Hydrogen is the most abundant element in the universe and has the potential to reduce anthropogenic greenhouse gas emissions and decarbonize our planet. What makes hydrogen vital is its capability to be a clean, safe and flexible energy carrier. Additionally, when combusted to generate heat or electricity, it produces water. These characteristics make it an excellent component for numerous emission-intensive sectors looking to reduce their carbon footprint, such as power, transportation, and, more commonly, the industrial sector.
To do so, however, will require moving away from the current, carbon-intensive production methods and using green techniques powered by renewable electricity sources. Also, technological advances and policy support will be needed to reduce the cost of production, storage, and utilization of hydrogen for its deployment across diverse sectors.
The Carbon-Intensity of Current Production Techniques
Hydrogen has been utilized in the industrial sector since the early 1900s and presently is in demand in oil refineries, fertilizer production, and glass and iron manufacturing processes. Hydrogen production is currently a very carbon-intensive activity. Hydrogen is a highly reactive element that isn’t found in its pure form in nature. It is derived from diverse sources such as water, biomass, and fossil fuels. Currently, 95 percent of hydrogen, also known as “gray hydrogen,” is made from fossil fuels such as natural gas and coal using steam reformation, a high-temperature process in which steam reacts with a hydrocarbon fuel. Six percent of global natural gas and two percent of global coal produce hydrogen, emitting 830 million tonnes of carbon dioxide (CO2) per year. This is equivalent to the CO2 emissions of the United Kingdom and Indonesia combined.[i]
According to Praxair, one of the world’s largest hydrogen producers, producing 1 million standard cubic feet (SCF) of hydrogen from natural gas leads to the emission of 21.9 metric tons of carbon dioxide (CO2). Simplifying these numbers for comparison, while producing 1 kilogram (kg) of hydrogen produces 9.3 kgs of CO2, 1 gallon of gasoline, which is the exact energy equivalent of one kilogram of hydrogen, produces 9.1 kgs of CO2 when combusted.[ii] The bottom line? Shifting to gray hydrogen will not lower the emission intensity of any sector where it is employed. Hence, decarbonizing production is crucial because even though hydrogen does not generate emissions when combusted, its production negates all the positive benefits.
The Cost of Clean Hydrogen Production
Two methods are utilized to produce clean hydrogen. First, retrofitting carbon capture and storage on existing plants to produce “blue hydrogen.” Second, producing “green” hydrogen through the process of electrolysis. Here, water (H2O) is split into its constituent elements using an electric current. Currently, less than 0.1 percent of globally produced hydrogen comes from electrolysis as it has not reached cost parity with steam reformation.
Producing hydrogen from electrolysis costs around $3 to $8 per kg, whereas gray hydrogen costs approx. $1 per kg. [iii]Furthermore, electrolysis requires a sizable amount of electricity. To break down the price, currently, 48 kWh of energy is needed on average to produce 1 kg of hydrogen. According to IEA, electrolysis utilizes three to five-time more electricity to produce hydrogen than steam reformation. Using the US’s current average industrial electricity cost, 0.064 cents per kWh,[iv] the cost of the electricity itself leads to a price of $3.07 per kg of hydrogen. This electricity needs to be sourced from renewable energy for the hydrogen to be “green.” Thus, to make the process cost-competitive, there is a need for incentives such as production and investment tax credits to reduce costs.[v] However, there might be a silver lining. The rising generation capacity of renewable energy in the United States can be complemented by hydrogen. Rising renewables are leading to curtailment, which can be solved by utilizing excess renewable power for hydrogen production.
Once hydrogen is produced, storing it is a difficult task. Hydrogen molecules are tiny and hence, more prone to leakage. This problem is exacerbated by the need to store it at high pressure to provide sufficient energy density (hydrogen is 3.2 times less energy-dense than natural gas). Liquefying hydrogen for storage is an alternate option, often used when hydrogen is used as a fuel. This technique comes with its own set of challenges. Hydrogen becomes a liquid at – 253 degrees Celsius (minus 423 F) at atmospheric pressure. This leads to a fraction of liquified hydrogen being boiled off daily. Additionally, since hydrogen can permeate metal, storage tanks have to be super insulated. Hence, the cost and complexity involved in compressing hydrogen and storing it while maintaining the compression are high.
Hydrogen Fuel Cells
Lastly, a fuel cell, an electrochemical generator, is used to convert it to electricity by combining hydrogen with oxygen. As the byproducts are heat and water, there are no harmful emissions. Nevertheless, fuel cells are expensive as the primary catalyst in the fuel cell is platinum. Although there has been extensive research to replace this precious metal, it will be a while before it is achieved. This further adds to the cost of scaling hydrogen in the power sector due to the constant replacement of the expensive and rare catalyst.
The Hydrogen Policy Landscape
Despite the technical challenges surrounding hydrogen production, not all is lost. The introduction of hydrogen does not have to be an all-or-nothing solution. The world has witnessed a rapidly growing support for hydrogen. Increased investments in research and development and building of critical infrastructure are spurring innovation and reducing costs. In the United States, hydrogen is blessed with widespread political support. With the Biden Administration pushing its agenda for climate action, the administration’s determination to transition towards a green economy does help create a political environment that supports a green transition. The US Department of Energy has a Hydrogen Program led by the Hydrogen and Fuel Cell Technologies Office within the Office of Energy Efficiency and Renewable Energy. The program conducts research and development in hydrogen production, delivery, infrastructure, storage, fuel cells, and multiple ends uses across transportation, industrial, and stationary power applications. The entire budget for hydrogen and fuel cell research at the DOE was approximately USD 300 million in FY 2020.[vi]
The private sector further demonstrated its commitment when eleven large companies, including Hyundai, Shell, Toyota, and Bloom Energy, formed Hydrogen Forward[vii], a coalition focusing on advancing hydrogen development in the United States. These private sector investments will further accelerate the scaling of hydrogen. Thus, the amalgamation of government policies supporting the adoption of hydrogen and private sector investments will foster the rapid growth of a green hydrogen economy in the United States that helps the country achieve its climate goals without compromising its economy.