The United Nations in early 2024 said that the world was on the verge of a climate abyss and the international target of 1.5C would be broken. Climate change is real and there is little alternative to replacing fossil fuels quickly.
The 2050 net zero targets envisaged by the UN consider decarbonisation as an indispensable element to reduce emissions and introduce sustainability across diverse industries. Even as renewables continue to replace the traditional fossil fuel industry, it is not the panacea for all challenges. This is amply clear due to the fact that only 40 percent of the carbon emissions globally are due to the burning of fossil fuels for electricity generation.
This is where Hydrogen fuel has emerged as a potential option to revolutionize multiple sectors. From transportation to industrial processes, hydrogen offers a pathway to reduce carbon emissions and combat climate change. The most abundant element in the universe, hydrogen can be used in various forms, with the possibility of making it a zero-emission fuel.
While Gray Hydrogen is the most common form of hydrogen today, it emits significant amounts of carbon dioxide. On the other hand, blue hydrogen, which is also produced from natural gas, can mitigate carbon emissions.
However, it is Green Hydrogen, created through the electrolysis of water powered by renewable energy sources like solar and wind, which is juxtaposed along with renewables as the ideal solution. Hard-to-abate sectors such as steel, chemicals, refining, cement, shipping, aviation, trucking accounting for one-third global emissions, will perhaps produce more emissions in a rapidly developing world. This is where Green Hydrogen, a clean energy source emitting only water vapour and no residue can be a game changer.
Current Trends in Hydrogen Fuel
As per the Hydrogen Council, global investment in hydrogen technologies is estimated to exceed USD 300 billion by 2030. Globally, countries are recognizing hydrogen's potential to decarbonize economies. The International Energy Agency, an autonomous intergovernmental organization to promote energy security among its member countries, has stated that the global hydrogen market could reach USD 2.5 trillion by 2050 if supportive policies are implemented (IEA, 2023).
A Deloitte report had stated that clean hydrogen can deliver up to 85 gigatons in reductions to cumulative CO2 emissions by 2050, more than twice global CO2 emissions in 2021. It also estimates that the clean hydrogen market will be over 70 percent of USD 1.4 trillion in 2050, while supporting over 2 million jobs per year between 2030 and 2050.
Furthermore, fuel cell technology is evolving quickly, with several automative companies investing in the technology. In fact, the global sales of such vehicles grew by 25 per cent, reflecting increasing consumer acceptance and a push toward cleaner transportation options (Hydrogen Council, 2023). Countries including Germany and Japan are leading this with initiatives to increase the number of hydrogen stations. Currently, Germany has over 100 hydrogen refuelling stations, while Japan aims to reach 1,200 stations by 2030 (European Commission, 2023).
With industrial activity contributing significantly to the global emissions, hydrogen is already gaining rapid acceptance in industries including steel and cement manufacturing. While global companies such as Thyssenkrupp are pioneering the use of hydrogen in steel production, Indian company Jindal Stainless has also tied up with Hydrogen company Hygenco to reduce its emissions and achieve the net zero target. Furthermore, hydrogen can address the intermittency of renewables, especially during high demand, increasing grid reliability.
Although renewable installations have been increased quickly, challenges such as air pollution, high global energy-related emissions and the continuing climate challenges entail more. Green Hydrogen can help meet these climate goals, strengthen energy security and improve air quality. For developing countries and high-growth countries, Green Hydrogen can also address the geopolitical challenges associated with energy-dependence and the fluctuating currencies.
Lastly, the world needs to increase food production by over 70 percent to provide for a bigger population in the next few decades. This is where higher share of fertilisers will be needed, resulting in higher use of ammonia. It is estimated that ammonia from nitrogen and grey hydrogen produces around 1.8 per cent of the global C02 emissions. Using green ammonia can thus ensure food security but also minimising impact on the earth.
The Biofuel Industry
Biofuels industry, which has witnessed much growth since inception, can provide insights for the hydrogen sector. The hydrogen sector must focus on innovation, investing in research for optimizing production methods, akin to how biofuels have benefited from rapid advancements in technology. Hence, ameliorating efficiency of electrolysers can vastly lower energy costs related to green education.
Although biofuels were perceived better as compared to fossil fuels, they have suffered misconceptions resulting in gaining larger public acceptance. This is where hydrogen industry needs to share detailed information addressing safety concerns and benefits of the fuel. This is where strategic educational initiatives can inform consumers on hydrogen’s role in lowering emissions. Most importantly, promoting comprehensive policies promoting hydrogen production can go a long way in creating a large industry. It is heartening to note that some countries such as South Korea, India, Germany amongst others have laid a roadmap for others to emulate.
India’s Green Hydrogen Sector
India's green hydrogen sector is witnessing a swift adoption from energy to transportation sector. With the announcement of National Green Hydrogen Mission being announced in 2021, the government is looking at 5 Million Tonnes of Green hydrogen production by 2030. Further, the country is targeting exports of green hydrogen and a number of Indian states have already adopted a Green Hydrogen policy. For a country aiming to achieve net zero by 2070, Green Hydrogen and Green Ammonia production and use across industries is also a leap into self-reliance for its energy needs.
Although the energy sector contributes over three fourths of total GHG emissions, industrial activities such as mineral industries, chemicals, metals are consistently increasing their contribution. As the country grows, this share may only increase and hence Green Hydrogen will need to be the solution together with renewables.
Major companies, both domestic and international, are investing in green hydrogen projects. Collaborations are being formed to develop electrolyser technology, enhance production efficiency, and explore various applications, including transportation, industry, and power generation.
All these demonstrate the urgent need for skilled professionals in the green hydrogen sector, urging educational initiatives and training programs.
The Solar Energy Corporation of India, which brings out bids for Green Hydrogen and Green Ammonia projects, has witnessed strong response from potential companies both for electrolyser and green ammonia production. This shows that the opportunity size is big and hence the financial institutions must also view it as long-term bet by deploying patient capital.
Conclusion
Hydrogen fuel holds immense promise as a cornerstone of a sustainable energy future. With the world moving toward decarbonization, harnessing hydrogen's potential can significantly reduce greenhouse gas emissions across multiple sectors. By learning from the biofuel experience, stakeholders in the hydrogen economy can navigate challenges and leverage opportunities for growth.
Investments in technology, infrastructure, and public awareness are critical to fostering a robust hydrogen market. As we move forward, collaboration among governments, industries, and research institutions will be essential to unlocking the full potential of hydrogen fuel. Embracing this clean energy solution not only offers economic benefits but also aligns with the global imperative to combat climate change for future generations.
