As so often, however, there is a slight hitch.\u00a0 At present, some 95% of hydrogen consumed globally utilizes fossil fuels somewhere in the production process.[1]<\/a>\u00a0 The most popular method, Steam Methane Reforming (SMR), requires high-pressure high-temperature steam – the sort of energy source that only fossil fuels can currently supply and a serious drawback for hydrogen\u2019s green credentials.<\/p>\n Yet the innovators of a future \u2018hydrogen economy\u2019 are not so easily deterred.\u00a0 Experts envisage a not-too-distant scenario where hydrogen both affordably and <\/em>cleanly powers our day-to-day lives, even those aspects presently unsuited to electrification. \u00a0Hydrogen could be used for long-term energy storage.\u00a0 For hydrogen-powered vehicles, as discussed in our Perspectives article<\/a>.\u00a0 For heating.\u00a0 Even for mixing with captured CO2<\/sub> and producing clean aviation fuel.\u00a0 All with no greater carbon footprint than a plume of water vapor spiraling harmlessly into the atmosphere.[2]<\/a><\/p>\n All that is needed for this energy revolution is some ingenuity, a little determination, and a fusion of the boldest brains in technology.<\/p>\n So-called \u2018green\u2019 hydrogen uses, not fossil fuels, but renewable energy to power the electrolysis of water and produce hydrogen gas.<\/p>\n Transforming renewable energy into storable gas overcomes two of the limitations currently hampering renewables.\u00a0 Renewables are inconsistent (solar and wind power rely on the sun shining and the wind blowing, respectively) and their generation doesn\u2019t always neatly sync with demand.<\/p>\n Apart from plentiful electricity, all one needs to produce green hydrogen is water and a piece of equipment known as an electrolyzer.\u00a0 Once you have that all-important end product, its versatility is unmatched.<\/p>\n Green hydrogen can be used for directly powering fuel cells in cars or ships, or burning in thermal power or heating plants, or simply helping replace some of the 10 million tons of industrial hydrogen produced from natural gas in the US annually.[3]<\/a><\/p>\n Little wonder some are hailing it as the next big thing, with both public and private sectors investing serious time and money in refining the process.<\/p>\n The development of clean hydrogen would overcome some of the challenges that have so far restrained hydrogen\u2019s progress.\u00a0 Traditionally, producing hydrogen is not a clean process.\u00a0 Natural gas is the current primary source of hydrogen production and this fuel cost accounts for 45%-75% of total hydrogen production costs[4]<\/a>.\u00a0 Producing hydrogen from fossil fuels also means that as demand for hydrogen has soared \u2013 it has trebled since 1975 \u2013 so too have the emissions generated by traditional hydrogen production.\u00a0 It now accounts for 830 million tons of CO2<\/sub> per year, roughly the same as the total CO2<\/sub> emissions of the UK and Indonesia combined[5]<\/a>.<\/p>\n Fossil fuel companies are facing ever-more stringent constraints on their activities to help achieve the emissions reduction targets defined in the Paris Agreement.\u00a0 The Paris Agreement aims to limit the rise in average global temperature to well below 2\u00b0C this century compared to pre-industrial levels.\u00a0 Achieving this will require substantial emissions reductions<\/a> across all sectors.\u00a0 As such, these organizations are frequently front and center in green hydrogen research.<\/p>\n Energy-related carbon dioxide emissions with current policies (Reference Case) compared to accelerated uptake of renewables (REmap), 2010\u20132050<\/strong><\/p>\n BP\u2019s solar offshoot Lightsource BP, for instance, is moving forward on a 1.5 GW wind and solar powered green hydrogen plant in Western Australia.[6]<\/a><\/p>\n Shell Nederland, meanwhile, is partnering with Eneco on a bid for a share of a Dutch offshore wind tender to power a 200 MW hydrogen hub in the port of Rotterdam.[7]<\/a><\/p>\n Governments worldwide are climbing on the green hydrogen bandwagon.\u00a0 The UK, Germany, Japan and Australia \u2013 the latter boasting a US$ 200+ million kitty to kickstart efforts \u2013 have all unveiled hydrogen strategies.\u00a0 The Netherlands intends to have 500 MW of green electrolyzers operational by 2025, and Portugal is planning a new solar-powered plant to produce green hydrogen by 2023.[8]<\/a><\/p>\n It\u2019s Europe where a lot of buzz is focused, with the European Commission identifying green hydrogen as a passport to achieving its aim of becoming carbon neutral by 2050.\u00a0 The EC\u2019s phased strategy includes:<\/p>\n The alliance brings together national and regional leaders, banks and industry heads to secure an investment pipeline for scaling-up green hydrogen production, while also introducing common standards, terminologies and certifications.<\/p>\n With the alliance, the EU wants to build its global leadership in this domain, to support the EU\u2019s commitment to reach carbon neutrality by 2050.\u00a0 All of which should promote investor certainty, thus ensuring the necessary infrastructure and logistical networks for green hydrogen to fulfill its potential.<\/p>\n European Commissioner for Energy, Kadri Simson, said: \u201cThe EU’s energy system has to become better integrated, more flexible and able to accommodate the cleanest and most cost-effective solutions, and hydrogen will play a key role in this, as falling renewable energy prices and continuous innovation make it a viable solution for a climate-neutral economy<\/em>.\u201d[10]<\/a><\/p>\n As in most walks of life, money talks, and hydrogen is not cheap.\u00a0 According to the European Bank for Reconstruction and Development (EBRD), green hydrogen currently costs around US$ 3-6 per kilogram compared to US$ 1-1.8 per kilogram for hydrogen made from fossil fuels.[11]<\/a><\/p>\n That\u2019s admittedly a drawback.\u00a0 And there\u2019s another.<\/p>\n The International Renewable Energy Agency<\/a> (IRENA) imagines some 19 exajoules of hydrogen from renewable electricity in the global energy mix by 2050.\u00a0 Yet producing that amount of renewable hydrogen (or hydrogen-based products) will require anywhere from 4-16 terawatts of solar and wind power.[12]<\/a><\/p>\n It has been calculated that producing 19 exajoules of hydrogen will entail at least 6,690 TWh of electricity annually \u2013 equivalent to 1,775GW of offshore wind farms, 2,243GW of onshore wind, 4,240GW of solar PV or 957GW of nuclear power.[13]<\/a>\u00a0 Quite a step up from our current installed capacity: 23.4GW of offshore wind, 540.4GW of onshore wind<\/a>, 480.4GW of solar PV<\/a> and 397GW of nuclear power.<\/p>\n These daunting figures explain why some industry experts are advocating for an interim measure of so-called \u2018blue hydrogen\u2019 \u2013 hydrogen produced using natural gas and CCUS (carbon capture, utilization, and storage).\u00a0 Unfortunately, only around 80% of carbon emitted during this process can be \u2018captured\u2019, so an energy ecosystem reliant on blue hydrogen would still be responsible for millions of tons of emissions each year.[14]<\/a><\/p>\n While pure cost comparisons appear unfavorable for green hydrogen, it is worth remembering the age-old principle of supply and demand.\u00a0 Prices will inevitably decline as usage increases.<\/p>\n The European Bank for Reconstruction and Development (EBRD), for instance, expects falling electrolysis costs, coupled with cheaper renewable energy, to cut the price of green hydrogen to no more than US$ 1.50 per kilogram by 2050 making it comparable with natural gas \u2013 even more so, if carbon penalties further tighten the noose on fossil fuels.<\/p>\n \u201cWe are probably in the same situation as we were a decade or two ago with renewable energy where the solution is more expensive than the alternatives.\u00a0 If things keep going and if there is a policy push going forward, our expectation is that it will become cost-competitive soon<\/em>,\u201d says Christian Carraretto of the EBRD.[15]<\/a><\/p>\n Similarly, in its \u201cFuture of Hydrogen\u201d report[16]<\/a>, the IEA predicts the cost of producing hydrogen from renewable energy could fall by 30% by 2030 as a result of declining costs of renewables and the scaling up of hydrogen production.<\/p>\n Says the IEA: \u201cWith declining costs for renewable electricity, in particular from solar PV<\/a> and wind, interest is growing in electrolytic hydrogen and there have been several demonstration projects in recent years\u2026 \u00a0With declining costs for solar PV and wind generation, building electrolyzers at locations with excellent renewable resource conditions could become a low-cost supply option for hydrogen<\/em>.\u201d<\/p>\n Hurdles notwithstanding, IRENA has no hesitation in identifying renewable-derived hydrogen as the \u2018missing link\u2019 in the energy transition, powering sectors otherwise difficult to decarbonize through electrification.<\/p>\n It recognizes, however, that a welcoming policy and regulatory framework is critical for attracting the necessary private investment.<\/p>\n As such, IRENA recommends:<\/p>\n Plus, IRENA notes, there is every reason to expect appetite for green hydrogen to increase as key technologies mature.<\/p>\n Proton-Exchange Membrane (PEM) electrolyzers and fuel cells are approaching economies of scale, with commercial deployment already under way in key markets such as Japan, California and Europe.[18]<\/a>\u00a0<\/p>\n Furthermore, new electrofuels can frequently replace fossil fuels seamlessly without the need to adapt equipment at point-of-use \u2013 potentially important for sectors such as aviation.<\/p>\n Several industries have already been identified where green hydrogen can make immediate and substantial inroads into climate goals.\u00a0 These include large-scale operations such as petrochemicals and steel manufacture, and medium to heavy-duty transport vehicles such as buses, trucks, trains and ships.<\/p>\n Mobility<\/a> is perhaps one of the highest profile sectors already well on the way to leveraging the benefits of hydrogen, while also helping to change perceptions.<\/p>\n Japan is a world leader in hydrogen fuel-cell vehicles.\u00a0 It aims to have 200,000 hydrogen vehicles on the road by 2025, rising to 800,000 in 2030[19]<\/a>.\u00a0\u00a0 These will be supported by a national network of hydrogen refueling stations designed to put millions of hydrogen vehicles onto the nation\u2019s roads.\u00a0 Looking further ahead, it is targeting 320 hydrogen stations operational by 2025 and 900 by 2030[20]<\/a>.<\/p>\n Japanese automotive giant and long-standing Abdul Latif Jameel partner Toyota Motor Corporation has long maintained that hydrogen fuel cell technology could power a broad spectrum of vehicle types, and sees global sales of fuel cell electric vehicles increasing significantly over the next decade.\u00a0 In line with these expectations, it plans to produce over 30,000 fuel cell electric cars annually by the end of 2021[21]<\/a> \u2013 a significant rise from 3,000 per year in 2018.<\/p>\n Indeed, it was the Toyota Mirai hydrogen powered vehicle, supplied by Abdul Latif Jameel, that was chosen to launch Saudi Arabia\u2019s first hydrogen fuel cell refueling station in the Dhahran Techno Valley Science Park in 2018[22]<\/a>.\u00a0 A sure sign that hydrogen energy is on the move.<\/p>\n How do we store all this clean hydrogen energy we hope to one day produce, and how do we use it to electrify industry and transport? \u00a0Batteries and fuel cells.<\/p>\n These overlapping technologies have the shared ability to convert stored electricity into chemical energy, ready for use whenever and wherever it is needed.<\/p>\n According to the International Energy Agency (IEA), the world\u2019s capacity for making battery cells has expanded exponentially in recent years, producing 320 GWh of batteries for electric vehicles (EVs) annually as of 2020.[23]<\/a>\u00a0 That\u2019s more than enough to power the 2.1 million EVs sold in 2019, but falls short of the 1,000 GWh of capacity needed by 2025 if EV sales targets are met.\u00a0 China is the pacesetter in this department, meeting around 70% of global capacity, followed by the United States at 13%.<\/p>\n Europe, by contrast, is leading the way on electrolyzer production for hydrogen energy, with an annual manufacturing capacity of 1.2 GW, enough for 500,000 fuel cell cars.\u00a0 Momentum is growing, with ITM Power completing construction on the world\u2019s largest electrolyzer plant (forecast to produce 1 GW a year) in Sheffield, UK, in early 2021.[24]<\/a><\/p>\n \u201cIdeally, clean energy stimulus packages will include battery and electrolyzer manufacturing simultaneously in order to take advantage of the spill-over benefits between the two technologies<\/em>,\u201d says the IEA.[25]<\/a><\/p>\n At Abdul Latif Jameel<\/a>, we are firm believers in the idea that private investors can encourage governments and big business to accelerate the green agenda.\u00a0 With our boundary-pushing technical portfolio, we are well placed to augment the field of hydrogen energy, thanks in part to our pioneering research in battery energy storage.<\/p>\n In November 2020, via renewable energy specialist Fotowatio Renewable Ventures <\/a>(FRV), part of Abdul Latif Jameel Energy<\/a>, we embarked on our second utility-scale battery project in West Sussex, UK.\u00a0 The 34 MW Contego project<\/a>, developed in partnership with Harmony Energy<\/a>, incorporates a system of 28 Tesla Megapack lithium-ion batteries.<\/p>\n![\"ALJ](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/ALJ-Hydrogen-Energy-Infographics-Fuel-Cell-scaled.jpg\")
<\/p>\nUnlocking a decarbonized future<\/h2>\n
![\"ALJ](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/ALJ-Hydrogen-Energy-Infographics-Electrolyzer-scaled.jpg\")
<\/p>\nNot just hot air<\/h2>\n
![\"ALJ](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/ALJ-Hydrogen-Energy-Infographics-Emissions-scaled.jpg\")
<\/p>\n\n
![\"European](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/CleanHydrogenAlliance_logo-02-300x121.png\"){kind=logo}
These do not appear to be mere empty promises.\u00a0 In fact, to ensure these ambitious goals are achieved, the EC has launched a new partnership called the European Clean Hydrogen Alliance<\/a>.<\/p>\n![\"Kadri](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/Kadri_Simson-e1571984285783-1024x1024-1-150x150.jpg\")
\nEuropean Commissioner for Energy<\/figcaption><\/figure>\nWill price pop hydrogen\u2019s balloon?<\/h2>\n
![\"Hydrogen](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/adobestock_26078260120large.jpg\")
<\/p>\n![\"\"](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/ALJ-Hydrogen-Energy-Infographics-Hydrogen-Costs-scaled.jpg\")
<\/p>\nThe policy perspective<\/h2>\n
\n
![\"Saudi](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/Saudi_Aramco_Air_Products_Hydrogen_Fueling_Station_Inauguration_June_18_2019.jpg\")
Hydrogen heralds a battery of breakthroughs<\/h2>\n
![\"\"](\"https:\/\/www.alj.com\/app\/uploads\/2021\/05\/ALJ-Hydrogen-Energy-Infographics-Electolyzer-Project-Sizes-scaled.jpg\")
<\/p>\n