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The World Map of Hydrogen

Author: Tania Songini

Published: 07 Sep 2021

Tania Songini delves into the complicated world of hydrogen.

“Code red for humanity” – the IPCC’s report stresses the urgent need to decarbonise our economies. Hydrogen will be a key energy source on the path to Net Zero, as it does not emit CO2 when used. Hydrogen and its derivatives can be used in energy intensive industries, as fuel for transport, rail and aviation, for heating, and as a means for storing renewable energy.

There is strong debate around ‘blue’ versus ‘green’ hydrogen, and whether ‘blue’ hydrogen will actually contribute to decarbonisation.

‘Green’ (carbon free) hydrogen is produced by splitting water into hydrogen and oxygen, through electrolysis using renewable energy.

‘Blue’ (lower carbon) hydrogen is produced through ‘‘reforming’’, which converts hydrocarbons into hydrogen and CO2. The latter is sequestered with carbon capture technology (capturing 60-90% of CO2) and then transported to depleted oil or gas fields where it can be stored.

The main challenge with ‘green’ hydrogen remains its price, between USD 2.50 and 7.00 per kg, versus 1.40 to 2.50 for ‘blue’, and 0.90 to 1.70 for ‘grey’ (carbon emitting) hydrogen from natural gas. Closing the price gap will require a rapid scaling up of ‘green’ hydrogen globally over the coming decade and beyond.

H2 ambitions in the UK…

The UK’s ambitious hydrogen strategy promotes both ‘blue’ and ‘green’ hydrogen projects. The HyNet project in NW England is a good example of ‘blue’ hydrogen production in an integrated industrial cluster context decarbonising local heavy industry. The hydrogen could also be used for mobility purposes (fuel cell buses, trucks and trains) and eventually for home heating. Local salt caverns could provide inter-seasonal hydrogen storage. Projects such as Humberside’s 100 MW Gigastack will act as a blueprint for deploying large scale ‘green’ hydrogen electrolyser technology powered by offshore wind.

…and in Europe

The European Green Deal and the Hydrogen Strategy (calling for EUR 470 billion in investments by 2050) have set the stage for a scale up of hydrogen. The recent ‘Fit for 55’ climate legislation targets 50% ‘green’ hydrogen in the share of hydrogen fuels used in industry by 2030. Support mechanisms include: the Innovation Fund (EUR 118 million) and Important Projects of Common European Interest (IPCEI).

The focus will be on increasing electrolyser capacity for ‘green’ hydrogen production and expanding its use to industrial sectors and transport. Repurposed and new gas networks will eventually distribute hydrogen more widely.

Europe is targeting 40 GW of electrolyser capacity by 2030, and 40 GW of imported hydrogen. Norway and the Netherlands are pursuing both ‘blue’ and ‘green’ hydrogen. Southern Europe is prioritising the scale up of ‘green’ hydrogen production, given its high solar irradiance. Germany is focussing on local ‘green’ hydrogen production and will also be importing from the Middle East, North Africa, Australia, Chile, and Ukraine.

But what is happening in the rest of the world?

Let’s start with the heavyweights…

China, the largest hydrogen producer in the world, will need an estimated 130 million tonnes by 2050. Its latest 5-year plan promotes the growth of multiple hydrogen applications and new production capacity is increasingly ‘green’. Investments have been made in vehicle hydrogen fuel cell production and 1,000 refuelling stations are planned by 2025.

Russia is exploring all hydrogen options: ‘blue’ in its oil and gas regions; ‘green’ in areas with hydropower; ‘yellow’ with nuclear powered electrolysis. It plans to export ‘blue’ hydrogen from the sub-Arctic region. Far East Kamchatka aims to develop ‘green’ hydrogen from hydro power aimed at export to Japan.

The USA has made slow progress due to strong resistance from its oil and gas sector. Its return to the Paris Agreement means we are likely to see a growth of ‘blue’ hydrogen production around ports. California leads in ‘green’ hydrogen efforts and plans 1,000 hydrogen refuelling stations by 2030. Recent national legislation will help accelerate the affordable production, transport, storage and use of cleaner hydrogen.

In India, the growth of hydrogen has been driven by industry, e.g. Indian Oil Company, Reliance, who are looking at ‘blue’ hydrogen. The public private India H2 alliance will support industrial cluster decarbonisation and the adoption of (subsidised) fuel cell transport technologies.

The pioneers…

Japan and South Korea were the first to talk about a hydrogen economy and have focussed on industry and transport to decarbonise at scale.

Japan’s projected hydrogen requirement of 3 million tonnes by 2030 and 20 million by 2050, means it will need to rely on hydrogen imports. It has committed USD 3 billion to develop an international hydrogen supply chain. Japan’s largest power company has long term plans to generate power with ‘green’ hydrogen and ammonia (a hydrogen and nitrogen compound). Imported hydrogen will be transported by ship after being converted into a hydrogen carrier, such as ammonia. Japan is investing in carrier vessels and developing ammonia as a ‘green’ shipping fuel.

South Korea’s industrial conglomerates plan to invest USD 38 billion in hydrogen technology by 2030.

China, Japan and South Korea are leaders in fuel cell technology and are shifting increasingly towards hydrogen cars, trucks and buses, and rolling out refuelling infrastructure. The hydrogen fuel cell supply chain is similar to that of an internal combustion engine, a significant advantage versus electric battery vehicles.

Which countries will be the biggest hydrogen producer-exporters?

Australia, New Zealand and Middle Eastern countries are signing partnership agreements with Japan, South Korea and Germany and are well placed to become hydrogen power houses.

Australia has budgeted USD 1 billion to develop ‘green’ hydrogen hubs, a clean hydrogen certification scheme and carbon capture and storage infrastructure.

Victoria’s Latrobe Valley’s ‘blue’ hydrogen will be shipped to Japan. The Pilbara region of Western Australia will see the development of the first 15 GW (eventually 26 GW) of the Asian Renewable ‘Green’ Hydrogen Hub project.

In the MENA region, given its abundance of sun and wind, vast expanses of land, capacity for large scale production and established trade routes, prices for ‘green’ hydrogen are tipped to become the lowest in the world at ca. 1 USD per kg.

Saudi Arabia’s USD 5 billion NEOM project will develop a 4GW ammonia production plant for export, using wind and solar power. Air Products will be the exclusive off-taker, providing fuel for buses and trucks in Japan and Europe. Saudi Aramco is already shipping ‘blue’ ammonia to Japan.

UAE’s Mubadala Investment and Masdar have partnered with Siemens Energy to grow local ‘green’ hydrogen production and manufacturing of synthetic, low carbon aviation and maritime fuels.

Through the MENA Hydrogen Alliance, European countries are also partnering with North African countries to support the transition to ‘green’ hydrogen and utilise existing gas pipelines into Europe. Germany is also supporting the development of a ‘green’ hydrogen value chain in Africa.

A few closing words…

The growing commitment to low carbon, particularly ‘green’, hydrogen is encouraging and will help rapidly increase both supply and demand.

Numerous challenges remain though: pricing, the sheer scale of renewables needed to power electrolysis, and how the hydrogen can be safely and affordably transported across the world…

Financing electrolysers and vessels remains a challenge though, given the technology risks associated with the limited experience with this type of infrastructure. To really leverage the benefits of hydrogen applications and attract private capital, significant grants, subsidies and longer-term financing are required. The recent MOU between Japan’s Export and Investment Insurance and the European Bank for Reconstruction and Development, to combine their expertise in green financing, will hopefully lead the way for wider initiatives of this kind.

Source: some of the facts and figures mentioned in this article are drawn from the ‘World Hydrogen Leaders’ platform events and content.

*The views expressed are the author’s and not ICAEW’s.