Hydrogen — the magical gas that Jules Verne predicted in 1874 would one day be used as fuel — has long struggled to get the attention it deserves. Discovered 400 years ago, its trajectory has seen it mostly mired in obscurity, punctuated by a few explosive moments, but never really fulfilling its potential.
Now in 2021, the world may be ready for hydrogen.
Hydrogen is not an energy source, but an energy carrier — one with exceptional long-duration energy storage capabilities, which makes it a complement to weather-dependent energies like solar and wind.
This gas is capturing the attention of governments and private sector players, fueled by new tech, global green energy legislation, post-pandemic “green recovery” schemes and the growing consensus that action must be taken to combat climate change.
Joan Ogden, professor emeritus at UC Davis, started researching hydrogen in 1985 — at the time considered “pretty fringy, crazy stuff.” She’s seen industries and governments inquisitively poke at hydrogen over the years, then move on. This new, more intense focus feels different, she said.
The funding activity in France is one illustration of what is happening throughout Europe and beyond. “Back in 2018, the hydrogen strategy in France was €100 million — a joke,” Sabrine Skiker, the EU policy manager for land transport at Hydrogen Europe, said in an interview with TechCrunch. “I mean, a joke compared to what we have now. Now we have a strategy that foresees €7.2 billion.”
The European Clean Hydrogen Alliance forecasts public and private sectors will invest €430 billion in hydrogen in the continent by 2030 in a massive push to meet emissions targets. Globally, the hydrogen generation industry is expected to grow to $201 billion by 2025 from $130 billion in 2020 at a CAGR of 9.2%, according to research from Markets and Markets published this year. This growth is expected to lead to advancements across multiple sectors including transportation, petroleum refining, steel manufacturing and fertilizer production. There are 228 large-scale hydrogen projects in various stages of development today — mostly in Europe, Asia and Australia.
Hydrogen breakdown
When the word “hydrogen” is uttered today, the average non-insider’s mind likely gravitates toward transportation — cars, buses, maybe trains or 18-wheelers, all powered by the gas.
But hydrogen is, and does, a lot of things, and a better understanding of its other roles — and challenges within those roles — is necessary to its success in transportation.
Hydrogen is already being heavily used in petroleum refineries and by manufacturers of steel, chemicals, ammonia fertilizers and biofuels. It’s also blended into natural gas for delivery through pipelines.
Hydrogen is not an energy source, but an energy carrier — one with exceptional long-duration energy storage capabilities, which makes it a complement to weather-dependent energies like solar and wind. Storage is critical to the growth of renewable energy, and greater use of hydrogen in renewable energy storage can drive the cost of both down.
However, 95% of hydrogen produced is derived from fossil fuels — mostly through a process called steam-methane reforming (SMR). Little of it is produced via electrolysis, which uses electricity to split hydrogen and oxygen. Even less is created from renewable energy. Thus, not all hydrogen is created equal. Grey hydrogen is made from fossil fuels with emissions, and blue hydrogen is made from non-renewable sources whose carbon emissions are captured and sequestered or transformed. Green hydrogen is made from renewable energy.
Where the action is
The global fuel cell vehicle market is hit or miss. There are about 10,000 FCVs in the U.S., with most of them in California — and sales are stalling. Only 937 FCVs were sold in the entire country in 2020, less than half the number sold in 2019. California has 44 hydrogen refueling stations and about as many in the works, but a lack of refueling infrastructure outside of the state isn’t helping American adoption.
Hydrogen FCVs are gaining ground much faster in Asia. China intends to have a million of them on the road by 2035, in a bid to improve air quality. Japan wants to have 200,000 FCVs< by 2025 — up from the 3,600 it had in 2019. In South Korea, five business groups including Hyundai have pledged to spend around $38 billion on hydrogen innovation and infrastructure.
While hydrogen may have a role in expediting the decarbonization of private transport, the industry has to determine if capturing the automotive market is the best use of investment dollars.
A better use case for the gas, in terms of transportation, is in heavy and high-energy transport: ships, trucks, trains, buses, aircraft, construction equipment and vehicles with harsh operating conditions, like taxis. Hydrogen could perform well in the hard-to-electrify stuff that needs constant, reliable power to safely operate, and where batteries would either be too cumbersome or heavy to manage. For instance, the Norwegian city of Oslo is using hydrogen to help decarbonize its port, and cruise ship company Viking has announced intentions to make a hydrogen-powered cruise ship.
The hydrogen industry doesn’t see its position in decarbonization as an all-or-nothing proposition. “There’s absolutely a place for battery electric vehicles,” says Daryl Wilson, executive director of industry group Hydrogen Council. “But hydrogen has a big contribution to make to the way we get around, especially in heavy duty transport, in commercial transport and longer distance transport.”
Skiker says aggressive decarbonization demands a whole-system strategy, where the most useful, efficient technologies for a particular problem are the ones put to the fore: “First, electrification, and what cannot be electrified, you go with the hydrogen.”
Government primes the pump
The Biden administration has made some pretty big promises, picking up where George W. Bush’s hydrogen dreams left off. He campaigned on a promise to ensure market access to green hydrogen for the same cost as conventional hydrogen within 10 years. In March, climate envoy John Kerry said, “The test is going to be how do we produce the hydrogen in a way that isn’t so damaging and carbon-intensive.”
But weaning entire countries off fossil fuels — especially the U.S., one of the most car-dependent societies in the world and primarily powered by gas, oil and coal — is a far greater challenge than we can appreciate.
“What many folks miss is, today only 15% to 20% of the final energy use in any country is coming from electricity; 80% to 85% of our energy is coming from molecules — from chemistry, largely fossil fuels,” said Wilson. “So, as we go into a decarbonized future, we need to transform the molecular side of our energy system.”
This needs to be resolved before hydrogen truly takes off, which partly explains the glut of innovation and investment in the sector. “There is no way to keep this fossil-fuel-based hydrogen, it just doesn’t make any sense. Why would you? I mean, it’s just greenwashing,” Skiker exclaimed.
To many, hydrogen seems like the cure to all that ails us. Governments like it because it helps them reach their Paris Agreement emissions targets and environmental promises sooner. Oil and gas companies are heavily investing in it because they can reuse a lot of their infrastructure to create and transport hydrogen. Consumers’ main interactions with hydrogen will likely be in the realm of transportation. “These fuel cell cars have just developed into beautiful pieces of technology with 300-mile-plus range, the equivalent of 60 miles per gallon fuel economy,” says Ogden.
The players
There is a growing number of companies entering this hard-to-electrify sector.
Airbus announced in September plans to develop the first hybrid hydrogen passenger airplane by 2035. Startup ZeroAvia has raised more than $53 million from investors including Bill Gates-backed Breakthrough Energy Ventures, Horizon Ventures, British Airways, Shell and Amazon. Sergey Brin’s LTA Research and Exploration is semi-secretly building an airship powered by hydrogen propulsion. And Plug Power, a leader in American hydrogen that earlier this year received $1.5 billion from Korean conglomerate SK Group, has a partnership with startup Universal Hydrogen to make a hydrogen powertrain that can be retrofitted into aircraft.
Every single transport sector — maritime and ports, automotive, locomotive, trucking, mass transit, shipping and logistics — and the governments that regulate them are all thinking about hydrogen. Even the Pope is thinking about it.
“So you take these things together — the cost trajectory on renewables, the cost trajectory on hydrogen, greater policy understanding by government officials, and then you have the COVID impact of ‘build back better,’ green infrastructure, infrastructure spending on the energy transition — and this is where hydrogen was recognized as being a critical piece of the overall story,” Wilson said.
But will hydrogen jump ahead or jump the shark?
Decarbonizing transportation requires decarbonizing the grid. Failing to dramatically reduce the amount of fossil fuels used to produce electricity will cut hydrogen’s promise short. A balance needs to be struck between green and blue hydrogen to ensure the whole endeavor isn’t written off before its prime, Wilson said.
On the roadmap of hydrogen strategies, the U.S. is lagging behind Europe, Asia and Canada. Blue hydrogen isn’t a perfectly zero-emission, sustainable solution, but it may be the compromise a slow-to-change country might need.