In recent years, the potential role of clean hydrogen in achieving net zero has captured the attention of policymakers and industry players around the world. In 2020 alone, nine governments have published strategies earmarking a role for clean hydrogen in everything from buses to power generation. Industry initiatives have promised the likes of hydrogen-powered jet engines and hydrogen-heated homes.
In Mexico, the Mexican Hydrogen Association believes the hydrogen industry has the potential to attract US$60 billion in investment and could generate 3 million jobs in Mexico.
The hype around hydrogen has reached such a fever pitch that it would be easy to forget that less than 1% of current global hydrogen production is currently clean. In most modelled scenarios for net zero, clean hydrogen is expected to remain sufficiently expensive throughout the 2020s and its deployment would require careful prioritization.
However, it does have a role. The International Energy Agency has modelled that clean hydrogen could support 6% of the cumulative global emissions reductions required to achieve net zero.
But what do we mean by “clean hydrogen?”
It is often overlooked that hydrogen is already produced and used across the world. However, this “gray” or “black” hydrogen (commonly used to refine oil and produce chemicals) generates significant CO2 emissions as a by-product. These total emissions equal the entire annual carbon emissions of the UK and Indonesia combined.
Clean hydrogen, on the other hand, is produced using processes that emit very low or no carbon. Clean hydrogen is either “blue” (where the emissions are captured and stored) or “green” (produced entirely using renewable energy). The exciting thing about clean hydrogen is that it could be used not only to decarbonize the world’s current polluting forms of hydrogen production, but it could also be applied in new ways to sectors that currently rely on fossil fuels, such as shipping and aviation.
As a first step, existing users of gray hydrogen must deliver an urgent switch to clean hydrogen, for instance through quotas or targets. There is also a role for industry players to come together to explore innovative ways of reducing the end-to-end costs of clean hydrogen production. The Carbon Trust is playing a leading role in this in the UK, where our Clean Hydrogen Innovation Program is being backed by the UK government.
However, clean hydrogen is not a silver bullet; there are some sectors where it should not be prioritized for use. A good example is home heating, where in the UK a debate rages on whether electrification or hydrogen should be pursued as the primary route to decarbonization.
When taking a systems-led view, the answer is clear. The overwhelming majority of evidence indicates that hydrogen boilers would be less efficient and more expensive to run than electrified heat, such as heat pumps. The promise that clean hydrogen might provide a cheaper, more efficient heating solution should be approached with caution, as it risks derailing system-led efforts. Cars for personal use are another good example. Hydrogen fuel-cell vehicles are unlikely to ever deliver the efficiencies of electric vehicles. Instead, efforts should remain focussed on scaling the infrastructure to support electric charging.
Where clean hydrogen holds greater promise for net zero is when it is deployed in sectors for which a mature electrification solution does not already exist. Take steel manufacturing for example. Coal-fired blast furnaces used to produce steel currently account for a significant proportion of industrial emissions, but clean hydrogen could be used as a replacement reducing agent. Other challenging sectors, such as long-haul aviation and shipping, are almost impossible to electrify due to fundamental limitations of battery-technology. Clean hydrogen and hydrogen-derived fuels could support decarbonization of these sectors, although there is a real need for innovation and cost reduction to make it scalable and to de-risk investment.
On the point of investment, another question that is often raised is whether industry should be investing in blue or green hydrogen production. In a net-zero world, only green hydrogen has a role as blue hydrogen production continues to emit some carbon. Especially in countries with rich renewable energy potential, blue hydrogen should not be the focus of investment.
Mexico has made progress in recent years on the incorporation of green hydrogen into national planning instruments. This arises from a growing recognition of Mexico's strategic position in the global hydrogen market and its renewable resources. According to the report, Green Hydrogen in Mexico: The Potential for Transformation, published by the German Cooperation Agency, Mexico has the potential to reap economic benefits from a global clean hydrogen market. It could do this by producing electrolyzers and fuel cells, hydrogen turbines, conditioning and transportation equipment, as well as storage facilities. It estimates that Mexico's solar and wind resources could support the installation of up to 22 terawatts of electrolysis. This network could produce green hydrogen at an average cost of US$1.4/kg in 2050. In its Business Plan 2023-2027, PEMEX also acknowledges the extensive potential of green hydrogen in hydroprocessing of methanol and fertilizers. This has the potential to produce approximately 1.4 million tons of green ammonia.
While renewables and electrification would deliver the most significant emissions reductions required for net zero, clean hydrogen is increasingly recognized as one of several early-stage technologies critical for decarbonized economies. However, the reality is likely to be that the role of clean hydrogen will be limited to a few applications and any attempt to distract from this could undermine the system-wide transition to net zero. That’s why it's time to cut through the hype on hydrogen. Much like other aspects of the global net-zero transition, clean hydrogen doesn’t hold all the answers to the climate crisis. Solving the greatest threat to our planet is just a bit more complicated than that.