SEPTEMBER 202219CXO INSIGHTSHYDROGEN: GAME CHANGER FOR DECARBONIZING HEAT? By Arnt Baer,Head of General Affairs & Public Affairs, GelsenwasserUsing hydrogen as fuel for the transformation of a fossil fuelled society to a low or net-zero carbon world is the hottest topic in energy policy. Due to the high costs of electrolysis, currently more than 90 percent of available hydrogen is produced on the basis of fossil fuels, in a process called steam methane reformation. This "grey hydrogen" can be cleaned up using carbon capture and storage to make "blue" hydrogen, but it does not become emission-free. Only "green" hydrogen made with renewables is considered completely sustainable.Green hydrogen is made in electrolysers that split water with renewable energy into its basic components, oxygen and hydrogen. It remains more expensive than fossil fuels because the equipment to make it is costly, and the process requires huge amounts of power.Therefore,there is no business case for private companies to produce it big scale.So, the costs of making renewable hydrogen will have to come down fast to enable the deep emission cuts needed for net-zero climate targets. Most economists say that once the industry scales up, renewable hydrogen could be produced from wind or solar power for the same price as natural gas in most of Europe and Asia. Because it`s all about economy of scale that comes with huge and foreseeable demand. Europe plans 10 million tonnes by 2030 The European Commission has presented an ambitious plan to establish a "hydrogen economy" with state support for becoming climate-neutral by mid-century. The plan is explicitly geared towards making the continent a technological pioneer. It contains three steps starting with the construction of electrolysers to produce green hydrogen for use in industries (steel, chemicals, refineries) by 2024, followed by local hydrogen production hotspots linked to industrial users in so-called "hydrogen valleys", by 2030. With increasing demand, they will be joined to create the backbone of a large European hydrogen infrastructure. It Arnt Baer
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