Governments should abandon their pursuit of deploying clean hydrogen in ‘incompatible sectors’ and first decarbonise current hydrogen use cases, a new report by Future Cleantech Architects argues.
The German environmental thinktank, in its Hydrogen Guiderails Report, said sectors where there are effective, alternative decarbonisation solutions should be excluded from hydrogen deployment strategies and public funding.
It argues that hydrogen should not be used in building heating, road transport or electricity generation.
Its justification for this is the expected 100 million tonnes of hydrogen consumption in 2024, which is predominantly produced with unabated fossil fuels – equating to around 2.5% of global emissions.
“Only a symbolic volume of hydrogen, less than 1%, is produced from renewable electricity or with carbon capture and storage (CCS),” the report says.
With hydrogen production – described as ‘so energy intensive to produce’ – expected to quadruple by 2050, the report claims it will not contribute to energy security.
“Therefore, it should first be deployed in those sectors in which it is needed as an indispensable feedstock,” it stresses, pointing to fertilisers, steel and fuel production, as well as industries that already consume hydrogen today.
In pursuit of this, the report says clear national strategies for clean hydrogen deployment that prioritise the hard-to-abate sectors, with targets providing long-term visibility for hydrogen coupled with incentives, are needed.
It explicitly says such strategies should exclude “hydrogen-incompatible” sectors, such as heating and road transport, and avoid “technology openness” in sectors where decarbonisation solutions, such as direct electrification, have been established.
The report’s final recommendation is to further invest in RD&D to close the commercialisation gap and ramp up clean hydrogen production.
“It is crucial to fund commercially viable clean hydrogen production pathways, invest in innovative supplementary pathways, and accelerate RD&D to overcome upstream challenges, and ensure public funds are invested in hydrogen projects that will supply hydrogen to industries where it is an indispensable feedstock or fuel.”
The report’s recommendations align with the arguments from more sceptical hydrogen commentators.
The likes of Michael Liebreich and the Hydrogen Science Coalition have long stressed that existing hydrogen use cases, where knowledge, infrastructure and business cases are already formed, should be the first to move to clean hydrogen.
Proponents suggest that while those industries make sense on a scientific level, willingness to shift to the cleaner, more costly alternative remains low, with other segments such as mobility providing a proving ground for technology.
H2 View was previously told by Raffi Garabedian, CEO of US electrolyser maker Electric Hydrogen, that the “fundamentally correct” places to use green hydrogen “aren’t necessarily the places that are going to use it first.”
Players within industries tipped as top target by the new report have rolled back clean hydrogen plans, citing high costs and insufficient policy support.
Last November, the world’s second largest steelmaker ArcelorMittal froze final investment decisions (FIDs) on decarbonisation projects, including plans to build up green hydrogen-ready direct reduced iron (DRI) plants.
Read more:ArcelorMittal freezes green hydrogen DRI projects, blaming slow policy progress
Despite securing secured €3.5bn in subsidies to support the DRI plans, it said they were “premised on a favourable combination of policy, technology and market developments” that would allow it to decarbonise while offsetting the large CAPEX and OPEX costs.
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