Context

Fit for 55 initiative

In July 2021 the EU set an example by setting ambitious targets to reduce net greenhouse gas emissions by at least 55% by 2030 (“fit for 555”) compared to 1990. The EU also wants to be the first climate-neutral continent by 2050. These goals are no longer aspirations or ambitions but obligations set out in Europe’s first climate law. In July 2021, the EU published a set of proposals aimed at bringing about the transformational change needed in our economy, society and industry

Decarbonisation

In this context, the decarbonisation of our industries and mobility systems is essential to achieve our goals. Hydrogen, produced from non-emitting sources (green hydrogen), either as a raw material for industry or as an energy carrier, is crucial for the transformation of Europe into a climate-neutral continent by the middle of the century and, in the short term, for our ability to meet our 2030 commitments.

Industrialisation

Today, with only 5% of global hydrogen production coming from non-emitting sources, the green hydrogen economy is in its infancy. At the same time, the use of hydrogen as an energy carrier to replace traditional fossil fuels will greatly increase in the years to come. Technologies for the production of green hydrogen, by electrolysis of water, exist on a small scale, but no solution is currently available to respond to the change of scale necessary in the years to come, with adequate profitability and reliability.

Low carbon hydrogen

Low carbon hydrogen

There is a now a consensus among academia, industry and political leaders that decarbonisation cannot be based on a model relying exclusively (or quasi exclusively) on electricity. Such model is considered both technically unrealistic and not economically sustainable. Especially for many mobility applications that are highly energy intensives such as heavy duty, maritime and air transport. Moreover it would be difficult, if not impossible, for the electrical grid to meet electricity demand under an ‘electricity only’ model, whereas hydrogen can rely on the existing gas distribution organization with some modifications. A ‘hybrid’ electricity-hydrogen model will be far more economically efficient than an ‘electricity only model, and would save EU hundreds of billions of euros per year according to recent studies.

Hydrogen will be vital to complement and balance intermittent renewable energy sources, by providing a mean of storage, as electricity is not easily storable in large quantity and pumped hydro-storage is a limited solution. In the EU, for instance, ambitious renewable energy targets have been agreed, with the objective that, by 2030, more than 30% of the entire EU’s energy demand and more than 50% of its electricity demand will come from renewable sources. Such a level of intermittent electricity production will deeply impact the electricity distribution network, it will require to set-up balancing services and hydrogen will have to play an important role here.

Applications

Hydrogen today, historical industrial applications

For decades, hydrogen has been used primarily by the chemical and refining industries:

  • Agricultural/Chemical Industry: Hydrogen is a fundamental raw material needed to produce ammonia (NH3), also known as azane, an important part of fertilizers used in agricultural industries around the world. Ammonia can also be used as an affordable, environmentally friendly refrigerant (R-717)
  • Petroleum Refining Industry: Hydrogen is commonly used in hydrocracking to create petroleum products, including gasoline and diesel. It is also used to remove contaminants like sulfur and to create methanol (CH3OH).

Hydrogen also has a long history of use in several other industries. these include:

  • Food: Hydrogen is used to turn unsaturated fats into to saturated oils and fats, including hydrogenated vegetable oils like margarine and butter spreads.
  • Metalworking: Hydrogen is used in multiple applications including metal alloying and iron flashmaking.
  • Welding: Atomic hydrogen welding (AHW) is a type of arc welding which utilizes a hydrogen environment.
  • Flat Glass Production: A mixture of hydrogen and nitrogen is used to prevent oxidation and therefore defects during manufacturing.
  • Electronics Manufacturing: As an efficient reducing and etching agent, hydrogen is used to create semiconductors, LEDs, displays, photovoltaic segments, and other electronics.
  • Medical: Hydrogen is used to create hydrogen peroxide (H2O2). Recently, hydrogen gas has also been studied as a therapeutic gas for a number of different diseases.

Hydrogen consumption

Hydrogen as an energy vector

While addressing the question of climate change, hydrogen has to be considered in its energy vector function by conveying chemical energy: it is used to convert, store, and then release energy.

When used to release energy, hydrogen does not produce greenhouse gases, particulates, SOx or ground-level ozone. Hydrogen chemical energy is converted into either:

  • Electricity by the use of a fuel cell,
  • Thermal energy by a combustion reaction.

In both cases it emits nothing but water.

Hydrogen can also be combined with other chemical elements to produce what are referred to as “hydrogen-based fuels”, such as synthetic methane, ammonia, synthetic liquid fuels and methanol. These can be easier to handle than pure hydrogen and can be used as feedstock in industry.

Hydrogen allows cost-efficient bulk transport of energy over long distances together with cost-effective storage of large energy volumes. Hydrogen can therefore decouple energy production and usage in location and time. Additionally, hydrogen can be used to decarbonize all energy use:

  • in industry, both for feedstock and high temperature heat,
  • in mobility, for road, rail, water and air transport,
  • in buildings, for heating and cooling,
  • in electricity, to balance electricity demand and supply

Lastly as regard to deep decarbonization, it will require hydrogen to satisfy current industrial demand: ‘no molecules, no deep decarbonization. Substantial amounts of hydrogen are already used today in industrial and chemical processes. Although this is mostly hydrogen produced from non-renewable sources and therefore it is required to rapidly adapt the production means to make it carbon free.

Where do we stand ?

Where do we stand ?

2-3.3GW
Expected electrolyzer deployments in 2023

52.8Mt-H2
Total annual clean H2 output proposed by developers

$146 billion
Public money committed to clean H₂ by December 2022

The US Inflation Reduction Act (IRA) of 2022 is now rippling through the clean hydrogen (H2) sector. We expect US electrolyzer deployment to grow 10 times to almost 1GW, making it the second-largest market after China. Canada, the EU and India are set to launch their own answers to the IRA. BloombergNEF expects H₂ demand and midstream infrastructure to take off in 2023.

  • Countries are racing to match US IRA funding. The EU’s Green Deal Industrial Plan offers a fixed premium subsidy for Hz while Germany will spend $21.3 billion on H2 and industrial decarbonization between 2023-26, the highest budget set for H2. India, despite an underwhelming hydrogen strategy, passed a $2.3 billion budget for Hz production and manufacturing.
  • Electrolyzer deployment in the US could grow 10 times in 2023 thanks to the IRA, EMEA and APAC will continue to see delays. Developers have announced plans to produce some 52.8 million tons of clean H2 per year, equivalent to 56% of today’s gray H2 production.
  • Electrolyzer manufacturing is entering a brutal era, with planned electrolyzer production capacity to come online by the end of 2023 exceeding expected demand 12 times. Many electrolyzer manufactures will find their factories heavily underutilized.
  • Demand for clean H2 keeps growing. Our database counts 162 industrial projects planning to use clean H2, up from 146 in July. Some 52% of H2 demand in 2050 comes from the chemical and steel sectors, according to the net-zero scenario in New Energy Outlook 2022
  • Hydrogen pipelines are starting to become reality. The first European cross-border H2 pipeline has now been proposed for funding. Meanwhile, new ammonia terminals are being planned in places looking to import H2 as ammonia, such as Korea and the EU.
 

Bloomber Hydrogen report H1-2023

Contact

For decades, hydrogen has been used primarily by the chemical and refining industries:

Events

For decades, hydrogen has been used primarily by the chemical and refining industries:

Partners

For decades, hydrogen has been used primarily by the chemical and refining industries:

Media

For decades, hydrogen has been used primarily by the chemical and refining industries:

Training

For decades, hydrogen has been used primarily by the chemical and refining industries:

R&D

For decades, hydrogen has been used primarily by the chemical and refining industries:

Maintenance

For decades, hydrogen has been used primarily by the chemical and refining industries:

Integrated solutions

For decades, hydrogen has been used primarily by the chemical and refining industries:

PEM Stack product line

For decades, hydrogen has been used primarily by the chemical and refining industries:

Energy

For decades, hydrogen has been used primarily by the chemical and refining industries:

Mobility

For decades, hydrogen has been used primarily by the chemical and refining industries:

Industry

For decades, hydrogen has been used primarily by the chemical and refining industries:

Technology

For decades, hydrogen has been used primarily by the chemical and refining industries:

Ecosystem

For decades, hydrogen has been used primarily by the chemical and refining industries:

Facilities

For decades, hydrogen has been used primarily by the chemical and refining industries:

Milestones

For decades, hydrogen has been used primarily by the chemical and refining industries:

Our vision

For decades, hydrogen has been used primarily by the chemical and refining industries:

At a glance

For decades, hydrogen has been used primarily by the chemical and refining industries:

Where do we stand ?

For decades, hydrogen has been used primarily by the chemical and refining industries:

Applications

For decades, hydrogen has been used primarily by the chemical and refining industries:

Low carbon hydrogen

For decades, hydrogen has been used primarily by the chemical and refining industries:

Context

For decades, hydrogen has been used primarily by the chemical and refining industries: