Use of Hydrogen Fuel Increasing in Industry, But Not Fast Enough, Says IEA Report

(Credit: IEA)

According to the International Energy Agency’s Global Hydrogen Review 2021, although hydrogen fuel adoption is increasing, the pace is not in line with the IEA’s Net Zero Emissions by 2050 Scenario, which requires hydrogen to supply 10% of final energy consumption.

There are signs of progress: global capacity of electrolyzers, which produce hydrogen fuel from electricity rather than natural gas, doubled over the past five years, and approximately 500 more projects are in some stage of development. Additionally, 16 projects for producing hydrogen from fossil fuels with carbon capture are operational today and another 50 are in development.

Although hydrogen fuel can also be used in transportation, the vast majority of it is currently allocated to refining and industrial applications.

Hydrogen is a key pillar of decarbonization for industry. Commenting on industry trends, IEA wrote,

“The world’s first pilot project for producing carbon-free steel using low-carbon hydrogen began operation this year in Sweden. In Spain, a pilot project for the use of variable renewables-based hydrogen for ammonia production will start at the end of 2021. Several projects at a scale of tens of kilotonnes of hydrogen are expected to become operational over the next two to three years. Demonstration projects for using hydrogen in industrial applications such as cement, ceramics or glass manufacturing are also under development.”

Still, even if these and all other announced industrial plans are realized, by 2030:

  • Hydrogen demand would exceed supply by a 2:1 ratio.
  • Low-carbon hydrogen production would be an eighth of what is needed in the NZE Scenario.
  • Electrolysis capacity would be a tenth of what is needed in the NZE Scenario.
  • Deployment of hydrogen fuel cell vehicles would be 40% of what is needed in the NZE Scenario.

To accelerate the adoption of hydrogen as a clean fuel, the IEA urges government action, including:

  • Outlining strategies with concrete production targets.
  • Creating incentives for replacing fossil fuel consumption with hydrogen consumption, including subsidies, carbon pricing, and quotas.
  • Providing support to hydrogen production projects to encourage investment.
  • Increasing hydrogen fuel R&D budgets to spur innovation.
  • Establishing a favorable regulatory framework.  

Hydrogen is a clean fuel at the point of consumption, emitting only water. The two most common methods of production are steam reforming, which uses high-temperature steam to isolate hydrogen from natural gas molecules, and electrolysis, which uses electricity to separate out hydrogen from water molecules.

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