What is the potential for using hydrogen in mitigating climate change?

Hydrogen is a versatile fuel. It can be moved and stored in either gaseous or liquid form, it does not emit any greenhouse gas at the point of use, and, importantly, hydrogen can replace fossil fuels without major infrastructure change in some applications, given similarities in the way it needs to be handled. Thanks to this unique combination of features, hydrogen and its derivatives, such as synthetic fuels, have been touted as a key technology for the low-carbon transition. This could prove particularly relevant for hard-to-decarbonise sectors which are too costly or technically difficult to electrify, for example heavy industry (e.g. steel), chemical production, long-haul transport (road freight, shipping and aviation) and residential heating in certain contexts.

Hydrogen can also be used to store energy produced from wind and solar power when demand is lower than supply. The integration with renewables could be used to reduce the inherent intermittency of their output, one of their main weaknesses. In another potential application, hydrogen could be produced alongside desalinated water through a combination of saline water electrolysis and mineral weathering. This process has the additional benefit of removing CO2 from the atmosphere by creating bicarbonate. There are hopes that this technology could prove more effective than Bioenergy with Carbon Capture and Storage (BECCS) in power generation and CO2 removal.

How is hydrogen produced?

There are multiple ways of producing hydrogen, but not all of them are low carbon. Currently, more than 70% of the global hydrogen supply comes from a high-emitting process that relies on methane (referred to as ‘grey hydrogen’). However, hydrogen can also be obtained by electrolysis of water, a process that could be environmentally-friendly if powered by renewables or waste (‘green hydrogen’). Another alternative is to capture and store the CO2 emitted by the production technologies relying on methane (resulting in ‘blue hydrogen’), or to co-produce graphite through natural gas pyrolysis (to produce ‘turquoise hydrogen’).

Potential applications and limitations of hydrogen in decarbonisation efforts

Particularly due to its potential applications in traditionally hard-to-abate sectors, hydrogen – alongside other low-carbon solutions – is key to reaching net zero emissions targets.

Hydrogen is considered by the third working group of the Intergovernmental Panel on Climate Change (IPCC) as being close to commercialisation for steelmaking in several regions. However, it is a costly fuel and is therefore considered a long-term solution rather than a short-term fix in many cases. This is especially true in the transport sector, where battery-powered electric vehicles are seen as the dominant alternative to internal combustion engine vehicles until at least 2030, while fuel cell vehicles could represent a significant share in the longer term, provided that sufficient amounts of zero-carbon hydrogen are produced. Importantly, most of the clean ways to produce and use hydrogen have not yet been deployed due to a combination of high cost, technical and infrastructure issues, and a lack of political willingness. While it is promising that some existing fossil fuel infrastructure can be easily adapted to use hydrogen instead, this might increase the risk of locking ourselves into an energy-intensive system, especially if fossil fuels retain a meaningful share.

Because of the absence of both large-scale deployment and proven ability to perform as efficiently as other low-carbon technologies like wind and solar in many areas, hydrogen is expected to replace sources that currently generate a fifth of current emissions. The IPCC therefore projects that the share of hydrogen in energy production and final energy demand will remain significantly lower than solutions like wind, solar, electrification and energy efficiency.

How is hydrogen being integrated into climate change policies worldwide?

The Climate Change Laws of the World database reveals that as of June 2022, more than 24 laws and 77 policies feature hydrogen measures or clauses. The vast majority of these come from European countries, China, Russia, Japan, the United States and South Korea. Developing nations appear to have legislated less on hydrogen use to date, despite the potential economic opportunities that developing a new industry could offer. Most laws and policies focus on green and blue hydrogen. This is unsurprising, as these are the primary forms of hydrogen that offer emissions saving potential, although recently-published research shows that the actual carbon footprint of blue hydrogen is vastly underestimated and urges caution about investing in this technology.

Some governments have recently developed policies to support the production and use of hydrogen as part of novel low-carbon industries. With its 2020 hydrogen strategy, the European Union in particular demonstrates strong ambition in hydrogen. All decarbonisation scenarios prepared by the European Commission integrate hydrogen and build on the EU’s position as a leader in electrolysis technology. Norway and India emphasise the role of hydrogen as a chemical feedstock, notably to produce ammonia, a common fertiliser. Norway also singles out hydrogen’s potential in heavy industry, notably regarding steel and manganese production, and the reduction of titanium oxide.

Many countries are exploring ways to incorporate hydrogen into their sustainable transport strategies, alongside electromobility and novel production of liquid biofuels. The United Kingdom has set wide-ranging targets, including for heavy-duty road vehicles. Japan declared its intent to push for the use of hydrogen in shipping. South Africa’s Green Transport Strategy also seeks to expand the use of hydrogen-based fuel cell technology in public transport and private cars as part of a dual focus on hydrogen and electromobility. However, electromobility dwarves hydrogen in climate-related transport policies around the world, especially when it comes to light vehicles.

How can hydrogen be scaled up?

Many countries are recognising the importance of hydrogen in climate mitigation and are beginning to include it in their decarbonisation pathways.

However, for hydrogen to achieve wider commercialisation and greater impact, it needs to become much more affordable. Unlike wind and solar, which need heavy capital investments but are almost free to run, hydrogen prices are primarily determined by operational costs, just like fossil fuels. Green hydrogen remains costly because the ways of producing it are energy-intensive and depend on the availability and cost of low-carbon electricity. This means that the electricity produced by wind, solar or another low-carbon technology needs to be in ample supply and cheap enough that making green hydrogen becomes viable. Contracts for Difference might be a practical solution to reach that point in the short term. Balancing mechanisms are also needed in the case of electricity storage.

For applications of hydrogen to reach maturity and large-scale dissemination, long-term commitments from governments are needed. Firstly, subsidies and other supporting policies must encourage research and development (R&D). The International Energy Agency estimates that US$1,200 billion of investment would be needed by 2030 to make hydrogen widely competitive. Secondly, policies must enable the expansion of new infrastructure while encouraging the integration of hydrogen into existing energy systems. Thirdly, policies must focus on sectors where low-carbon alternatives are lacking, especially heavy industry and heavy transport.

This Explainer was written by Arnaud Koehl and reviewed by Esin Serin.

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