August 2021, pledges funding for both hydrogen and end-user sectors totalling about GBP900m (US$1.2bn), while ensuring that existing mechanisms for renewable fuels are tweaked to support green hydrogen.

France has allocated EUR7.2bn through 2030 to develop a green hydrogen production capacity of 6.5GW by decade-end. This would prevent 6Mtpa of CO2, roughly the emissions of Paris. France currently uses 900kt of hydrogen, mostly in refineries and the chemical sector, emitting 9Mtpa of CO2. Meanwhile, Germany has committed EUR9bn to have an installed electrolyser capacity of 5GW to produce 14TWh of green hydrogen by 2030. Another 5GW would come a decade later. Germany has a global market share of 20% in building electrolysers, led by Thyssenkrupp subsidiary Uhde.

Japan is looking to shift its vast industrial base, powered by imported fossil fuels, to hydrogen in one of the world's biggest bets on an energy source. Japan wants hydrogen and ammonia to make up 1% of both the primary energy and electricity supply mix in 2030 to support its goal to reduce greenhouse gas emissions by 46% by 2030, compared to 2013 levels. The effort will be supported by the country's JPY2tn (US$19.2bn) green innovation fund to accelerate efforts toward the country's target of being carbon neutral by 2050.

By 2030, Japan also aims to introduce 30% co-burning of hydrogen at gas-fired power plants or mono-burning of hydrogen for power generation as well as introducing 20% co-burning of ammonia at coal-fired power plants.

Japan is focused on expanding its hydrogen market from 2Mtpa today to 3Mtpa by 2030 and 20Mtpa by 2050. The country's mobility targets included 200k fuel-cell vehicles by 2025 and 800k by 2030, as well as 320 fuelling stations by 2025 and 900 by 2030. The government currently subsidises 135 hydrogen refuelling stations around the country, the largest number in the world.

Reducing the cost of hydrogen production is a major agenda for Japan. The work is underway to reduce the cost from about US$1 per cubic meter (Cm) in 2017 to US$0.30/Cm by 2030 and about or below US$0.20/Cm by 2050.

In the US, President Joe Biden's US$1.2tn bipartisan infrastructure bill includes US$8bn to create at least four regional hydrogen hubs to produce the fuel for use in manufacturing, heating and transportation. One hub would demonstrate production from fossil fuels, one would use renewable power, and another would use nuclear power. Coal is also listed a potential source.

The US Department of Energy set a goal this year for hydrogen made with clean power, such as renewables and nuclear energy plants, by 80% to US$1/kg in a decade. "Clean hydrogen is a game changer," US Energy Secretary Jennifer Granholm said in a June statement. "It will help decarbonize high-polluting heavy-duty and industrial sectors, while delivering good-paying clean energy jobs and realizing a net-zero economy by 2050."

Hydrogen Explainer

Hydrogen can be produced using nuclear, natural gas, coal and oil. It can be transported as a gas by pipelines or in liquid form by ships, like LNG. It can be transformed into electricity and methane to power homes and feed industry, and into fuels for cars, trucks, ships and planes. Fuel cells, refuelling equipment and electrolysers (which produce hydrogen from electricity and water) can all benefit from mass manufacturing. But hydrogen infrastructure is limited and holding back widespread adoption. This means it will take national and local governments, industry and investors to support this fuel source.

Hydrogen is almost entirely supplied from natural gas and coal today through an energy-intensive and polluting method called the steam reforming process. It uses steam, high heat and pressure to break down the methane into hydrogen and carbon monoxide. Its production is responsible for annual CO2 emissions equivalent to those of Indonesia and the United Kingdom combined. Blue hydrogen uses the same process but applies carbon capture and storage (CCS) technology.

Green hydrogen, on the other hand, uses renewable energy to split water into its constituent parts, hydrogen and oxygen. Very little hydrogen is currently green because the process involved is hugely energy intensive and renewable energy capacity is often insufficient. Going forward, however, if the world starts to produce excess renewable energy, converting it to hydrogen would be one way to store it.

The increased focus on reducing emissions to near zero by 2050 has brought into focus the challenge of tackling hard-to-abate emissions sources. These emissions are in sectors and applications for which electricity is not currently the form of energy at the point of end use, and for which direct electricity-based solutions come with high costs or technical drawbacks. Four-fifths of total final energy demand by end users today is for carbon-containing fuels, not electricity. In addition, much of the raw material for chemicals and other products contains carbon today and generate CO2 emissions during their processing.

Hydrogen has never experienced so much international and cross-sectoral interest, even in the face of impressive recent progress in other low-carbon energy technologies, such as batteries and renewables. As the cost of technologies has fallen and ambition for tackling climate change and air pollution has risen, the viability of hydrogen as a flexible complement to electricity has improved. While the level of investment today remains very modest compared to the scale of the energy system, and deployment challenges are significant, the current level of attention has opened a genuine window of opportunity for policy and private-sector action.

Hard-to-tackle emissions sources include aviation, shipping, iron and steel production, chemicals manufacture, high-temperature industrial heat, long-distance and long-haul road transport and, especially in dense urban environments or off-grid, heat for buildings. Rapid technological transformations in these sectors have made limited progress in the face of the costs of low-carbon options, their infrastructure needs, the challenges they pose to established supply chains, and ingrained habits.

While significant financial and political commitments will be necessary to realise deep emissions cuts, there is an increasing sense of urgency to start developing solutions. As a low-carbon chemical energy carrier, hydrogen is a leading option for reducing these hard-to-abate emissions because it can be stored, combusted and combined in chemical reactions in ways that are similar to natural gas, oil and coal. Hydrogen can also technically be converted to "drop-in" low-carbon replacements for today's fuels, which is particularly attractive for sectors with hard-to-tackle emissions, especially if there are limits to the direct use of biomass and CCUS.

The IEA said in May that hydrogen would be needed, along with solar and wind energy, if the world is to reach net-zero carbon emissions by 2050. Its most technically feasible road map predicted hydrogen and related fuels would make up 13% of the total energy mix that year, while investment could exceed US$470bn annually.

How do electrolysers work?

Electrolysers can range in size from small, appliance-size equipment that is well-suited for small-scale distributed hydrogen production to large-scale, central production facilities that could be tied directly to electricity production. The hydrogen can be delivered by trucks or be connected to pipelines.

Like fuel cells, electrolysers consist of an anode and a cathode separated by an electrolyte. The entire system also contains pumps, vents, storage tanks, a power supply, separator, and other components. Water electrolysis is an electrochemical reaction which takes place within the cell stacks.

Different electrolysers function in different ways, mainly due to the different type of electrolyte material involved. There are three main types of electrolysers: proton exchange membrane (PEM), alkaline and solid oxide.

Alkaline electrolysers operate via transport of hydroxide ions (OH-) through the electrolyte from the cathode to the anode with hydrogen being generated on the cathode side. It uses a liquid electrolyte solution such as potassium hydroxide (KOH) or sodium hydroxide (NAOH), and water. Alkaline electrolysers dominate with 61% of installed capacity in 2020 and have been in use for hydrogen production in the fertiliser and chlorine industries since the 1920s.

In a PEM electrolyser, when a current is applied on the cell stack, the water splits in hydrogen and oxygen and the hydrogen protons pass through the membrane to form H2 gas on the cathode side. The electrolyte is made from a solid specialty plastic material. PEMs had a 31% share of global installed capacity in 20202. PEM electrolysers have the advantages of smaller size, more flexible operation and higher-pressure output than alkaline, but are less mature, more costly and currently have shorter lifetimes.

Electrons from the external circuit combine with water at the cathode to form hydrogen gas and negatively charge ions. Oxygen then passes through the slid ceramic membrane and reacts at the anode to form oxygen gas and generate electrons for the external circuit. It uses a solid ceramic material as the electrolyte.

"Producing hydrogen from low-carbon energy is costly, but could fall 30% by 2030, driven by lower renewable energy costs."

"Hydrogen infrastructure is limited and holding back widespread adoption- which means further investment is needed."

Global Demand for Pure Hydrogen, 1975 - 2018
Feature Articles

Hydrogen February 2021
Hydrogen – An Opportunity for Oil and Gas Companies?

Interest in hydrogen is mainly centred in two regions—China and the EU. China's interest stems from the country's desire to dominate global energy and technology markets. In the EU, government policy has taken centre stage thanks to the EU Hydrogen Strategy. Released last July, the plan calls for the installation of 6GW of renewable hydrogen electrolysers by the end of 2024, and at least 40GW by 2030.

Daily Briefing
Selection: Hydrogen; This Month (Jan);
Time Period
  • Most Recent
  • This Week
  • This Month (Jan)
  • This Year (2022)
  • Last 2 Years (2020-2021)
South Korea to Subsidise World's Largest Hydrogen Bus Order
25 Jan 2022
The South Korean government will subsidise the purchase of 624 hydrogen buses which will hit the roads in the Busan, Ulsan and Gyeongnam provinces by the end of 2025.

The Ministry of Environment and local authorities will each contribute KRW150m (US$125k) towards every KRW630m (US$527k) fuel-cell bus, with Korean auto manufacturer Hyundai offering a KRW10m (US$8k) bulk-purchase discount on each unit. 

The deal for the 624 buses will be the world's largest-ever order for hydrogen-powered buses. The subsidies for the project add up to KRW187.2bn ($157m).

South Korea currently has 112 hydrogen filling stations in operation across the country. In 2022, 38 more filling stations will be added, according to local media.

“Through this agreement, the Ministry of Environment is planning to gradually expand the target and scale to other regions by using it as a model example of leading city bus pollution-free leadership,” the ministry said in a statement.

Environment minister Han Jeong-ae added: “This business agreement is a promise to realise the future hydrogen economy in the present.”

South Korea is aiming to achieve net-zero emissions by 2050, but because of its limited available land for renewables projects, it is planning for 33% of its energy to come from hydrogen by 2050—60% of which will be imported.

It also plans to have 5.3m fuel-cell electric vehicles on its roads by 2050, powered by at least 2,000 hydrogen filling stations.
Repsol-Led Consortium to Invest $4.4bn in Green Hydrogen in Spain
24 Jan 2022
A Repsol-led consortium will invest EUR3.23bn (US$4.4bn) to install 500MW of green hydrogen capacity by 2025 and 2GW by 2030 in Spain—half of the government's 4GW target.

The consortium of 33 companies, known as SHYNE (the Spanish Hydrogen Network), will also build renewable-energy projects to power the electrolysers, and will build at least 12 new hydrogen filling stations by 2025.

The consortium also plans to develop solid-oxide electrolysers and photoelectrocatalysis—a technology that creates hydrogen directly from solar energy without the need for electrolysers. Spanish oil giant Repsol plans to make the technology commercially viable by 2030.

SHYNE's “promoting partners” include Spain’s leading bus company Alsa; Bosch, which is developing hydrogen boilers; steel company Celsa; Spanish gas grid operator Enagás; Swedish truck maker Scania; and train manufacturer Talgo, which is due to test its first hydrogen-powered train in March.

Meanwhile, the “collaborating partners” include national airline Iberia, passenger ferry company Baleària, power equipment supplier Wärtsilä, local trade associations and eight research institutions and universities.

“The synergies between the companies collaborating in SHYNE will support coordinated industrial developments throughout the hydrogen value chain, maximising investment capacities,” Repsol said in a statement.

Repsol said that the project is expected to generate more than 13k jobs in Spain.
World’s First Hydrogen Ship Arrives in Australia
21 Jan 2022
The world’s first carrier of liquefied hydrogen has arrived in the Australian state of Victoria to pick up its inaugural cargo and transport it to Japan.

The Suiso Frontier, docked at Victoria's Port of Hastings, will transport liquid hydrogen from a A$500m (US$361m) pilot project in the Latrobe Valley to Kobe in Japan in a world first.

Governments are increasingly looking to hydrogen to slash emissions from difficult-to-decarbonise parts of the economy. Japan, the top buyer of Australian LNG, has set a target of net-zero emissions by 2050 and is counting on hydrogen to lower its usage of fossil fuels.

The Hydrogen Energy Supply Chain (HESC) pilot project, led by a consortium including Japan’s J-Power, Kawasaki Heavy Industries, Shell and AGL, is demonstrating the conversion of Latrobe Valley brown coal into hydrogen gas.

The hydrogen is produced by reacting coal with oxygen and steam under high heat and pressure in a process that also yields carbon dioxide. The hydrogen is then trucked to a port site where it is cooled to minus 253 degrees Celsius, liquefying it for export. 

If the project becomes commercial, it would be paired with carbon capture and storage to trap emissions and bury them in depleted gas reservoirs in Bass Strait.

“The 225kt of carbon-neutral liquefied hydrogen produced by HESC in a commercial phase will contribute to reducing global carbon-dioxide emissions by some 1.8Mtpa – equivalent to the emissions of about 350k petrol-driven cars,” the consortium said.

The Australian government on Friday will announce a further A$7.5m (US$5.4m) to support the project's pre-commercialisation phase and A$20m (US$14.5m) for the CCS project.

The project's use of coal combined with CCS has drawn criticism from environmentalists, who argue that the technology’s success at a large scale is unproven and fear it could prolong the use of fossil fuels.

Last year, Chevron’s huge Gorgon CCS project in Western Australia failed to meet a crucial target of capturing and burying an average of 80% of the carbon dioxide produced from its gas reservoirs.
Finland's Largest Green Hydrogen Production Plant to Cost EUR250m
20 Jan 2022
Finnish energy firm Lahti Energia Oy and clean energy developer Nordic Ren-Gas Oy have signed a deal to team up on Finland's largest green hydrogen plant, set to cost EUR250m (US$220m).

The two partners will now proceed with the technical and economic feasibility analysis for the Power-to-Gas plant, which will convert carbon dioxide, water and wind power into renewable methane and green hydrogen.

The plant, to be built in a staged manner next to the Kymijarvi power station in Lahti, plans to produce around 50mLpa of renewable gas fuel for heavy-duty use. Lahti Energia expects to receive a significant amount of carbon dioxide (CO2)-free district heating from the plant.

The project will start with a 20MW electrolyser that should be commissioned in 2025. By the end of the decade, the facility could be expanded to 120MW, and at that point, the developers estimate, nearly 40% of Lahti Energia's district heating could be produced cost-effectively with waste heat.

The entire process is planned to run on electricity from 300MW of new wind parks that will be contracted under long-term power purchase agreements (PPAs).

The partners aim to conduct a feasibility study this year, while construction work could start in 2023, subject to achieving authorisations and financing.
Woodside Begins Work on Proposed H2OK Project in Oklahoma
19 Jan 2022
Energy producer Woodside has announced that it has begun work on the proposed H2OK project in Oklahoma in the US. The company has started front-end engineering design (FEED) after awarding the contract to Kellogg, Brown & Root (KBR) in December 2021.

If the project is given the green light, Woodside plans to build an initial 290MW facility, producing up to 90t of liquid hydrogen per day, at the Westport Industrial Park in Ardmore. In future, the facility may expand to produce up to 550MW and 180t per day. The site’s output will be destined for the heavy transport sector.

Woodside hopes to have a final investment decision on the project in the second half of 2022, and to produce the first liquid hydrogen in 2025.
Motor Oil, PPC Team Up to Develop Green Hydrogen Projects in Greece
18 Jan 2022
Greek utility PPC SA and domestic petroleum refiner Motor Oil Hellas have unveiled plans to jointly develop green hydrogen projects in the southeastern European country.

The two firms have signed a Memorandum of Understanding (MoU) to form a new entity that will be 51% held by Motor Oil. PPC will own the remaining 49%, it said in a bourse filing on Thursday.

The new company will be involved in the development of green hydrogen generation and storage projects in Greece. It will utilise PPC’s renewable energy production and Motor Oil’s experience as one of the largest energy groups in the country.

Oil and gas companies in Greece are turning to renewable energy sources to secure a position in the low carbon energy market. Two green hydrogen projects, known as White Dragon and Green HiPo, have been declared important projects of common European interest (IPCEI).

These two projects are designed to replace Greece’s largest coal-fired plants with renewable solar energy parks, which will be supported by green hydrogen production (4.65GW), and fuel cell heat and power production (400MW).

Greece is aiming to achieve net-zero emissions by 2050.
Page: of 2