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Clean Hydrogen on the Path to Net Zero



Part 1 — Addressing the Carbon Gap


In this three-part Helixos Insights series on clean hydrogen and its potential role in supporting the world to achieve net zero emissions by 2050, we will explore the context of how our current global clean energy transition efforts are falling short of where we need to be to reach these targets, and how a massive upscaling of clean hydrogen could help us get back on track to reach these targets.

The three-part series will consist of the following:

  1. The carbon gap and how clean hydrogen can help fill it

  2. The current barriers and opportunities facing clean hydrogen as we aim for net zero

  3. How creating a global demand for clean hydrogen will be crucial for a hydrogen economy to succeed


The Carbon Gap


As global pressure mounts on governments and corporations to reduce their emissions and pledge commitments to net zero emissions by 2050, greater importance and urgency have been placed on seeking alternatives to fossil fuels that are clean, reliable, and affordable.


However, current global efforts in the uptake of clean energy sources are simply inadequate and lagging behind, which will prevent the world from reaching net zero by 2050. An International Energy Agency (IEA) report shows that the pledges by governments to date — even if fully achieved — fall well short of what is required to bring global energy-related carbon dioxide emissions to net zero by 2050. This is referred to as the carbon gap and will ultimately inhibit the world from even having a chance of limiting the global temperature rise to 1.5 °C and averting the worst effects of climate change.


A Global Energy Transformation


“Achieving net zero emissions by 2050 will require nothing short of the complete transformation of the global energy system.” — IEA Report

The power sector currently accounts for around 40% of energy-related CO2 emissions due to its heavy reliance on fossil fuels. Despite a large growth in renewable energy generation through policies and funding, the IEA claims this is still resulting in a higher use of fossil fuels, which is projected to be higher by mid-century than today, as shown in a Lucid Catalyst report. This increase in fossil fuel use is largely due to economic and population growth in developing countries. With huge global disparities in wealth, and 840 million people around the world today still not having access to electricity, energy demand in this projection rises by 1% a year with CO2 emissions not reaching a peak even by 2040.


To mitigate this increasing global energy demand, a clean energy transition is necessary that provides these developing nations with affordable, accessible and reliable clean energy alternatives to fossil fuels to support their economic growth. Electricity generation will need to reach net zero emissions globally in 2040 and be well on its way to supplying almost half of total energy consumption, which will require significant diversification and flexibility in the electricity system to ensure reliable supplies. The global deployment of clean technologies — such as solar, wind, hydro, geothermal, nuclear, fusion, and hydrogen — will be critical in ensuring a flexible and reliable electricity system.


However, the issue with a lot of these renewable technologies is that they currently face severe limitations in terms of reliability, scalability and affordability. This is particularly the case for such technologies as solar and wind, which are reliant upon weather conditions, limiting their ability to store generated energy during peak production cycles and pull from storage during down cycles.


Clean hydrogen and its versatile and scalable low-carbon energy carrier qualities could significantly reduce emissions and be the missing link to fill this carbon gap, serving as energy storage on grids with renewables, providing clean fuel for transportation, and in hard-to-abate industrial sectors.


Clean hydrogen — the missing link


“Hydrogen is today enjoying unprecedented momentum. The world should not miss this unique chance to make hydrogen an important part of our clean and secure energy future.” — Dr Fatih Birol, International Energy Agency.

Hydrogen is an energy carrier that can be used to store, move, and deliver energy produced from clean sources of energy. Today, hydrogen has several industrial uses, including oil refining, ammonia production, methanol production, and steel refining.


Due to being clean, flexible, storable and safe, hydrogen provides a huge opportunity to supplement the current limitations of other renewable energy sources in the electricity grid and fill the carbon gap. In particular, it is projected to play a key role in decarbonising the energy, industrial, and transportation sectors by powering long-haul freight vehicles, airplanes, steelmaking, and domestic heating.


Hydrogen Applications


Hydrogen applications in the industry, transport and power sectors.


Hydrogen can also store a large amount of energy compared to other sources. The CSIRO states that each kilogram of hydrogen contains about 2.4 times as much energy as natural gas. The only input needed to release this energy is oxygen and the only output is water. This means, that as an energy source, clean hydrogen produces zero greenhouse gas (GHG) emissions, which is what translates to its exciting potential as an emerging source of clean energy.


However, not all hydrogen is the same, and the way it is produced directly influences how clean it is. Producing hydrogen from water is done via a process called electrolysis, where an electric current is passed through water, separating the hydrogen from the oxygen. This method, however, requires the input of large amounts of energy to break these strong molecular bonds and is only 60–76% efficient, with further energy losses occurring when hydrogen is stored, compressed, or converted to other fuels. The energy sources used to break these molecular bonds are what determine whether the hydrogen is clean or not. When electrolysis is powered by clean energy — such as solar, wind, geothermal, and nuclear — the hydrogen produced is considered ‘clean’ as its production process does not emit carbon back into the atmosphere. When hydrogen is derived from fossil fuels, such as steam methane reforming of natural gas or electrolysis powered by a predominately coal-fired grid, then it isn’t considered clean unless the carbon emissions are captured and stored.


Only 1% of hydrogen produced today is clean — via electrolysis or with carbon capture, utilisation, and sequestration (CCUS)



Breakdown of hydrogen production in 2020 via fossil fuels, fossil fuels with CCUS and electrolysis.


Currently, close to 99% of hydrogen produced is through emissions-intensive methods, such as natural gas reforming and coal gasification, with almost all of the remainder being by-product hydrogen produced in facilities designed for other products. Natural gas accounts for around three-quarters of the annual global dedicated hydrogen production of around 70 million tonnes, which releases significant emissions. The IEA estimates that global hydrogen production currently releases 830 million metric tons of CO2 per year, equivalent to 2.2% of energy-related emissions.


These statistics indicate that, at present, clean hydrogen has a very limited role in the global energy mix, with only 1% being produced via electrolysis or with carbon capture (CCUS). However, this massive gap in the market represents a promising opportunity for countries across the world to upscale their clean hydrogen efforts, with clean hydrogen derived from electrolysis via clean electricity expected to expand 44% by 2030 in order to reach net zero goals by 2050.


However, currently planned clean hydrogen electrolysis projects only amount to a production of 8.3 Mt (million tonnes) of hydrogen by 2030. An additional 72 Mt of production will be needed to meet clean hydrogen demand by 2030 in order to get us on the path to net zero by 2050. At a low target price of $1 per kg of hydrogen, this presents an unfulfilled global opportunity of US$72B for electrolytic clean hydrogen. An additional 780 GW of electrolyser capacity, and the associated clean electricity to power it, would be required to meet this demand.


780 GW of additional electrolyser capacity, and the clean electricity to power them, will be needed to meet clean hydrogen demand in 2030.




Global hydrogen demand and electrolyser capacity projections for 2030.


However, there are a number of challenges and barriers that currently prevent countries from upscaling their clean hydrogen efforts, such as high production costs; storage, transport, and distribution considerations; and safety concerns. We will explore these challenges and barriers in more depth in the next Insights post, as well as shine light on the current hydrogen global market and its future economic and environmental opportunities, and recommendations on how this industry could be optimised to play a key role in helping us achieve net zero by 2050.



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