Energy Sustainability: The Emerging and Effective Use of Hydrogen

Climate change and the dangers posed to the environment by increasing levels of CO₂ have led to a greater focus on a non-polluting energy source: renewable hydrogen. Described as the “most abundant clean fuel in the universe,” the application of hydrogen as a fuel for transportation, including plans for a hydrogen-powered aircraft in the next decade, and growing uses in everything from ammonia fertilizers to shipping, indicate its renewable clean qualities are an attractive alternative to carbon-based fuels.

China and India are frontrunners to become world leaders in the use and export of clean hydrogen, with China consuming and producing more hydrogen than any other country at more than 24 million tonnes a year. Meanwhile, India has announced its plan to invest 2.3 billion in green hydrogen energy development.

In the U.S., the Department of Energy Hydrogen Shot program aims to reduce the cost of hydrogen by 80% to $1 per kilogram in one decade, and its recent landmark Inflation Reduction Act (IRA) provides $369 billion to accelerate the deployment of clean energy technologies such as green hydrogen. Europe is at the forefront of commercializing hydrogen, where Germany and France are investing millions of euros to develop a project with an advanced hydrogen turbine that does not require the use of fossil fuels.

In addition to government efforts, companies like Airbus and ZeroAvia are tackling the transition to zero-emission aviation through the development of hydrogen-electric engines for airplanes. There are challenges with this energy source, especially related to reducing the cost of hydrogen applications, but individuals, organizations, and policymakers can make a difference when they are informed and prepared to act regarding renewable hydrogen’s possibilities.

The Current Global Impacts of CO₂ Emissions

Capital allocation centered around energy transition, such as the Green Deal, are gaining momentum and instigating advancements to grow renewables, develop new energy carriers, improve energy efficiency, reduce emissions, and create new markets for carbon and other byproducts as part of an increasingly circular economy. These efforts are underway with the key pillars of decarbonizing global energy being energy efficiency, behavioral change, electrification, renewables, hydrogen, and hydrogen‐based fuels. While decarbonization efforts are increasing, there are still obstacles along the way.

Complexities of current energy uses, scope, supply chain, and infrastructures result in high costs and challenges when transforming energy efforts. The COVID-19 pandemic and the current energy crisis worsened by trade impacts following Russia’s invasion of Ukraine have rapidly increased the need for new energy solutions. The International Energy Agency’s (IEA’s) World Energy Outlook 2022 reports that 70 million people who recently gained access to electricity are likely to lose the ability to afford that access due to rapidly rising energy costs. These economic impacts send energy innovations backward, rather than toward progress. In fact, 100 million people may no longer be able to afford the energy costs required to cook with clean fuels, regressing toward increased negative impacts on the environment.

Use disparity across varying countries, demographics, and financial standings further results in the debate about who holds responsibility to address decarbonization across governments, individuals, and global impact. Fundamentally, emissions are a collective problem, so decarbonization requires a collective effort. It also requires dedicated leadership with an actionable plan to create viable renewable energy solutions for businesses and individual users alike. A vital element of reaching that solution comes in the form of hydrogen.

Opportunities for Hydrogen to Sustain Energy Transition

Hydrogen is the most abundant chemical element that, when consumed, results in water byproduct. Goldman predicts clean hydrogen will be a $1 trillion market largely due to its abundance, low emissions, and rising technologies.

Hydrogen can be produced from a variety of local and domestic resources, such as natural gas, nuclear power, biomass, and renewable power like solar and wind. Today, hydrogen fuel can be produced through several methods that can offer energy sovereignty. The most common methods are electrolysis and a thermal process known as natural gas reforming. Other methods include solar-driven and biological processes.

Most hydrogen today is produced using natural gas, or methane, resulting in the emission of greenhouse gases (GHGs). This is known as “grey” hydrogen while “green” hydrogen relies on energy from renewable sources such as wind or solar and is emissions-free. These qualities make it an attractive fuel option across a variety of functions such as in cars, in houses, for portable power, and in many more applications. While the costs of hydrogen are still impacted by inflation, environmental, and geopolitical impacts, alongside the cost of inputs such as natural gas or renewable electricity, the long-term development of global hydrogen demand in tandem with infrastructure construction is meant to accelerate affordable trade and transportation of hydrogen in necessary quantities by 2030.

Hydrogen as a future solution is nearer on the horizon than one may think. Moreover, it is a key element of the IEA’s net-zero scenario that aims to bring global energy-related carbon dioxide emissions to net zero by 2050. The IEA’s flagship report outlines a 400-point plan to decarbonize the global economy, including hydrogen and hydrogen-based fuels to fill the gaps where electricity cannot readily replace the demand or capabilities of fossil fuels, such as in large-scale transportation or heavy industries including steel, chemicals, and large manufacturing. Nine countries that cover about 30% of global energy sector emissions released their national hydrogen strategies in 2021 and 2022, committing their efforts to transition to a net zero energy system by 2050.

Europe is leading the hydrogen transformation, and adoption of hydrogen and other renewable resources. Its needs are heightened due to the hard-hitting effects of the Russian-Ukraine War, but the impacts also spread globally. Germany holds the leading position for distribution, with almost 100 stations located along the motorway arteries, making it possible to travel within the country on hydrogen. Bavarian company Kelheim Fibers aims to be one of the first large companies in the world to switch to hydrogen entirely. In Paris, hydrogen is produced locally. This allows regional companies, such as the taxi network Hype, to run efficiently with a low carbon footprint. Hype’s goal is to power half of its fleet by hydrogen by 2024, which is achievable due to France’s investments in hydrogen infrastructure.

Naturally, the pressures of the energy crisis aren’t limited to Europe and restructuring is a global commitment. In India, where hybrid work, increased heatwaves, and economic recovery has led to heightened energy demand, the country is driving technology innovation to implement green solutions. Recently passing an incentive plan of 174.9 billion rupees ($2.11 billion) to promote green hydrogen, India is on a path to become a major exporter in the field. Domestically, Indian Railways is prototyping a hydrogen fuel–based train with the goal to transform their heritage routes to completely green with hydrogen-fueled trains by December 2023. China also recently introduced hydrogen-fueled trains that have a range of 600 kilometers on a single tank.

The Future of Hydrogen Solutions and What Needs to Change

The IEA’s most recent Hydrogen tracking report proposes that low-emission hydrogen production will account for more than half of global hydrogen production by 2030. For green hydrogen production, the IEA proposed that two-thirds of this production be based on electrolysis, and the other third produced from fossil fuels offset by carbon capture, utilization, and storage (CCUS). This demands more investment from organizations and government entities in CCUS technologies alongside electrolysis facilities and infrastructure that can address output demand.

While the IEA leads transformation efforts with its net-zero roadmap, other entities are instigating innovation across technology and leadership. For example, the European Clean Hydrogen Partnership launched its 2023 call for proposals. A total of €195 million will be made available for projects that support the creation of clean hydrogen technologies. Similarly, the Hydrogen Initiative from Clean Energy Ministerial focuses on the successful deployment of hydrogen within current industrial applications across all aspects of the economy. Its H2 Twin Cities Initiative connects cities and communities around the world to innovate and deploy clean hydrogen solutions.

In tandem with these efforts, solutions are still needed for the adoption of hydrogen to be cost-effective, safe, and beneficial to the environment and economy. The future of hydrogen is a capital-intensive, complex process that requires several key elements, which include:

• Dedicated leadership, global collaboration, and a well-communicated, actionable plan. This is true both at an organizational level and a policy level. Regulations and strategic benchmarks are required to keep combined efforts aligned and distributed fairly. Organizations, governments, and global entities will need to commit to a growth-oriented mindset to instigate widespread change, including incentivizing innovation. For instance, the U.S. passed the IRA in 2022, the largest piece of federal legislation ever to address climate change. Alongside other strategies to reduce inflation, the act will invest $391 billion in provisions relating to energy security and climate change, including $270 billion in tax incentives. Champions of hydrogen energy solutions can raise awareness of new opportunities while organizational leadership must transparently communicate energy transformation goals and next steps from top to bottom.
• Safe and cost-effective compression, storage, and transportation of hydrogen gas, requiring pipelines, infrastructure, and technology development. Hydrogen can be transported as a pressurized gas or a cryogenic liquid. To pressurize and transport hydrogen safely and at a large scale, it demands specialized technology at centralized manufacturing sites remote from the user points. That includes large central station plants or midsize plants for regional markets and at distributed manufacturing sites such as vehicle filling facilities. Investment in localized energy infrastructures offers new levels of energy sovereignty. Since hydrogen can be produced using a wide variety of resources from biomass, hydro, wind, or solar, to geothermal, nuclear, or coal and natural gas with CCUS, it enables local energy production solutions almost anywhere in the world.
• Alignment of governmental regulations that tax carbon emissions and energy consumption fairly. Without a price on carbon emissions, grey hydrogen remains less costly than green hydrogen, intensifying the challenge of improving environmental sustainability. Taxes and regulations can help this. Use disparity must be accounted for to sustain equal and abundant energy solutions across diverse, global communities. Consider that the average energy consumption per person in sub-Saharan Africa, excluding South Africa, is 185 kWh a year, compared to approximately 6,500 kWh in Europe and 12,700 kWh in the U.S. The countries at the forefront of energy consumption must also be the ones at the forefront of renewable energy solutions. Hydrogen is one of the resources that can best address use disparity and carbon emission responsibility by providing countries of any location with a local energy source.

Hydrogen Is One Key to a Wide Tapestry of Future Renewable Energy

It’s undeniable that hydrogen presents opportunities for sustainable energy solutions in the future, but there’s still progress to be made. Hydrogen, like any fuel or power application, relies on highly involved technology and ongoing research to get the most benefits from this power source. Many of the challenges facing hydrogen pertain to infrastructure, which requires time and money, but policymakers, businesses, and innovators are rapidly understanding the benefits of dedicated efforts to make hydrogen energy a viable option. Regardless of the challenges, it is clear that hydrogen is already on the path to offering a promising future for energy sustainability.

—Nishant Tiwary ([email protected]) is a global energy transition and climate finance expert. A research scholar at IIT Delhi, he is a John F. Kennedy Fellow at Harvard Kennedy School and a Jack McDonald Fellow in investments and finance at the Graduate School of Business Stanford. As an officer on special duty to the Union Cabinet Minister of Power and Renewable Energy of India, he led the national investment strategy and programs on hydrogen, electric vehicles, storage, energy efficiency, solar, and wind, impacting 1.4 billion citizens. Nishant is an advisory council member at Harvard Business Review (HBR) and serves on the United Nations Global Task Force on Digitization of Electricity in Europe.