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Executive Overview
While hydrogen may be described as a clear or transparent gas, a lot of recent news coverage and media hype is neither clear nor transparent in its treatment of underlying political issues and looming economic and technical hurdles standing in the way of hydrogen meeting the high expectations of those who see it as a solution to climate change. This strategy report aims to dispel misplaced optimism and counteract greenwashing by shedding light on the most likely trajectories and obstacles for the development of hydrogen production, transportation, storage, and applications.
There is no avoiding the need to drastically reduce the consumption of hydrocarbons in electric power, transportation, commercial buildings and industry sectors. This report will show the driving forces for hydrogen and provide an understanding of how and when hydrogen will play a role. There is a combination of political, economic, and technical issues that influence the hydrogen markets, and there are similar complex issues in the utility, industrial, building, and automotive sectors that will determine where hydrogen will be a practical solution. Hydrogen is only a small part of the overall energy transition.
As of Feb 2022, China is the largest producer of hydrogen today, at about 25 million tons (Mt), or roughly a quarter of the global total. Currently, the vast majority of hydrogen is produced from fossil fuels, as seen in the figure below. The main uses are for making ammonia, and for desulfurization and hydrocracking in refineries.
The growth driver for hydrogen’s potential GHG emission reduction role depends on development of an energy system that substantially eliminates the emission of greenhouse gases like CO2 and methane. It is highly unlikely that any economical and scalable technology for removing methane and CO2 from the atmosphere can be developed in the near future. The reason is that methane concentration is only about 2 ppm and CO2 is about 420 ppm in the atmosphere, both of which are so dilute that simply moving enough air through a machine to collect this would itself take enormous energy, never mind the difficult separation and handling of these collected gases. These thermodynamic limitations lead to a system design where hydrogen made without emitting carbon must be the starting point for a hydrogen energy system. This hydrogen will be so called “green hydrogen” as described in this report.
Such a system is shown in the figure below:
The world's largest green hydrogen project will be built in Egypt in 2023 and will have a 100MW electrolyzer. It will be five times larger than the current record holder (Air Liquide in Canada). U.S.-based Plug Power will supply the 100MW polymer electrolyte membrane (PEM) electrolyzer for the project. It is designed to produce 90,000 metric tons of green ammonia per year at chemical company Egyptian Basic Industries Corporation’s existing ammonia plant in Ain Sokhna, a coastal town on the Gulf of Suez.
Achieving global net-zero emissions by 2050 will require about 306 million metric tons of green hydrogen derived from renewable energy each year, according to the International Energy Agency (IEA) report, Net Zero by 2050 – A Roadmap for the Global Energy Sector.
By 2050, the world will use 50 percent more energy than today, and due to increased electrification across industrial sectors and developing economies, the world will also use 3 times the amount of electric power. According to the IEA, achieving net zero means a huge decline in the use of fossil fuels, with a fall from almost four‐fifths of total energy supply today, to slightly over one‐fifth by 2050. While the combustion of fossil fuels will have been severely curtailed, the use of oil and gas and other petroleum products in 2050 will be dominated by petrochemical applications, where the carbon is embodied in the product such as plastics, in facilities fitted with CCUS, and in sectors where low‐emissions technology options are scarce. As such, hydrogen use in the oil refining sector will fall, but new uses in ammonia, steel, cement, and other uses will grow.
IRENA, IEA, and IPCC reports all predict that hydrogen will play a critical role in our transition away from fossil fuels if we are to curb global warming. Atmospheric CO2 levels have passed 420 ppm and the resulting impacts on climate have already had huge economic costs due to weather changes. Along with burning of rain forests and other activities, humans have put the world into the 6th great extinction event. It is unlikely that people can plant enough trees, or find a practical technology to take this CO2 out of the atmosphere, so the best path is clearly reducing the problematic carbon emissions and tolerating the unavoidable resulting global temperature rise that has already been burned in. The recent IPCC 2022 Mitigation of Climate Change report issued 4 April 2022 is a rather long read. The following are comments by Kimberly Nicholas at www.wecanfixit.com. “Our planet is warming, and we are sure that it is caused by us. It’s bad, but we can fix it if we try.”
Hydrogen will be essential to upgrade steel, ammonia, and cement manufacturing processes, which represents some 14 percent of the world’s CO2 emissions. In the areas of transportation, building HVAC, and grid energy storage, hydrogen faces a challenging competition.
Hydrogen is not found as a natural resource, so it is used for energy storage like a battery or as an energy-dense feedstock for industrial processes. If the overall goal is to reduce CO2 emissions, then the production processes for making hydrogen matter enormously. Gray hydrogen is clearly unsatisfactory as an environmental solution. Burning fossil fuels like coal, oil, or natural gas to make electric power or to make hydrogen by electrolysis result in a net increase in carbon emissions. Using electrolysis for hydrogen with the power sourced from renewables or nuclear is the most likely path for the future of the low carbon hydrogen economy.
- Gray – Natural gas reforming without carbon capture (Steam Methane Reforming or Coal gasification)
- Green – Made from renewable electric power (electrolyzers)
- Blue – Natural gas reforming with carbon capture
- Turquoise – Natural gas making solid carbon products
- Pink – Nuclear power with electrolyzers
- Yellow – Solar power with electrolyzers
- White – out of the ground
The World Nuclear Association suggests, the evolution of nuclear energy's role in hydrogen production over perhaps two decades is seen to be:
- Cold electrolysis of water, using off-peak capacity (needs 50-55 kWh/kg).
- Low-temperature steam electrolysis, using heat and electricity from nuclear reactors.
- High-temperature steam electrolysis, using heat and electricity from nuclear reactors.
- High-temperature thermochemical production using nuclear heat.
In addition, nuclear heat can assist the process which provides most of the world's hydrogen today:
- Use of nuclear heat to assist steam reforming of natural gas (methane).
The following excerpt from the paper on “How Green is Blue Hydrogen” illustrates that Blue Hydrogen is unlikely to be an effective solution.
Far from being low carbon, greenhouse gas emissions from the production of blue hydrogen are quite high, particularly due to the release of fugitive methane. For our default assumptions (3.5% emission rate of methane from natural gas and a 20-year global warming potential), total carbon dioxide equivalent emissions for blue hydrogen are only 9%-12% less than for gray hydrogen. While carbon dioxide emissions are lower, fugitive methane emissions for blue hydrogen are higher than for gray hydrogen because of an increased use of natural gas to power the carbon capture. Perhaps surprisingly, the greenhouse gas footprint of blue hydrogen is more than 20% greater than burning natural gas or coal for heat and some 60% greater than burning diesel oil for heat, again with our default assumptions. In a sensitivity analysis in which the methane emission rate from natural gas is reduced to a low value of 1.54%, greenhouse gas emissions from blue hydrogen are still greater than from simply burning natural gas and are only 18%-25% less than for gray hydrogen. Our analysis assumes that captured carbon dioxide can be stored indefinitely, an optimistic and unproven assumption. Even if true though, the use of blue hydrogen appears difficult to justify on climate grounds.
Table of Contents
- Executive Overview
- Hydrogen Production, Compression, and Distribution
- Transportation, Energy Storage, Building HVAC, and Industry
- Regional Hydrogen Development
- Recommendations
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