Lably
Skip to content

Hydrogen economy

Using hydrogen to decarbonize more sectors

  • 28 min read
  • 8 chapters

Related on Lably

Through Hydrogen, Greenhouse gas and Climate change

Hydrogen can be produced by several means. Most hydrogen produced today is gray hydrogen, made from natural gas through steam methane reforming (SMR). This process accounted for 1.8% of global greenhouse gas emissions in 2021. Low-carbon hydrogen, which is made using SMR with carbon capture and storage (blue hydrogen), or through electrolysis of water using renewable power (green hydrogen), accounted for less than 1% of production. Of the 100 million tonnes of hydrogen produced in 2021, 43% was used in oil refining and 57% in industry, principally in the manufacture of ammonia for fertilizers, and methanol.

To limit global warming, it is generally envisaged that the future hydrogen economy replace gray hydrogen with low-carbon hydrogen. As of 2024 it is unclear when enough low-carbon hydrogen could be produced to phase-out all the gray hydrogen. The future end-uses are likely in heavy industry (e.g. high-temperature processes alongside electricity, feedstock for production of green ammonia and organic chemicals, as alternative to coal-derived coke for steelmaking), long-haul transport (e.g. shipping, and to a lesser extent hydrogen-powered aircraft and heavy goods vehicles), and long-term energy storage. Other applications, such as light duty vehicles and heating in buildings, are no longer part of the future hydrogen economy, primarily for economic and environmental reasons. Hydrogen is challenging to store, to transport in pipelines, and to use. It presents safety concerns since it is highly explosive, and it is inefficient compared to direct use of electricity. Since relatively small amounts of low-carbon hydrogen are available, climate benefits can be maximized by using it in harder-to-decarbonize applications.

As of 2023 there are no real alternatives to hydrogen for several chemical processes in which it is currently used, such as ammonia production for fertilizer. The cost of low- and zero-carbon hydrogen is likely to influence the degree to which it will be used in chemical feedstocks, long haul aviation and shipping, and long-term energy storage. Production costs of low- and zero-carbon hydrogen are evolving. Future costs may be influenced by carbon taxes, the geography and geopolitics of energy, energy prices, technology choices, and their raw material requirements. The U.S. Department of Energy's Hydrogen Hotshot Initiative seeks to reduce the cost of green hydrogen drop to $1 a kilogram by 2031, though the cost of electrolyzers rose 50% between 2021 and 2024.

History and objectives

Origins

The concept of a society that uses hydrogen as the primary means of energy storage was theorized by geneticist J. B. S. Haldane in 1923. Anticipating the exhaustion of Britain's coal reserves for power generation, Haldane proposed a network of wind turbines to produce hydrogen and oxygen for long-term energy storage through electrolysis, to help address renewable power's variable output. The term "hydrogen economy" itself was coined by John Bockris during a talk he gave in 1970 at General Motors (GM) Technical Center. Bockris viewed it as an economy in which hydrogen, underpinned by nuclear and solar power, would help address growing concern about fossil fuel depletion and environmental pollution, by serving as energy carrier for end-uses in which electrification was not suitable.

A hydrogen economy was proposed by the University of Michigan to solve some of the negative effects of using hydrocarbon fuels where the carbon is released to the atmosphere (as carbon dioxide, carbon monoxide, unburnt hydrocarbons, etc.). Modern interest in the hydrogen economy can generally be traced to a 1970 technical report by Lawrence W. Jones of the University of Michigan, in which he echoed Bockris' dual rationale of addressing energy security and environmental challenges. Unlike Haldane and Bockris, Jones only focused on nuclear power as the energy source for electrolysis, and principally on the use of hydrogen in transport, where he regarded aviation and heavy goods transport as the top priorities.

In 1974 International Energy Agency (IEA) and the International Association for Hydrogen Energy (IAHE) were established. These organizations had several initiatives including advocating for national strategies to increase interest and visibility of the hydrogen economy.

Later evolution

A spike in attention for the hydrogen economy concept during the 2000s was repeatedly described as hype by some critics and proponents of alternative technologies, and investors lost money in the bubble. Interest in the energy carrier resurged in the 2010s, notably with the forming of the Hydrogen Council in 2017. Several manufacturers released hydrogen fuel cell cars commercially, and manufacturers such as Toyota, Hyundai, and industry groups in China planned to increase numbers of the cars into the hundreds of thousands over the next decade. However, the global scope for hydrogen's role in cars is shrinking relative to earlier expectations. By the end of 2022, 70,200 hydrogen vehicles had been sold worldwide, compared with 26 million plug-in electric vehicles.

Early 2020s takes on the hydrogen economy share earlier perspectives' emphasis on the complementarity of electricity and hydrogen, and the use of electrolysis as the mainstay of hydrogen production. They focus on the need to limit global warming to 1.5 °C and prioritize the production, transportation and use of green hydrogen for heavy industry (e.g. high-temperature processes alongside electricity, feedstock for production of green ammonia and organic chemicals, as alternative to coal-derived coke for steelmaking), long-haul transport (e.g. shipping, aviation and to a lesser extent heavy goods vehicles), and long-term energy storage.

National hydrogen strategies

Since 2017, several countries and regions have released a hydrogen strategy, outlining their goals in developing hydrogen infrastructure and as a guide for private investment. The International Renewable Energy Agency has proposed national strategies as the first pillar of policies to promote green hydrogen.

In 2017 Japan published their strategy with a proposal to become the world's first "hydrogen society". Many provinces and cities in China have established hydrogen strategies. The European Union strategy, adopted in 2021, outlines a plan to develop large scale infrastructure for hydrogen including electrolysers in collaboration with multiple trade organizations. The US hydrogen strategy "presents a strategic framework for achieving large-scale production and use of hydrogen" over a 30 year period. Analysis suggests that even nations reliant on exports of natural gas like Qatar could benefit from hydrogen strategies that leverage existing infrastructure, expertise, and markets. As of 2021, 28 governments had published hydrogen strategies. By 2024, that number reached 60. However the actual strategies proposed are not necessarily based on climate friendly green hydrogen. The majority of the strategies have been characterized by scale first and clean later, meaning they add regulations to enhance the viability of green hydrogen but do not mandate it use. Economic analysis shows few national strategies can make their 2030 goals.

Sign in to keep reading

7 more chapters are free with a Lably account.

More in Energy