The Rise of ‘Green’ Hydrogen

Hydrogen is set to play a more significant role as efforts to combat climate change becomes more urgent. it is abundant as an element and has great potential as a zero emission fuel. In particular, green hydrogen is a pure form of hydrogen produced via renewable energy sources, emits no carbon dioxide when converted into electricity.

Hydrogen’s role in energy energy transition . Hydrogen is a versatile non toxic and lightweight gas that can be stored transported and converted in green power. More importantly, it has the potential to decarbonize a wide range of sectors and the key to hydrogen success will most likely be tide to its adoption beyond the power sector in feedstocks for chemicals and end products, fuel for transport, and heat for buildings and Heavy Industries.

What is green hydrogen? Green hydrogen is a type of zero carbon fuel created from water via  renewable energy sources. It is significant as an alternative source of clean energy for manufacturing transportation, and more.

Hydrogen: from grey to green -Hydrogen’s potential can only be realized if its production first becomes carbon free. Approximatel,  98% of pure hydrogen produced globally today is generated via carbon intensive methods, using a natural gas or coal feedstock. So this is called ‘grey’ hydrogen. while the remaining 2% of global hydrogen is produced while electrolysis, a chemical reaction that cracks water into its constituent parts hydrogen and oxygen. if the electric current is powered by a renewable energy source like solar or wind the end result is a clean or ‘green’ hydrogen.

The hydrogen council expects global hydrogen demand to reach 546 million tons by 2050. This is up from 70 million tons today with a 6.4% annual growth rate. it is expected that the incremental demand for green hydrogen to stem from a variety of sectors which could pose investment potentials.

Hydrogen can be applied as a raw material for industrial usage. Around 52% of demand comes from the oil refining sector where it is used for this sulfurization, or the removal of harmful sulfur compounds that could be released into the environment. This reinforces hydrogen’s role as a critical component of the “clean fuels”. Another 42% of demand is for the production of ammonia, a basic agricultural fertilizer, and other chemicals. Hydrogen use in a chemical sector should expand while steelmakers and other industries are set to become new users.

Utility companies are considering green hydrogen as a clean alternative for natural gas as coal usage falls. Hydrogen can be blended into existing grid so households don’t need to upgrade appliances, which avoids the potential for any major structural transformation. it can also be injected into existing gas distributions to dilute the overall carbon footprint by up to 15%, with limited infrastructures investment needs.

Transportation. Hydrogen offers an alternative to battery-powered electric vehicles. a fuel cells and then onboard compressed hydrogen tank provide the power. But to date, most EV makers have chosen battery power, with hydrogen part of a longer-term strategy. While hydrogen for heavy duty transport segments is rapidly developing. Its high energy density and shorter refuelling times make it more attractive than batteries for long distance transport. Hydrogen buses and trucks are also gaining traction in China where they are account for over 95% of hydrogen vehicles.

Policy support for green hydrogen. The EU regards hydrogen as a key driver for the poles COVID-19 recovery. a former hydrogen strategy was enforced in July last year and includes foam targets for green hydrogen production by 2024 and 2030. A number of EU members countries have since adopted national strategies to promote and develop hydrogen in their respective economies driving for the granularity on targets. While over in China, the State Council of China forecasts that national sales of electric, plug-in hybrid and hydrogen powered vehicles would rise to 20% of overall new car sales by 2025 in November 2020. The State Council also advocates for technological improvements, constructions of more efficient electric vehicle charging networks and greener vehicles in support of the world’s largest automobile market.

Investors can expect the demand for green hydrogen across sectors and geographical regions to take off in the 2020s as global projects leveraging on the element increase in scale. Facing pressure to decarbonize, the most significant opportunities will come from oil and gas companies, which are also uniquely positioned to support green hydrogen production at a more cost efficient scale. A strong pipeline for electrolyzer projects could also provide the scale to substantially reduce production costs. But government support is still necessary and policy makers in Europe Asia and other regions are aligning supportive policies for climate ambition. Therefore it is expected hydrogen to become fully industrialized by 2030.

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