What is green hydrogen – and why it is shaping up to be the fuel of the future?

RIO DE JANEIRO, BRAZIL – The cheapening of renewable energies coupled with advances in battery technology are sparking a veritable energy revolution. But solar panels and wind turbines are not yet able to clean up all economic sectors.

That’s where green hydrogen comes in, with the potential to reduce the carbon footprint of emission-critical sectors such as freight transportation and heavy industry.

From large steel mills to aircraft manufacturers, green hydrogen is becoming the latest frontier for decarbonizing economies – and generating billions of dollars among established companies and startups looking to scale up the technology.

But what is green hydrogen?

Green hydrogen is produced by the electrolysis of water using renewable energy. To produce it, an electric current is passed through the water molecule – by means of so-called electrolyzers – and splits the hydrogen and oxygen atoms.

To use it, fuel cells reverse the process: hydrogen is mixed with oxygen, producing electricity, with water vapor as the only waste product.

(A technical parenthesis: Hydrogen is the most abundant chemical element in the universe, but there are no relevant natural elemental sources on earth, where it can be found in its isolated form. In practice, it needs to be generated from other energy sources and is therefore technically considered an “energy carrier” rather than an energy source itself. )

Are there other ways to produce hydrogen?

Yes, and today most traditional hydrogen is produced from natural gas or coal, which results in large CO2 emissions. This is called “gray” hydrogen, used mainly by oil refineries and in the ammonia industry, used for the production of fertilizers.

Between green and gray hydrogen is “blue” hydrogen, also obtained from fossil fuels, but whose emissions are captured at the time of generation.

Why is green hydrogen so relevant for the energy transition?

Green hydrogen has shown itself as the most promising solution to reduce the costs of renewable energy generation to reach sectors currently considered difficult to decarbonize, as they are very intensive in emissions. In practice, it is considered a form of indirect electrification.

Direct electrification is relatively simple in light vehicles, for instance. It makes sense to replace the gas tank of a car with batteries, since the time to recharge them at the plug – or even their size – is not an insurmountable inconvenience.

However, in the case of a truck, the math is different. Every minute stopped represents money lost – and consider the weight of a battery needed to power a heavy vehicle that needs to run thousands of kilometers. The same reasoning applies to buses, ships, and airplanes.

What are the potential uses for green hydrogen?

There are many. In addition to heavy transportation, one of the most important and perhaps most immediate impacts lies in the chemical, petroleum refining, and fertilizer production sectors, which already use gray hydrogen.

Green hydrogen can also replace natural gas in heating systems.

There is also a promising use in the steel industry. Steel manufacturers use coal both to heat blast furnaces and to purify iron ore. It’s a dirty process: they are responsible for 7% of global CO2 emissions. For every ton of steel produced, an average of 1.9 tons of carbon dioxide is released into the atmosphere.

Founded last year, Swedish steelmaker H2 Green Steel is due to start operating in 2024. The company’s plan is to produce 5 million tons of steel per year in 2030 with zero CO2 emissions.

This will be achieved in two ways. First, the electrical energy used will come from 100% renewable sources. Also, H2GS will use green hydrogen in its production process. This means that the plant’s by-product will only be water vapor.

Fuel cells are also being tested on ships. For now, experiments involve smaller vessels, such as the Hydroville, a 16-passenger river ferry operating in Belgium. The shipping industry accounts for about 3% of global CO2 emissions.

Is green hydrogen economically feasible?

The process to produce hydrogen from entirely renewable sources is still expensive. The values vary according to the cost of renewable energy in each region.

A study by the International Renewable Energy Agency (IRENA) last year shows that the current cost of green hydrogen could drop from about US$6 per kilo to between US$1 and US$2 per kilo in the 2030s.

In this case, green hydrogen could not only replace gray hydrogen, but also fossil fuels in some economic segments.

Wood Mackenzie consultancy estimates that parity with gray hydrogen should be reached by 2040, on average. In some countries, such as Germany, the balance may occur earlier, in 2030.

In addition to production cost, there are also transportation challenges. As the lightest gas in the universe, hydrogen needs to be compressed to pass through a pipeline or converted to a liquid state to be carried by ship, which adds significant costs even when compared to other, denser gases, such as natural gas, for instance.

Are governments encouraging the adoption of green hydrogen?

The idea of replacing hydrocarbons with hydrogen is not exactly new. The first attempts were made in the 1970s, after the oil crisis. Thirty years ago, when climate change began to be debated, the idea resurfaced – but never resulted in a major breakthrough.

However, this time it may be different. The urgency is greater and with it comes investment, opportunities for disruption, and regulatory obligations.

The European Union has ambitious plans for the role hydrogen will play in the continent’s energy mix. The goal is for hydrogen to increase from the current 2% to between 13% and 14% of the total energy consumed in the bloc by 2050.

The EU estimates that investments in green hydrogen could reach nearly half a trillion euros over the next 3 decades and generate up to 1 million new direct and indirect jobs.

President Joe Biden has also included green hydrogen in the U.S. mid- and long-term energy policy and has set the goal of reducing the cost of renewable hydrogen by 80% by 2030.

Industry groups, including some fossil fuel companies, are pushing for tax credits for hydrogen production and for subsidies to convert natural gas pipelines to carry hydrogen.

Carbon pricing may also add an additional boost to clean technologies, such as green hydrogen.

Can blue hydrogen be an intermediate solution?

Until there is installed capacity of electrolysis plants and the required renewable energy to produce green hydrogen at scale and competitive costs, some are hoping for a transition with blue hydrogen.

But in addition to the costs associated with carbon capture technology, science has delivered bad news recently.

A study by researchers at Cornell University and Stanford University, published in Energy Science & Engineering scientific journal, pointed out that blue hydrogen may be a problem – rather than a solution – in the fight against climate change.

The study’s authors analyzed all the emissions associated with the life cycle of blue hydrogen and concluded that the balance doesn’t add up from an environmental standpoint.

The first problem lies in the extraction of natural gas, today’s main source of hydrogen. According to the scientists, gas extraction generates significant leaks of methane, an element much more harmful to the greenhouse effect than CO2.

The natural gas required in the carbon dioxide capture process also represents a significant portion of blue hydrogen’s environmental footprint.

If blue hydrogen were to be used in heating systems, for instance, it would be more worthwhile to burn coal or natural gas itself: CO2 emissions would be 20% lower, the researchers found.