Three import deals signed by the EU at Sharm El Sheikh during this month’s COP27 summit show the European Union is serious about harnessing green hydrogen for its heavy industry, and about distributing the fruits of the energy transition on an equitable basis.
With the COP27 climate summit over, progress has been made in helping hard-to-abate sectors of the global economy reduce their emissions. This is particularly the case when it comes to green hydrogen, with the EU announcing partnerships with Kazakhstan, Egypt, and Namibia to import renewable hydrogen – an important development which arguably has not received the attention it warrants.
Though hydrogen is no silver bullet to solve all of our problems, when applied correctly it has a critical role to play in transitioning our heaviest-polluting and most power-intensive industries. The iron and steel industry alone is responsible for 11% of global CO2 emissions, according to UK-based sustainable policy group Carbon Brief, and relies on coal furnaces at more than 60% of steelmaking sites. Alternatives such as electric arc furnaces can use recycled metals combined with hydrogen – or natural gas plus carbon capture – to reduce emissions but this has not yet become commonplace.
To contextualize this, analyst Wood Mackenzie says net-zero production of steel would require the annual production of 52 million tons of green hydrogen by 2050. With such huge quantities required, the fact the EU is recognizing the important role that developing countries can, and unquestionably will, play in realizing this figure is pivotal for our industry and the global transition more broadly. No wonder that 30% of the EU’s primary steel production could be decarbonized by 2030, based on the use of renewable hydrogen.
The three deals signed at COP27 will pave the way for hydrogen development for two reasons. Firstly, they are a clear indicator that the EU recognizes the potential of renewable hydrogen not just on its net-zero merits but also as an effective economic lever to drive international trade and cooperation with other states – ensuring the green transition does not come at the cost of economic growth.
Secondly, it is a clear acknowledgement that the transition must not be an inequitable one that further disadvantages developing countries to the benefit of those which already have the strongest economies. Rich in raw materials and existing industrial capacity, developing countries have the potential to be global bastions of green hydrogen and are already seizing the initiative. Kazakhstan is now building one of the world’s largest green hydrogen production facilities while Chile is already one of South America’s leaders in clean hydrogen and aims to become one of the world’s top three exporters by 2040.
These targets may have previously seemed unrealistic; now they are anything but. The rapid growth our industry has seen cannot be understated. Even as the most abundant element in the universe (making up approximately 75% of normal matter) production of hydrogen has long been expensive because the energy carrier has only been found in compound form and, therefore, requires huge amounts of energy to harness it. This has meant industries such as shipping and large scale manufacturing have remained fossil-fuel reliant. However, the developments at COP27 are a clear sign that the winds are changing to reflect the progress our industry has made in recent years.
At Hystar, we have developed the world’s most efficient PEM (polymer electrolyte membrane) electrolyzers, which produce up to 150% more green hydrogen than conventional systems. In the context of the 52 million tons of green hydrogen needed by 2050, such breakthroughs will have a significant impact on hydrogen commercialization. Such drastic savings, and ongoing technological breakthroughs, are paving the way for green hydrogen, in particular, to emerge as a clear and indisputable long-term solution within the energy transition. Major industry names Equinor and Yara have both joined Hystar’s HyPilot project, which will qualify our technology in field conditions.
Simply put, the idea that green hydrogen commercialization is anything but inevitable is one that should be quickly dispelled. Hydrogen’s potential to tackle pollution at scale, and now at cost, should be embraced equally by those who wish to see a cleaner planet and those who wish to see this achieved in an economically pragmatic way.
When it comes to the role of hydrogen in developing countries, its potential to further utilize renewable energy sources will be revolutionary for helping such nations grow their own green industries and promote energy security beyond just the West. By signing the COP partnerships, the EU has sent a clear signal that it recognizes these merits and will work to ensure they are attained.
This is where our efforts to commercialize hydrogen should be focused. Agreements like these will support developing countries and create durable supply chains. Focusing our attention on this will ensure that hydrogen commercialization occurs effectively and sustainably. It is only by optimizing hydrogen in heavy-polluting industries and using it as a key lever for economic growth that decarbonization can be achieved globally.
The widespread commercialization of renewable hydrogen is imminent and COP27 made that abundantly clear to those who still had any doubts. Green hydrogen has a vital role to play in realizing the global transition, decarbonizing the heaviest polluting industries and driving greener economies across the world.
About the author:
Fredrik Mowill is the co-founder and CEO of Hystar, the Norwegian high-tech hydrogen company. Hystar makes highly efficient PEM electrolyzers for the large scale production of green hydrogen and aims to be a global leader in the electrolyzer market this decade. Mowill has 20 years of experience as an executive, entrepreneur, and investor with advanced technology companies in the global clean energy industry.
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