The Role of Clean Hydrogen for Sustainable Development
Clean hydrogen can be produced from various sources, including fossil fuels with carbon capture and storage (CCS) (known as low carbon or “blue” hydrogen) and renewable hydrogen (also known as green hydrogen). Clean hydrogen is widely seen as a key component to the energy transition and can be a solution for hard-to-decarbonize sectors. This includes industrial processes such as iron and steel making, production of ammonia and methanol. Clean hydrogen and its derivatives can also be used in the transportation sector for aviation, shipping, and heavy-duty vehicles.
Recent net zero scenarios suggest that clean hydrogen can account for 5 to 15% of energy services by 2050. As such, hydrogen demand would increase fivefold from around 100 Mt today to 500 Mt per year. However, current hydrogen production must change its production processes, as today only 2% is clean hydrogen. Today’s hydrogen production represents 2-3% of today’s energy greenhouse gas emissions). To meet global climate goals, clean hydrogen production will have to grow to 40 Mt by 2030. Thus, today’s levels of clean hydrogen production must increase 20-fold through 2030, and another 12-fold between 2030 and 2050.
A hydrogen economy would change the geopolitics of energy and could become an engine for sustainable economic growth in emerging markets and developing economies (EMDCs). Several EMDCs are well positioned to become first movers in the development of this new value chain.
Clean hydrogen is seen as a key opportunity for sustainable development. More than 1000 clean hydrogen projects are under development worldwide. However less than 10% has reached final investment decision stage, and just a handful of these projects are in emerging markets and developing countries (EMDCs). World Bank estimates global financing needs amount to USD 25 trillion between now and 2050, with 25% to 50% of financing needs in EMDCs.
Relevance of Hydrogen
The new hydrogen economy will not just be global, it must be used as a major economic development opportunity for low- and middle-income nations and promoting shared prosperity. It can also generate socioeconomic benefits as derived from other energy industries, such as fossil fuels. As such, it can be a basis for sustainable development. The socioeconomic impacts due to the clean hydrogen industry on countries and their economies can be diverse. The clean hydrogen industry can have positive effects on national GDP growth and improve the trade balance. Further, from a social perspective, the development of the clean hydrogen industry will likely enable new job creation upstream and downstream and serve as a development engine for these economies.
Renewable hydrogen and its derivatives can be used as an energy carrier, feedstock, or fuel to replace current grey hydrogen consumption in existing industrial applications helping EMDCs decarbonize their productive industries. Moreover, clean hydrogen has the potential to pioneer in new industries and usages, such as heavy-duty trucks, long-haul transport, production of synthetic fuels and electricity storage. For example, clean hydrogen used for heavy-haul mining trucks may help reduce 35 percent of the CO2 emissions caused by open-pit mining, as one of these trucks consumes 3,000 liters of diesel and generates 8 tons of CO2 emissions a day. In South Africa, the first mining trucks are being retrofitted from a diesel-powered engine to a hybrid green hydrogen fuel cell combined with a battery pack to provide power. Another new use of clean hydrogen and ammonia is maritime transport. The shipping industry has recognized these fuels as the most promising zero-carbon bunkering options for oceangoing vessels. Clean hydrogen can also be used to produce synthetic fuels (i.e., e-gasoline, e-kerosene, or e-methanol) by combing hydrogen electrolysis with certain CO2 capture and use technologies, and in the case of producing e-gasoline, it is simultaneously compatible with existing liquid fuel infrastructure.
Clean hydrogen’s role as a form of energy storage for the electricity sector can serve power generation during periods when VRE generation is low, and coupled with batteries, it has the potential to enhance the integration of renewables by providing flexibility for large-scale renewable deployment. The Advanced Clean Energy Storage hub in Utah is an example of such deployment. Hydrogen storage could therefore emerge as a widely deployable solution to mitigate renewable seasonal variability and to maximize renewable use in a national energy system.
HOW DOES THE GREEN HYDROGEN WORK?
Source: New York ISO.