Clean hydrogen crucial for net-zero goals

Clean hydrogen crucial for net-zero goals

17 Feb 2021

The development of green and blue hydrogen will grow at rapid pace in the coming years, and is expected to play a vital role in meeting global and domestic carbon reduction targets by 2050

Green hydrogen is increasingly being proclaimed as the missing piece of the puzzle for the energy transition, establishing a carbon-free alternative for processes in the industrial and transport sectors in addition to offering a solution for storing and transporting green electricity to areas that need it most.

The development of green hydrogen will grow at rapid pace in the coming years, and is expected to play a vital role in meeting global and domestic carbon reduction targets by 2050. In addition to providing a cleaner solution to traditionally carbon-intensive industries and transport sectors, the push for green hydrogen will accelerate the development of renewable energy – which has already hastened dramatically over the past five years as the cost of renewables has plummeted.

The push for green hydrogen gained significant political momentum in 2020, with the EU drawing up an ambitious green hydrogen strategy for 2030, which if successful will result in hundreds of billions of Euros investment. Closer to home, the announcement in July that Saudi Arabia had signed up investors to deliver a $5bn green hydrogen facility at its futuristic Neom development.

The momentum towards ambitious clean hydrogen programmes has continued into 2021.

In January, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman proclaimed that the kingdom was planning to become a global producer and exporter of green and blue hydrogen.

Blue hydrogen is when hydrogen is produced from gas but the carbon emissions from the process are captured and not released into the atmosphere.

The UAE has also moved to position itself as a potential global player in the clean hydrogen market. In January, state wealth funds Mubadala and ADQ signed an agreement to form a hydrogen alliance with state oil major Abu Dhabi National Oil Company (Adnoc) with the aim of establishing Abu Dhabi as an international player in green and blue hydrogen.

Read more in Energy & Utilities’ look at the potential for GCC oil producers to establish themselves as major producers and exporters in the impending clean hydrogen boom.

While green hydrogen has quickly been gaining political traction, business momentum will take longer as the costs of integrating green hydrogen into industries are not yet cost effective. This is expected to change soon, however, with the IEA estimating that the cost of producing green hydrogen will fall by 30 per cent by 2030. As more technologies and competitors enter the market on the back of major political announcements, the price will fall further.

While the costs of producing green and blue hydrogen will fall over the next decade, the sector will require massive investments from governments and private companies if the market is to flourish. For businesses and investors to feel comfortable and ready to divert funds into hydrogen, the strategies and agreements announced must be supported by adequate and comprehensive policies and regulatory frameworks. This should be viewed as a priority for governments and economic blocs such as the EU if they want to deliver on ther ambitious hydrogen plans.

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