Series: Powering Change

Sustainable Hydrogen: Decarbonising production for a greener future

Blog #3   –   Hydrogen can be a key driving force in the acceleration of the energy transition. However, a sustainable energy landscape requires sustainably produced hydrogen, while presently the vast majority of hydrogen is produced using natural gas and coal. Considering hydrogen use is largely unavoidable in sectors that make up over 95% of hydrogen demand, the decarbonisation of hydrogen production is imperative. In this article, Aurelio Negri (Innovation Consultant – Energy & Materials), discusses the potential of hydrogen, and how innovation can lead it towards a sustainable future. 

What is hydrogen anyway?

Hydrogen is the lightest and most abundant chemical element in the universe(1). On Earth, it is mostly found bonded in water (H2O) and organic compounds such as cellulose (C6H10O5) and methane (CH4), while its molecular form (H2) appears only in negligible amounts in the atmosphere(2).

The combustion of hydrogen with oxygen produces water and releases a significant amount of energy (120 MJ/kg), which is nearly three times the energy content of gasoline. While this property makes it appealing as an energy carrier, today hydrogen is mainly produced and used as chemical feedstock in fertilizer production and petroleum refining.

Not all hydrogen is created equal

Not all hydrogen is created equal. Although the International Energy Agency (IEA) is trying to establish a framework of clear definitions based on the emissions intensity, the most common terminology uses colour codes depending on the production route and feedstock used, as seen in the following table.

As the vast majority of hydrogen is currently produced from fossil-based polluting processes, hydrogen production is responsible for more than 900 Mt of direct CO2 emission, which is 2-3% of the global emissions(3,7). Unless there is a shift towards more sustainable production technologies, these emissions will continue to increase alongside the growing demand and diverse range of applications, resulting in catastrophic environmental impacts.

The future is green… and blue

Although electrolysis is the only production route that is not dependent on fossil fuels and produces zero direct GHG emissions, it is also two to three times more expensive than traditional options and requires massive investments to scale-up fast enough. Therefore, most scenarios consider a mix of green hydrogen and blue hydrogen, which only requires the addition of Carbon Capture and Storage (CCS) systems to the current production facilities. As seen in Figure 1, the Net Zero scenario for 2050 requires a steep increase of green hydrogen, while at the same time shifting from grey to blue and increasing the current production capacity.

Achieving sustainable hydrogen production by 2050

Current uses and promising future applications

But why do we need so much hydrogen? Global hydrogen demand reached 94 Mt in 2021, having grown 50% in the past 20 years(3,8). As seen in Figure 2, most of the hydrogen is currently used in refineries for desulphurization and hydrogenation of fossil feedstock, another large portion is directed to the chemical industry (especially ammonia for fertilizers), and the remaining share is used for the reduction of iron ores in steel manufacturing. As the use of hydrogen in these sectors is virtually unavoidable, it is imperative to pursue the decarbonization of the hydrogen supply chain.

 

By 2050, total production should reach 530 Mt and greatly expand its use-cases to replace the current polluting technologies(3). For transportation, hydrogen fuel cells and hydrogen-based fuels (including ammonia) are promising especially for hard-to-electrify segments such as aviation, shipping, and heavy-duty vehicles. In the industry and power sector, hydrogen could be blended or replace natural gas in many high-temperature processes, or co-generate electricity and heat in fuel cells with no direct emissions of GHGs. Moreover, hydrogen and hydrogen-based fuels produced with surplus renewable electricity could be used for seasonal and large-scale energy storage, as they are less energy efficient but more cost-effective than batteries(3).

Going from 94 Mt to 530 Mt of yearly H2 production in less than three decades would already be a challenge, but doing it in a sustainable way will be even harder, particularly considering that less than 3% of current production follows low-emission technologies. While economic obstacles exist, the development of new technology is also necessary. Disruptive innovation has the potential to play a crucial role in overcoming these challenges.

 

Sustainable hydrogen: Challenges and potential for innovation

Despite the versatility of hydrogen and its potential for providing solutions across various sectors, poor planning could lead to the development of inefficient and expensive infrastructure. There are many challenges that need to be solved in order to achieve a functioning hydrogen value chain (Figure 3).

Figure 3: Key challenges in the hydrogen value chain

Distribution: Hydrogen has a very low density and can be transported in gaseous form by pipelines or in liquified form in cryogenic tanks. Repurposing existing gas pipelines could bring substantial cost benefits, but the higher leakage rate and ignition range of hydrogen compared to natural gas could require complex upgrades (e.g. recoating of the pipelines). When considering hydrogen liquefaction, the main challenge is the low temperature needed (-253 °C), which makes the process extremely inefficient and expensive. A better solution could be to directly convert it into ammonia and synfuels, which are easier to transport.

Storage: The low density of hydrogen represents a challenge for storage as well. For large-scale and long-term energy storage, the current best options seem to be salt caverns and other underground geological formations, adapting the technologies already developed by the petrochemical industry.

Cost of electrolysis: To reach the target of green hydrogen production in 2050, it is crucial to lower the cost of electrolysis, which is currently not cost-competitive enough. From the current global electrolyser capacity of 0.3 GW (of which >40% in Europe), estimates on the projects under construction and planned show a value of 54 GW in 2030, possibly cutting down the electrolysers CAPEX threefold(3).

Alternative production routes: Beside water electrolysis and methane plasmalysis, there are some biological pathways to produce hydrogen using bacteria and microalgae(9). Other production routes could be realized through thermochemical processing (e.g. gasification) or fermentation of biomass, which are considered promising but not yet competitive on a large scale(10).

Viability of CCS: As around 40% of the hydrogen demand in 2050 will most likely be met by blue hydrogen, it is critical to develop efficient and effective Carbon Capture and Storage systems. Developments in the CCS field will directly enable and foster the deployment of low-emission hydrogen production.

Water use: In addition to energy, all hydrogen production methods require fresh water (~9 kgH2O/kgH2 for green hydrogen and ~15 kgH2O/kgH2 for grey hydrogen)(3). Although the consumption is relatively little, large-scale plants can have a significant impact in water-scarce regions. As using seawater would corrode the production equipment and produce unwanted chlorine, developments in desalinization and seawater treatment technologies may also facilitate the production of more sustainable hydrogen.

Minerals use: Increased manufacture of electrolysers will drive the demand of nickel, platinum, iridium, and other precious metals. Improvements in the design and recycling technologies for electrolyser cells will be needed to reduce the stress on the supply chain.

Geography: Production costs will mainly depend on geographical availability of cheap and abundant renewable energy (for green hydrogen), but Middle Eastern countries could benefit from focusing on natural gas coupled with CCS (for blue hydrogen). While China and United States aim to cover their demand with domestic production, most European and Asian countries will likely have to import hydrogen and hydrogen-based fuels from North Africa, Middle East, and Oceania(3). If the EU wishes to be independent, it should apply strong policies and investments to become a technological leader and create a well-integrated system of production and consumption.

Labelling framework: Last but not least, the current colour labels or the use of generic terms such as “sustainable” and “low-emissions” makes investments and regulatory interoperability difficult and unclear(5). To ensure consistency and comparability of hydrogen emissions intensity across various certification systems and regulatory frameworks, it is crucial to establish a standard methodology that defines the scope of emissions and system boundaries.

In conclusion, sustainable hydrogen is without doubt a pillar of the energy transition and it will be a fundamental element present in many aspects of our society (agriculture, industry, transport, energy). To fully realize its potential, however, there are many challenges that need to be overcome by policymakers and technological innovators.

 

Catalyze can support your innovation

There is a wealth of opportunities for those who work in, or with, the booming hydrogen sector. Europe is taking on a leading position in this global energy transition and is going all-in on H2. As a result, numerous public support programs have been called to life. Some completely new and dedicated, like the Hydrogen Bank, some integrated into existing frameworks such as Horizon or Interreg. There are also examples on local levels, initiated by regional or national agencies.

  • (TRL 1-4) EIC Pathfinder (Challenges: solar power harvesting space, responsible electronic, cooling, etc.) Funding rate: 100%.  Deadline: October 18, 2023. Expected deadlines in 2024: Open Call, March 2024; Challenges, October 2024.  (Learn more)
  • (TRL4-6) Eurostars Funding rate varies per country, in general 40%-60%. Deadlines: 14 September 2023, 13 March 2024. If you are early in your technological roadmap and looking for international partners to organise collaborative R&D, Eureka Eurostars fits in well. (Learn more)
  • (TRL 5-9) EIC Accelerator Funding rate: 70% +equity investment. Deadline: 19 October 2023. Expected deadlines in 2024: January (Open only), March, June, October. If your technology is mature enough and needs further optimization or validation in a relevant environment, EIC Accelerator can be the target. The proposal can either be submitted under the open programme, or the Energy Storage challenge that might be more relevant. (Learn more)
  • (All stages) Horizon Europe calls: your R&D focuses on specific objectives, and benefits from pan-Europe partnerships, there are several opportunities available under the Horizon Europe 2023-2024 work programme (learn more about Horizon Europe). For more information, please refer to Cluster 5 ‘Climate, Energy and Mobility’.
  • Clean Hydrogen JU: The overall goal of the Clean Hydrogen Partnership (as per its legal name Clean Hydrogen Joint Undertaking) is to support research and innovation activities in the Union in clean hydrogen solutions and technologies. 2023 calls have expired and 2024 calls have not yet been announced. (Learn more)
  • Interreg: Interreg usually finances activities of joint strategies development, demonstration and piloting projects (late TRL stages) to remove boundaries for the adaptation of certain innovative processes/products/services, or knowledge dissemination activities. The average subsidy per project is expected to be €1-6 million. Financed projects last approximately between 3 to 5 years. Hydrogen projects fall under the Objective: ‘Greener carbon-free Europe- fostering the transitions towards a net-zero carbon economy’. Announcement of the Third Call is expected soon. (Learn more) 
  • Innovation Fund: The Innovation Fund is one of the largest funding programmes for demonstration of innovative low-carbon technologies. The aim is to support innovative low-carbon technologies in all Member States (EU companies) in taking off and reaching the market. The project has to be implemented in one of the EU Member States, Norway or Iceland. Innovation Fund is focussed on highly innovative technologies and big flagship projects with European value added that can lead to significant reductions in emissions. (Learn more)
  • EHB (European Hydrogen Bank): The pilot auction was announced 30 August 2023. This auction is funded by the Innovation Fund under the European Hydrogen Bank (EHB) umbrella. It is the first auction for the production of renewable hydrogen. Uptake in industrial processes is a central measure of the EC to reduce fossil fuel consumption in hard-to-abate industries. There is €800 million available for projects up to €266.7 million in size. The deadline is 23 November 2023. (Learn more)

Turn your plans for sustainable hydrogen into meaningful impact

The type of support that is best suited for your plans depends on several factors, such as type and size of organization, location, budget or scope. In fact, there are so many options that it can be difficult to know where to start. Together we can ensure the optimal path for your specific case. We can help with the right funding strategy, application procedures, partnering, and project management. We can even optimize your business case or take a temporary position in your team. With over a decade of experience in fundraising, a vast European network, and deep knowledge of the hydrogen market, we are the ideal partner to turn your plans for the hydrogen sector into meaningful impact.

 


 

Powering Change: Energy Transition series

Blog #1: Innovation Opportunities in the Energy Transition

Blog #2: Low-grade waste heat recovery is a key priority for EU energy transition

Blog #3: Sustainable Hydrogen

Blog #4: Critical Materials

Blog #5: Smart Grids

 


 

References

  1. NASA. Physics of Stars. https://imagine.gsfc.nasa.gov/ask_astro/stars.html#961112a (1996).
  2. Grinter, R. et al. Structural basis for bacterial energy extraction from atmospheric hydrogen. Nature 615, 541–547 (2023).
  3. IEA. Global Hydrogen REVIEW 2021. (2021).
  4. Global CCS Institute, A. Blue Hydrogen. (2021).
  5. IEA. Towards hydrogen definitions based on their emissions intensity – Analysis. IEA https://www.iea.org/reports/towards-hydrogen-definitions-based-on-their-emissions-intensity (2023).
  6. Flowers, S. How commercial is low-carbon hydrogen? https://www.woodmac.com/news/the-edge/how-commercial-is-low-carbon-hydrogen/ (2023).
  7. van Mead, N. The hydrogen hype: a bubble or a game changer in decarbonization? | Journey to Zero. https://journeytozerostories.neste.com/innovation/hydrogen-hype-bubble-or-game-changer-decarbonization (2022).
  8. IEA. Hydrogen Patents for a Clean Energy Future. https://www.iea.org/fuels-and-technologies/hydrogen (2023).
  9. Satyapal, S. Hydrogen: A Clean, Flexible Energy Carrier. Energy.gov https://www.energy.gov/eere/articles/hydrogen-clean-flexible-energy-carrier.
  10. Lepage, T., Kammoun, M., Schmetz, Q. & Richel, A. Biomass-to-hydrogen: A review of main routes production, processes evaluation and techno-economical assessment. Biomass Bioenergy 144, 105920 (2021).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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