What's Fueling Hydrogen Technology?

The Rising Prominence of Hydrogen Fuel

Hydrogen, a gas foreseen as a future fuel source by Jules Verne back in 1874, has historically faced challenges in gaining widespread recognition. Although identified 400 years ago, its development has been largely overlooked, marked by sporadic bursts of interest but failing to reach its full capabilities.

Currently, in 2021, the global landscape appears poised to embrace hydrogen technology.

Growing Interest and Investment

This gaseous element is now attracting significant attention from both governmental bodies and private companies. This surge in interest is driven by advancements in technology, evolving global green energy policies, post-pandemic “green recovery” initiatives, and a growing understanding of the urgent need to address climate change.

Joan Ogden, a retired professor from UC Davis, began her hydrogen research in 1985, a period when it was considered a rather unconventional field of study. She has observed repeated cycles of inquiry from industries and governments, followed by periods of disinterest. However, this current level of focus feels distinctly different, she notes.

European Investment in Hydrogen

The increased funding activity in France serves as a prime example of the broader trend occurring across Europe and worldwide. Sabrine Skiker, EU policy manager for land transport at Hydrogen Europe, explained to TechCrunch that France’s hydrogen strategy was previously allocated only €100 million in 2018 – a comparatively small amount.

She emphasized the substantial increase, stating that the current strategy now allocates €7.2 billion.

Global Projections for Hydrogen Growth

The European Clean Hydrogen Alliance anticipates combined public and private investments of €430 billion in hydrogen within Europe by 2030. This represents a significant effort to achieve emissions reduction goals.

Globally, the hydrogen generation industry is projected to expand from $130 billion in 2020 to $201 billion by 2025, demonstrating a compound annual growth rate (CAGR) of 9.2%, as per recent research from Markets and Markets.

This expansion is anticipated to spur innovation across diverse sectors, including transportation, petroleum refining, steel manufacturing, and fertilizer production.

Currently, there are 228 large-scale hydrogen projects underway in various stages of development, primarily located in Europe, Asia, and Australia.

Hydrogen: Beyond Transportation

The mention of “hydrogen” often conjures images of future transportation systems for many – encompassing automobiles, public transit vehicles, and even large freight trucks powered by this gas.

However, the applications of hydrogen extend far beyond the realm of transportation, and a comprehensive grasp of these diverse roles, alongside their inherent challenges, is crucial for its widespread adoption.

Current Industrial Applications

Currently, hydrogen sees significant utilization within petroleum refining processes. It’s also a vital component in the production of steel, various chemicals, ammonia-based fertilizers, and biofuels.

Furthermore, hydrogen is frequently integrated into existing natural gas networks for transmission through pipelines.

Hydrogen as an Energy Carrier

It’s important to recognize that hydrogen isn’t an energy source itself, but rather an energy carrier.

This characteristic is particularly valuable due to its exceptional capacity for long-duration energy storage, making it an ideal partner for intermittent renewable sources like solar and wind power.

Effective storage solutions are paramount to the expansion of renewable energy, and increased hydrogen utilization in these systems can contribute to a reduction in the overall costs of both technologies.

The Spectrum of Hydrogen Production

Currently, the vast majority – 95% – of hydrogen production relies on fossil fuels, primarily through a method known as steam-methane reforming (SMR).

Electrolysis, the process of using electricity to separate hydrogen and oxygen, accounts for a small fraction of production, with an even smaller portion utilizing renewable energy sources.

Consequently, the origin of hydrogen significantly impacts its environmental profile.

Grey hydrogen is produced from fossil fuels, resulting in carbon emissions.
Blue hydrogen is derived from fossil fuels, but incorporates carbon capture, utilization, and storage (CCUS) technologies.
Green hydrogen is generated using renewable energy sources, offering a carbon-neutral alternative.

Therefore, understanding the production method is key to evaluating the sustainability of hydrogen as an energy solution.

Fuel Cell Vehicle Market Dynamics

The worldwide market for fuel cell vehicles (FCVs) exhibits uneven growth patterns. Currently, approximately 10,000 FCVs operate within the United States, with the vast majority concentrated in California. However, sales figures are demonstrating a slowdown.

Specifically, only 937 FCVs were sold nationally in 2020, representing a decrease of nearly 50% compared to the 2019 sales volume.

California currently boasts 44 hydrogen refueling stations, with an additional number under development. A limited refueling infrastructure outside of California, however, is hindering broader adoption across the country.

Growth in Asia

In contrast to the U.S., hydrogen FCVs are experiencing considerably faster adoption rates in Asia. China has set an ambitious goal of having one million FCVs on its roads by 2035, driven by efforts to enhance air quality.

Japan aims to reach 200,000 FCVs by 2025, a significant increase from the 3,600 vehicles registered in 2019.

South Korea is also heavily investing in hydrogen technology. Five major business groups, including Hyundai, have collectively committed approximately $38 billion to hydrogen innovation and infrastructure development.

Optimal Applications for Hydrogen

While hydrogen may contribute to reducing carbon emissions in personal transportation, the industry is evaluating whether focusing on the automotive market represents the most effective allocation of resources.

A potentially more impactful application lies in heavy-duty and high-energy transport sectors, including ships, trucks, trains, buses, aircraft, and construction equipment.

Hydrogen could prove particularly advantageous for applications requiring consistent and dependable power, especially in challenging operational environments, where battery technology may be impractical due to weight or size constraints.

For example, Oslo, Norway, is utilizing hydrogen to reduce emissions at its port, and Viking Cruises has announced plans for a hydrogen-powered cruise ship.

A Complementary Approach

Industry stakeholders do not view hydrogen's role in decarbonization as mutually exclusive with battery electric vehicles. Daryl Wilson, Executive Director of the Hydrogen Council, emphasizes that “there’s absolutely a place for battery electric vehicles.”

He further asserts that hydrogen can make a substantial contribution to transportation, particularly in heavy-duty, commercial, and long-distance applications.

A holistic, system-wide strategy is essential for effective decarbonization. This approach prioritizes the most efficient and appropriate technologies for specific challenges.

As Skiker explains, the optimal sequence is “First, electrification, and what cannot be electrified, you go with the hydrogen.”

FCV Sales: 937 units sold in the US in 2020.
China's Goal: 1 million FCVs by 2035.
Japan's Target: 200,000 FCVs by 2025.
South Korea Investment: $38 billion in hydrogen innovation.

Government Investment in Hydrogen Technology

The current administration, under President Biden, has signaled a strong commitment to hydrogen energy, building upon earlier initiatives dating back to the George W. Bush era. A key campaign pledge involved achieving price parity between green and conventional hydrogen within a decade. Climate envoy John Kerry recently emphasized the necessity of sustainable hydrogen production methods, stating the importance of avoiding carbon-intensive processes.

However, transitioning nations away from fossil fuel dependence – particularly in countries like the United States, heavily reliant on automobiles and traditional energy sources like natural gas, oil, and coal – presents a significantly complex undertaking.

A crucial point often overlooked is the current dominance of molecules in global energy consumption. As Wilson explains, “Currently, only 15% to 20% of energy utilized globally originates from electricity; a substantial 80% to 85% is derived from molecules – primarily fossil fuels.” Therefore, a successful shift towards a decarbonized future necessitates a fundamental transformation of the molecular aspect of our energy infrastructure.

This challenge is a primary driver behind the surge in innovation and investment within the hydrogen sector. Skiker asserts, “Continuing to rely on fossil-fuel-based hydrogen is illogical and amounts to mere greenwashing.”

Hydrogen is often perceived as a comprehensive solution to numerous energy challenges. Governments favor it as a means to accelerate progress towards Paris Agreement emission reduction goals and fulfill environmental commitments. Oil and gas corporations are making substantial investments, recognizing the potential to repurpose existing infrastructure for hydrogen production and distribution.

For consumers, the most visible impact of hydrogen technology will likely be within the transportation sector. Ogden highlights the advancements in fuel cell cars, noting, “These vehicles have evolved into sophisticated technologies, offering a range exceeding 300 miles and achieving fuel economy comparable to 60 miles per gallon.”

The Role of Hydrogen in Decarbonization

The transition to a decarbonized energy system requires addressing the molecular side of energy, as most energy currently comes from molecules rather than electricity. This is a key challenge for widespread hydrogen adoption.

Investment in hydrogen is driven by both environmental goals and the potential for existing energy companies to leverage their infrastructure. This dual benefit is accelerating innovation in the field.

Government Support: Driven by commitments to emissions targets.
Industry Investment: Leveraging existing infrastructure for production and transport.
Consumer Impact: Primarily through advancements in fuel cell vehicle technology.

The Emerging Hydrogen Landscape

An increasing number of firms are now venturing into the challenging arena of transportation electrification.

Airbus revealed in September its intentions to engineer the inaugural hybrid hydrogen-fueled passenger aircraft, targeting a 2035 completion date. The startup ZeroAvia has secured over $53 million in funding from investors, including Breakthrough Energy Ventures (supported by Bill Gates), Horizon Ventures, British Airways, Shell, and Amazon.

Sergey Brin's LTA Research and Exploration is discreetly constructing an airship utilizing hydrogen propulsion technology. Furthermore, Plug Power, a prominent American hydrogen company that recently obtained $1.5 billion from SK Group, a Korean conglomerate, collaborates with Universal Hydrogen to develop a hydrogen powertrain adaptable for existing aircraft.

Hydrogen is currently under consideration across all transportation segments – including maritime, automotive, rail, trucking, public transit, and logistics – alongside the governing bodies overseeing these industries. Even the Pope has acknowledged its potential.

Wilson explained that the convergence of factors like declining costs for renewable energy sources, decreasing hydrogen production expenses, improved governmental comprehension of related policies, and the post-COVID “build back better” initiatives, all contribute to hydrogen’s growing recognition as a vital component of the broader energy transition narrative.

However, a critical question remains: will hydrogen achieve significant progress, or will its momentum falter?

Successfully decarbonizing the transportation sector necessitates a parallel decarbonization of the electrical grid. If substantial reductions in fossil fuel usage for electricity generation are not achieved, the potential benefits of hydrogen will be severely limited.

A careful equilibrium between green hydrogen and blue hydrogen production methods is essential to prevent the entire undertaking from being prematurely dismissed, according to Wilson.

Currently, the United States trails Europe, Asia, and Canada in the implementation of comprehensive hydrogen strategies. While blue hydrogen isn't a completely sustainable, zero-emission solution, it could represent a necessary compromise for a nation undergoing gradual change.