Renewable Energy

Zeroing-in on climate neutrality with hydrogen

Recent efforts highlighted at COP26 2021 (United Nations Climate Change Conference) raised hopes that it may be possible to achieve the global 1.5°C climate limit using hydrogen technology, according to Angelica Buan in this report.

There may not be a silver bullet to carbon neutralising the world but major economies already have their policies set on adopting clean hydrogen (H2) energy as soon and as widely as possible.

While it is renewable, efficient, and produces no harmful emissions, it can be costly to produce, flammable, and difficult to store and transport. However, proponents of H2 believe that these obstacles can be overcome.

To reshape the global energy system, the government and industry will need to work closely together. Clean H2 deployment will be accelerated if policymakers develop a solid investment and action framework.

Hydrogen to help reduce global carbon by over 20%

The development of the hydrogen economy is critical for cost-effective and efficient global carbon reduction, allowing nations to reach their carbon neutrality targets, stimulate green economy, and create long-term jobs, according to the Hydrogen Council. The latter is a global CEO-led initiative of 123 companies from over 20 countries and across the entire hydrogen value chain, which promotes H2 as a means of accelerating the clean energy transition.

Global demand for renewable and low-carbon H2 could increase by 50% in the next decade. In 2050, China will be the largest hydrogen market, followed by Europe and North America, accounting for roughly 60% of global demand. The potential emission reductions for H2 in 2030 could be 800 million tonnes/year of CO2 emissions, the organisation said.

Clean H2 is the only long-term, scalable, and cost-effective option for deep decarbonisation in sectors like steel, maritime, aviation, and ammonia, and it augments other low-carbon

Global demand for renewable and hydrogen energy green hydrogen is projected to increase by 50% in the next decade

energy technologies like renewable power, biofuels, and energy efficiency improvements, according to the Hydrogen for Net Zero report by the Hydrogen Council and McKinsey & Company. The report stated that clean H2, which has an “annual abatement potential” of 7 Gt in 2050, could provide the “lowest-cost” decarbonisation solution for over a fifth of final energy demand by midcentury, resulting in a total reduction of 80 Gt CO2, and is thus a critical solution for achieving the 1.5°C climate scenario. This will necessitate a large scaleup of clean hydrogen production in the coming decades, or a tenfold increase over the currently installed 2.8 TW of H2 capacities will be required. The report added that H2 rollout will not be feasible without the right regulatory framework in place, with governments and businesses to take action. A set of appropriate policies is included in the requirements, such as mandates and strong carbon pricing, large-scale infrastructure development, and de-risking and focused support for large initial investments.

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A tall order for countries

In November, world leaders met in Glasgow, Scotland, for the COP26 (Conference of the Parties) summit. The 26th annual United Nations Climate Change Conference aimed to come to agreement on how to reach the Paris Agreement's global temperature limit of 1.5°C. It also emphasised the importance of low-energy technologies such as clean hydrogen in making it happen.

Already, 28 companies from mining to energy, vehicle and equipment manufacturers, and financial services have pledged to accelerate the use of decarbonised hydrogen at the COP26, according to the World Business Council for Sustainable Development (WBCSD) and the Sustainable Markets Initiative (SMI). The companies are also signatories to a new initiative called H2Zero, which focuses on accelerating the use and production of H2 as an integral part of the future net-zero energy system.

The pledges in three categories – demand, supply and financial or technical support, correspond to nearly a quarter of the decarbonisation potential for hydrogen by 2030.

On the demand side, the pledges – which total 1.6 million tonnes/ year of lower-carbon hydrogen – are primarily directed at replacing grey hydrogen, which is currently widely used in the refining, chemical, and fertiliser industries, as well as diesel fuel in heavy industries like mining.

This would cut CO2 emissions by more than 14 million tonnes/year. Meanwhile, the pledges amount to more than 18 million tonnes/ year of lower-carbon hydrogen on the supply side. If grey hydrogen, natural gas for industrial heat, and petroleum fuels in transportation are replaced, CO2 emissions will be reduced by 190 million tonnes/year.

Run-down of investments for partnerships, technology acceleration

Some renewable super majors at the COP26 The COP26 summit in Glasgow brought together world leaders to discuss the event agreed to ramp environmental agenda, including the use of low-energy technologies like clean hydrogen up clean H2 production and use. With an initial investment of more than EUR2 billion, Spanish renewable energy company Acciona Energia has entered a joint venture with Plug Power with the goal of achieving a 20% market share in the renewable hydrogen business in Spain and Portugal by 2030. Anglo American, a British multinational mining company, is developing green hydrogen (GH2) technologies, including the world's first 2,000 KW hydrogen fuel cell-powered mine haul truck and green hydrogen production at its mine sites. Furthermore, by 2030, it will convert all of its dieselpowered trucks at these sites to GH2 power. UK oil/gas company BP aims to contribute to the output of at least 500 kilotonnes/year of new low/ultra-low carbon hydrogen in core markets by 2030, with up to 50% ultra-low carbon hydrogen

BP is working on a project that is claimed to be the largest in the UK, producing up to 1GW of blue hydrogen

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coming from renewable sources. Some of the new production will be used in the firm's European refineries to replace natural gas-based SMR-grey hydrogen. There will be more than 50 hydrogen refuelling stations supplying low carbon and renewable ultra-low carbon hydrogen, with an initial focus in Germany and the UK.

Hong Kongbased CLP, one of Asia's largest investor-owned power companies, reiterated its Climate Vision 2050 to provide net-zero electricity supply to its customers. It plans to transition its natural gas generation units to run on "low carbon hydrogen" in the 2030s and 2040s as part of this commitment.

US-headquartered global hydrogen supplier Cummins is increasing its electrolyser production capacity to 2 GW by 2030 to enable GH2 production. It also plans to boost production capacity to meet market demand for fuel cell power modules and components, as well as continue to invest in R&D to develop new hydrogen products.

In May, it announced a partnership with Iberdrola, a Spanish energy company, to build one of the world's largest electrolyser plants for the production of green H2 in Castilla-La Mancha, Spain. The plant will split water into hydrogen and oxygen using Cummins' electrolyser technology.

For its part in the GH2 pledge, Iberdrola is making strides in GH2 development, with projects in Spain, the UK, the US, Brazil, and other countries to meet the demand for electrification and decarbonisation in industries.

EDP, a Portuguese energy company, has stated that it will be coal-free by 2025 and entirely green by 2030, and that it will invest in more than 1.5 GW of renewable hydrogen by that time.

US-based 8 Rivers Capital is to commercialise a novel ultra-low carbon hydrogen process technology capable of delivering clean, industrial scale hydrogen at a price that will enable natural gas displacement, and will further drive the deployment of at least 435 kilotonnes/year of ultralow carbon hydrogen by 2030.

Enel, which has started its coal phase-out process since 2017, vows to produce only renewable hydrogen

The company, which developed the clean hydrogen and ammonia technology, RH2, and the TarT sour-gas treatment system, recently partnered with JX Nippon Oil & Gas Exploration Corporation to accelerate global decarbonisation of power and hydrogen generation. Enel, an Italian multinational renewable energy company with 50.8 GW of renewable installed capacity and a target of tripling it to 145 GW by 2030, has vowed to produce only renewable hydrogen, with a capacity of 2 GW of electrolysers by 2030. The company stated that its coal phase-out process began in 2017 and that it expects to be totally free of coal in Italy by 2025 and globally by 2027. Enel has plans to close or convert 43 power plants in Europe and Latin America. Engie, which has a Net Zero by 2045 agenda, targets to develop 4 GW of renewable hydrogen production by 2030 to deliver low or ultra-low carbon hydrogen. Equinor, a Norwegian energy company that provides clean hydrogen in three to five major industrial clusters and aims to supply 10% of the European market for clean hydrogen by 2035, has pledged that all projects it brings online by 2030 will deliver low-carbon or ultra-low carbon hydrogen. Meanwhile, with a recent MOU signed with Korean East-West Power (EWP) to collaborate on 3 GW of offshore wind projects in South Korea, the company has contributed to South Korea's goal of increasing renewables by 60 GW by 2034, of which 12 GW is targeted for offshore wind by 2030.

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UK-based ERM (Environmental Resources Management), the world's largest pure-play sustainability consultancy, plans to produce 500 MW of ultra-low carbon hydrogen by 2035 through the ERM Dolphyn, a first-of-its-kind integrated system combining all of the technologies required to bring the latest floating wind and hydrogen production technologies together.

Australian iron ore major Fortescue plans to produce 15 million tonnes/year of GH2 by 2030 and allocate 10% of its profit to fund renewable energy growth. It has also signed agreements with JC Bamford Excavators and Ryze Hydrogen to supply GH2 to the UK; Universal Hydrogen in the US to supply GH2 to power regional and other aviation sectors until 2035; and Jordan and Papua New Guinea for GH2 projects.

UK energy storage and clean fuel company ITM Power is investing £0.4 billion in GH2 to boost its electrolyser production capacity from 1 GW to 5 GW/ year by 2024, to reduce the total cost of electrolysis by 50% by 2030.

Another UK company Riversimple Movement is mass-producing what it says will be the world's most environmentally-friendly fleet of vehicles that will require green hydrogen. The total cumulative hydrogen consumption is expected to be 10 kilotonnes by 2030, with a minimum of 90% coming from zero-carbon renewable sources. The sustainable car company plans to operate a fleet of 250,000 vehicles in the UK by 2040, with H2 demand of 27 kilotonnes/year.

Anglo-Dutch petrochemical firm Shell has committed to using “better hydrogen” in its chemical parks by 2030. By 2030, the company wants to produce 75 kilotonnes/year of ultra-low carbon hydrogen and 100 kilotonnes/year of reduced carbon hydrogen.

French oil and gas company TotalEnergies is headed towards using renewable hydrogen to replace all grey hydrogen consumed in its European refineries by 2030. Also by that year, Yara, a Norwegian fertiliser and environmental solutions company, plans to source and/or produce a minimum of 3 million tonnes of reduced carbon ammonia (equivalent to 530 kilotonnes of reduced-carbon hydrogen), with a minimum of 50% low-carbon or ultra-low-carbon ammonia.

Biofuels and renewable energy producer Yosemite Clean Energy is focused on delivering its first portfolio of carbon negative-renewable hydrogen from waste biomass (carbon intensity score of -56 or better) that will be produced at three production facilities currently under construction in California, US, and scheduled to begin production in 2024.

The three hydrogen projects are designed to minimise GHGs by eliminating an estimated 402 kilotonnes/year of CO2, and reduce the use of diesel fuels by an estimated 19.5 million/year.

Putting costs to rest

The development of GH2 as a component of the global energy system is hampered by two factors: supply uncertainty and a lack of demand commitment.

Institutions and companies, including the Bank of America (BofA), Hinicio, Johnson Matthey, Linde, Siemens Energy, Snam and Yokogawa, have affirmed their support of investments, regulatory schemes, and advanced technologies for expanding the hydrogen market at the COP26, which in the long term could potentially bring costs downs.

Green hydrogen is more expensive at US$38/kg than the fossil-fuel based grey hydrogen costing around to US$0.50-1.70/kg, according to the International Renewable Energy Agency (IRENA). The UAE-based treaty organisation and the World Economic Forum (WEF) proposed solutions to the cost issue that may be jeopardising GH2 expansion.

A new report, Enabling Measures Roadmap for Green Hydrogen, developed by IRENA, WEF and consultancy Accenture outlined several objectives in areas like cost reduction, demand growth, international standards, infrastructure, and technology development for GH2 implementation.

These objectives include: • Deploying mechanisms that close the cost gap for hydrogen use in hard-to-abate sectors • Driving critical mass demand through major hydrogen projects project; and efficient allocation of capital within Europe and for imports • Reducing fossil-fuel consumption through mandates and obligations • Ensuring early ramp up of ‘no regret’ infrastructure safety standards for project development; clarity on carbon intensity standards through a guarantee of origin scheme; setting clear carbon intensity, definitions, thresholds, boundaries for hydrogen production and ensuring member states, EU and exporters — both inside and outside the EU — use the same methodology and scope for carbon intensity • Hyperscaling electrolyser development and removing barriers to growth; and focusing innovation and R&D to enable technology scaleup”

The report, which is expected to serve as a toolkit for energy players and policymakers, may appear quite technical to the 7.9 billion global population that is said to benefit from a healthy environment, and considering its cons may even raise a few questions about whether we are on the right track of fully entrusting our energy future to GH2.

Regardless, we'll never know unless we try.