The world energy scenario is changing drastically in the backdrop of the rising challenge of climate change. Although clean energy through solar, wind, hydroelectric, etc. is gaining momentum, there is a single horn toady buzzing lately that stands out as a potential solution to a net-zero emission target, green hydrogen. A colorless, odorless gas, which is obtained as a result of electrolysis of water by renewable energy transmission sources, is quickly becoming a decarbonizing hard-to-abate heavy industry, transport services, and heating discussion theme.
Over the past few months, green hydrogen has become a reality as evidenced by the scale of operation. Firms, investors and governments are investing billions of dollars in the hydrogen projects as they consider it to be the key factor to reduce the impact of climate change by alleviating the global energy crisis. The paper describes the recent trends in green hydrogen market, its global opportunities and challenges the industry still has to tackle to achieve its ultimate potential.
What is Green Hydrogen?
Hydrogen as an element is the most abundant in the universe although it is never found in pure form. Rather, it is normally combined with other components, i.e. in water (H 2 O ) or hydrocarbons (e.g. natural gas). Hydrogen has to be electrolyzed so as to make it useful as a clean source of energy.
In electrolysis, the water molecules are broken in to hydrogen and oxygen that are powered by electricity. In the case that this electricity is generated by means of renewable sources such as wind, solar or hydropower, the produced hydrogen is called green hydrogen. In contrast to hydrogen generated with the use of natural gas (which generates carbon dioxide), green hydrogen is a carbon-free solution, so it is a fundamental component of any decarbonizing plan.
Hydrogen green is multipurpose. It could be employed in the generation of electricity, fueling modes of transport (especially in industries that are hard to electrify such as shipments and the aviation industry), and a feedstock in industrial applications such as chemical manufacturing and steel manufacturing.
Green Hydrogen Investing on the Rise:
2023 was the year when the world seemed to ramp up interest and investment in green hydrogen, which was triggering a mixture of events, including geopolitical uncertainty, climate goals, and technology. A number of major hydrogen players have already gone far in developing green hydrogen, and increasingly, governments are declaring ambitious plans to incorporate hydrogen into their power grids.
1. The Green Hydrogen Leader in Europe:
Europe has become one of the green hydrogen leaders in the world. The European Union (EU) has set an ambitious goal to develop 10 million tons of green hydrogen per year by 2030 in order to increase its energy independence as well as lessen the use of fossil fuels. This will contribute to its larger Green Deal, which is to ensure that by 2050, Europe will be the first climate-neutral continent.
Nations such as Germany and Spain are at the forefront. Germany has invested over 9 billion euros in the development and research of hydrogen, and the goal is to make the country a major world player on the global scene. The state has also proposed to have a national hydrogen infrastructure that will entail building pipelines and storage. Spain has huge resources in renewable energy, and it is betting on large-scale production of green hydrogen to be part of Spain’s exports to other European countries.
Germany is not alone in its accelerating efforts to develop the hydrogen economy: the Netherlands is moving even faster, as is France, where in early 2023 the government announced a monumental 7 billion Euro hydrogen plan over the next 8 years to create the hydrogen production facilities, infrastructure, and the requisite supply chains to realize the hydrogen economy.
2. The Middle East: A Geopolitical Move to Hydrogen:
This is a fascinating geopolitical turn of events because conventional oil and gas players in the Middle East are gazing upon hydrogen as they seek to diversify their economies and decarbonize their economies. Some countries, such as Saudi Arabia and the United Arab Emirates (UAE) are betting a lot on green hydrogen in the context of their post-oil scenarios.
Saudi Arabia, with one of the cheapest renewable energy prices in the world, is gearing up to emerge as a major participant in the green hydrogen market. The government is planning a futuristic infrastructure project totaling up to 500 billion dollars, the NEOM in the northwestern region of the country, which is projected to be fully powered by renewable energy, including hydrogen production. In Saudi Arabia, the so-called Green Hydrogen Project could produce green hydrogen to sell on the international market with the support of international partners, including Air Products and ACWA Power.
UAE, via the Masdar project, is also catching up with the development of hydrogen as it invests both in local projects and in international consultations.
3. Asia: Strategic Hydrogen Agendas of China and Japan:
China, Japan, and South Korea are in the process of carving out their hydrogen strategies in Asia. China is the largest user and producer of hydrogen in the world, and it is investing in a hydrogen infrastructure to have everything, including transport, distribution, and industrial applications. But at present, the majority of the country in terms of hydrogen production is grey hydrogen (generated with the use of fossil fuels), so China will have to increase the volume of green hydrogen production to achieve its decarbonization goals.
Japan is a major actor in the hydrogen market and has set a goal to build a hydrogen-based society by 2050. The Japanese government has dedicated 1.7 billion dollars to hydrogen research and development, and it has also targeted fuel-cell vehicles as well as large-scale on-hydrogen storage and transportation technology. Toyota and Honda are already producing cars that run on hydrogen, and the nation is considering importing green hydrogen produced by other people.
South Korea also has a massive investment in green hydrogen, and the government has committed to creating a hydrogen economy as a part of the Green New Deal. The nation has made the pledge to make 5.9 million fuel-cell vehicles by 2040 and Hyundai Motor Company is leading the hydrogen fuel-cell tech.
The use of Green Hydrogen in Hard-to-Abate Sectors:
The attraction of green hydrogen is not only linked to its carbon-neutral properties but the prospect that it could be used to decarbonize those components of the economy that are finding it hard to electrify under the current renewable energy scheme.
