Deep reductions in global GHG emissions are urgently required to limit global warming and avoid damaging changes to earth’s climate. Increased use of hydrogen as a low-carbon energy carrier is part of the decarbonization strategies of many jurisdictions to mitigate a broad cross-section of emission sources such as transport, industry, electricity production, and heat. This blog will discuss some of the proposed sectors that are most likely to drive significant growth in hydrogen consumption.

Background

Hydrogen is a colourless, odourless gas at atmospheric conditions and requires extremely low temperature (<-240°C) or extraordinarily high pressure (tens to hundreds of GPa, e.g., the core of Jupiter) to become liquid or solid. It is a very small component of the atmosphere (<1 ppmv) as any molecules present can escape earth’s gravity.

Hydrogen is widely used today as an industrial feedstock for ammonia production, petroleum refining, and other chemical processes. Industrial hydrogen consumption has increased 50% over the past 20 years to 90 million tonnes in 2020 (figure below). Hydrogen can also be reacted with oxygen to produce energy – either combustion to produce heat or electrochemically to produce electricity and heat (i.e., fuel cell). It is a promising fuel for GHG abatement because its oxidation produces water with no carbon dioxide (CO2).

Annual worldwide industrial hydrogen consumption (Mt H2). Source: IEA.

Potential markets

Natural gas consumption has consistently grown over the past 50 years (figure below) and is a significant source of GHG emissions – e.g., 33% of overall emissions in Canada. Reducing demand for natural gas through efficiency improvements and electrification in the built environment is a crucial step in mitigating GHG emissions. However, achieving net-zero emissions will require more than just improved efficiency and some end-uses will be difficult to electrify.  Carbon capture and storage (CCS) may be economical for some large industrial end-uses but would be impractical for diffuse small-scale consumers.

Annual natural gas consumption (TW-h) – worldwide (purple, left axis) and Canada (blue, right axis). Data from Our World in Data.

Transitioning all natural gas consumption to hydrogen would have significant logistical and economic challenges such as replacing end-use appliances and ensuring material compatibility within the transmission and distribution network. However, 5-15%vol hydrogen could be blended into natural gas with minimal modifications to existing infrastructure and appliances. While hydrogen is more expensive than natural gas, it may be cheaper and more scalable than alternatives such as bioenergy. Aside from assisting with the challenging task of decarbonizing energy use in the built environment, hydrogen injection into the natural gas distribution system could also provide an early market to stimulate demand for hydrogen production and help realize economies of scale for other markets.

Increased use of hydrogen as a feedstock to reduce emissions from industrial processes is also being investigated. One key sector is steelmaking, which produces ~7% of global GHG emissions, because most facilities use of coal as a reducing agent for iron ore and rely heavily on fossil fuels for heat. GHG emission intensity from steel production declined until 1995 but has since stagnated at approximately 2.5 tCO2e/t steel (figure below) because predominant production technologies have matured and recent capacity expansion has mostly been in high-carbon intensity jurisdictions.

Global average emission intensity of steel production (tCO2e/t steel). Scope 1 is direct process emissions, scope 2 is emissions from production of electricity used in the steelmaking process, and scope 3 is indirect emissions (e.g., raw material supply). Source: Wang et al (2021).

Direct hydrogen reduction is an alternative steel production process that has been demonstrated at commercial scale and could be used instead of CCS to mitigate direct GHG emissions from steelmaking. The expected range of GHG abatement cost for direct hydrogen reduced steelmaking is similar to conventional processes with CCS, so the optimal approach for a particular facility may be determined by location-specific factors such as availability/cost of low-carbon hydrogen and whether there are nearby geologic reservoirs that could be used for sequestration of captured CO2. Financial incentives for decarbonization could lead to steel production relocating to jurisdictions that have one or both of these attributes. Several different processes using hydrogen are being developed with large-scale demonstration projects in operation or expected to be operating within the next few years.

Two other potential markets for low-carbon hydrogen are heavy-duty vehicles and rail transportation. Higher carbon content and cost of diesel fuel combined with low efficiency of internal combustion engines may provide more economical emission abatement than NG substitution. While manufacturers of personal vehicles are primarily pursuing battery-electric powertrains, hydrogen storage coupled with a fuel cell powertrain may provide weight and power delivery advantages for heavy-duty vehicle and rail applications and full-scale pilot projects are in progress (figure below).

Left: hydrogen fuel cell powered locomotive being tested by Canadian Pacific. Right: hydrogen fuel cell powered truck built by Cummins.

Seasonal energy storage, particularly from intermittent renewable energy sources, is another potential application for hydrogen. While battery storage is more efficient and cost-effective for short duration storage of excess electrical energy (e.g., diurnal to weeks), production of hydrogen via electrolysis has advantages for longer term storage due to lack of self-discharging and decoupling of energy storage capacity from conversion rate.

Some jurisdictions are also interested in utilising low-carbon hydrogen for energy trade. However, there are significant cost and efficiency barriers to storing hydrogen at sufficient density or producing liquid derivatives, such as ammonia, to make trans-oceanic shipping feasible.

Challenges

Using hydrogen as a fuel was initially proposed in the 1970s, primarily in response to concerns about air pollution and dependence on imported oil. There have since been many research initiatives, including a surge of interest from automobile manufacturers in the 1990s in response to California regulations mandating minimum sales of zero-emission cars. While the required technology has progressed (e.g., fuel cells and electrolyzers), the most significant challenges for hydrogen remain cost (both production and end-use) and lack of distribution infrastructure. Also, public acceptance of hydrogen technologies and infrastructure requirements is uncertain.

Despite these challenges, increased consumption of hydrogen is likely in the near future to address otherwise difficult to decarbonize sectors such as those described above. Unlike previous oil crises, the urgency to mitigate global warming will not be waning.