Hydrogen to clean up energy with $10 trillion spend

Hydrogen to clean up energy with $10 trillion spend

As investment continues to be ploughed into clean technology, in hope of a green recovery to Covid-19, green hydrogen has become the technology that will fill the gap between renewable energy and net zero emissions. Global pipelines for projects and electrolyzer production facilities have seen four-figure growth, despite criticisms from industry laggards who claim to have seen this all before. But with the promised economies of scale of this production buildout, as well as a plummeting cost of renewables, and a rising cost of carbon, green hydrogen – produced using renewable energy – is set to become cost-competitive with existing fossil-fuel-based hydrogen in just two years – far before any other analyst groups have previously forecast.

This will see a violent shakedown of industries that have plodded on with a business-as-usual approach to decarbonization, without innovation. While these laggards continue to push CCUS (carbon capture) approaches or complain about a ‘chicken-and-egg’ problem for hydrogen demand, the companies making the zero-regret investments in green hydrogen now will dominate the hydrogen supply for existing ammonia and oil refining sectors by 2035, with an overall demand of 73 million tons by 2050, although by then there will be scant requirement from oil. In transport, green hydrogen will provide heavy transport the opportunity for close to continuous operation. Despite minimal penetration in the passenger vehicle space – at just 2.4% of on-the-road cars by 2050 – the economics of fleet-based transport will see penetration hit 22% for light commercial vehicles and 95% for heavy-duty trucking, with an overall hydrogen demand of 47 million tons per year across the world’s roads. In the seas, ammonia will be used as a carrier for hydrogen in 74% of ships by 2050, with the first ships being made available as soon as this year.