{"id":1210,"date":"2021-04-13T02:14:36","date_gmt":"2021-04-13T02:14:36","guid":{"rendered":"http:\/\/eos.co.id\/main\/?p=1210"},"modified":"2021-04-13T02:14:36","modified_gmt":"2021-04-13T02:14:36","slug":"making-green-hydrogen-a-global-trade-commodity-for-enhanced-climate-ambition","status":"publish","type":"post","link":"https:\/\/eos.co.id\/main\/uncategorized\/making-green-hydrogen-a-global-trade-commodity-for-enhanced-climate-ambition\/","title":{"rendered":"Making Green Hydrogen a Global Trade Commodity for Enhanced Climate Ambition"},"content":{"rendered":"\n

Source >>><\/a><\/h3>\n\n\n\n
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Image by Csaba Nagy from Pixabay<\/p>\n\n\n\n

STORY HIGHLIGHTS<\/strong><\/p>\n\n\n\n

Ambitious climate policy targets are driving interest in various applications of hydrogen as a potential source of dramatic reductions of GHG emissions.<\/p>\n\n\n\n

While international trade offers win-win prospects both for exporters and importers of hydrogen, economic and policy challenges are yet to be resolved.<\/p>\n\n\n\n

Clear and coherent policy signals, as well as unified standards and certification, are essential for the smooth commencement and functioning of the hydrogen market.<\/p>\n\n\n\n

To comply with the Paris Agreement on climate change, a growing number of countries are setting ambitious greenhouse gas (GHG) emissions reduction targets for the coming decades to achieve carbon neutrality. Suriname and Bhutan have already become carbon-neutral, largely due to small populations and dense forests absorbing large amounts of carbon dioxide (CO2). Denmark, France, Hungary, New Zealand, Sweden, and the UK have written their net-zero commitments into law. The EU and five other countries (Canada, Chile, Fiji, the Republic of Korea, and Spain) have included net-zero targets in proposed legislation. Fourteen states mention net-zero commitments in policy documents, and almost a hundred other countries<\/a> are currently discussing potential adoption of net-zero targets.<\/p>\n\n\n\n

While mid- and long-term climate commitments have become more ambitious in many parts of the world, policymakers are searching for policies and technologies to deliver on announced pledges.<\/p>\n\n\n\n

The versatility of hydrogen as chemical storage, energy carrier, and feedstock for industrial production is compelling for politicians and business. Increased hydrogen use can substantially reduce GHG emissions in hard-to-abate sectors, particularly steel and cement production, heavy-duty transportation, shipping, and aviation, help to address challenges in balancing intermittent renewables, and reduce air pollution in cities.<\/p>\n\n\n\n

Numerous pilot projects examining various applications for hydrogen use and feasibility studies for its transportation are currently underway. Governments across the globe are developing hydrogen strategies to pioneer the field and establish leading positions in the emerging market. Eighteen countries accounting for over 70% of global gross domestic product (GDP<\/a>) have already developed or are in the process of developing hydrogen strategies.<\/p>\n\n\n\n

Although no emissions are produced when hydrogen is burned, the full lifecycle GHG emissions depend on the production technology. The International Renewable Energy Agency (IRENA)<\/a> uses color coding to distinguish between the types of hydrogen with different environmental impact depending on the production process and feedstock used. Grey is used for fossil fuel-based hydrogen, blue \u2013 for fossil fuel-based hydrogen combined with carbon capture, utilization and storage (CCUS), and green \u2013 for hydrogen produced from renewable electricity, which is often referred to as clean, environmental, or renewable hydrogen.<\/p>\n\n\n\n

Only green and, potentially, blue hydrogen can contribute to a large-scale reduction of GHG emissions. While several countries are considering the development of blue hydrogen production to meet their climate targets, it is questionable whether this technology can deliver sufficient reductions of GHG emissions as current flagship CCS projects<\/a> capture only about a third of CO2 emissions of coal-fired units.<\/p>\n\n\n\n

Countries across the globe vary greatly in terms of availability of renewable energy resources needed to meet the expected demand for green hydrogen. According to Bloomberg New Energy Finance (BloombergNEF)<\/a>, China, Japan, the Republic of Korea, South East Asia, and most European countries are likely to face a deficit of renewable power generation capacities due to the lack of sites for further expansion of renewables.<\/p>\n\n\n\n

At the same time, many countries with vast territories and abundant renewable resources such as Australia and Saudi Arabia could have a surplus of green hydrogen, which could help to meet the demand in other countries. As in the case of other commodities, international trade can help to address these imbalances and benefit both exporters, while supporting GDP growth and job creation, and importers in terms of meeting their climate goals. For example, Germany and Japan have already initiated pilot projects and partnerships for intercontinental shipping of hydrogen. McKinsey and the Hydrogen Council estimate the potential size of the global hydrogen market at USD 2.5 trillion by 2050<\/a>. However, to what extent and when hydrogen will become a globally traded commodity is contingent on several factors discussed below.<\/p>\n\n\n\n

Current and expected competitiveness of green hydrogen<\/strong><\/p>\n\n\n\n

According to IRENA<\/a>, while renewable hydrogen is currently expensive, it can be cost-competitive with fossil fuel-based hydrogen equipped with CCS under optimal conditions. For example, a low-cost electrolyzer of USD 200\/kW is expected to be achieved at broad scale from 2040, and renewable electricity of USD 23\/MWh has already been reported in Brazil and Saudi Arabia. In about ten years from now, green hydrogen production costs are expected<\/a> to fall substantially, making it cost-competitive with blue hydrogen, while the projected gains associated with the reduction of CCS technology costs are limited. By 2050, renewable hydrogen production costs are predicted to fall to between USD 0.7 and USD 1.6\/kg, making fossil fuel-based hydrogen generation uneconomic in most parts of the world.<\/p>\n\n\n\n

However, for these projections to become a reality, hydrogen production needs to be scaled-up substantially. As renewables are becoming cost-competitive<\/a> with fossil fuels in a number of regions around the world, and many governments have already shifted to auction-based mechanisms to support large-scale projects, hydrogen technologies are increasingly the subject of discussion as a destination for state subsidies. Whereas current support to hydrogen<\/a> is limited and mostly focused in the transport sector, policy support measures for other sectors could help to support the uptake of hydrogen technologies.<\/p>\n\n\n\n

BloombergNEF<\/a> estimates that around USD 150 billion in cumulative subsidies will be needed by 2030 to massively scale-up production of green hydrogen. Today, USD 120 billion of global fossil fuel subsidies<\/a> is provided annually. Introduction of massive support to green hydrogen technologies<\/a> while fossil fuel subsidies continue to be doled out could result in inefficient spending of public funds with limited effect. To ensure that hydrogen support measures are efficient and effective, fossil fuel subsidies would need to be removed.<\/p>\n\n\n\n

A certain level of carbon pricing would also be needed even when hydrogen production costs fall to USD 1\/kg, to put a cost on GHG emissions and ramp-up competitiveness of hydrogen compared to cheap fossil fuels in sectors that are hard to decarbonize. It is estimated<\/a> that a carbon price of about USD 50\/tCO2<\/sub> would be needed to incentivize substitution of coal for hydrogen in the steel industry, USD 60\/tCO2<\/sub> to stimulate the use of hydrogen for heat generation in cement manufacturing, USD 78\/tCO2<\/sub> to build hydrogen use in the chemicals industry, and USD 145\/tCO2 to provide clean fuel for shipping.<\/p>\n\n\n\n

Availability of infrastructure<\/strong><\/p>\n\n\n\n

BloombergNEF suggests transportation of hydrogen via existing natural gas grids is the most cost-effective option<\/a>.  However, natural gas networks need to be tested to define technical safety conditions to repurpose them for hydrogen use. IRENA reports<\/a> that in most cases hydrogen can be blended with natural gas at low shares (up to 10-20%) and used in existing networks without major technical difficulties and investments.<\/p>\n\n\n\n

Several European countries have already conducted or are currently testing their gas transportation systems for compatibility with hydrogen. Snam is the first European energy company to have successfully tested a mix of 5% and 10% hydrogen and natural gas in its transmission network back in 2019. According to the company, about 70% of the gas network in Italy is hydrogen-ready<\/a>, and this share can be increased further by implementing certain system upgrades. In 2020, Ukraine also started testing its gas network<\/a> for transportation of a mix of natural gas and hydrogen. <\/p>\n\n\n\n

In July 2020, 11 gas companies from nine EU countries presented a plan for the development of a dedicated hydrogen transportation network, the European Hydrogen Backbone<\/a>. Mainly based on converted natural gas pipelines, the network would stretch some 6,800 km by 2030 and 23,000 km by 2040 to facilitate transportation of hydrogen produced within Europe from wind and solar power as well of imported hydrogen. Repurposed natural gas networks are thus likely to become the first widely used transportation route for cross-border hydrogen trade.<\/p>\n\n\n\n

Shipping hydrogen in liquid form, much like liquified natural gas (LNG), or in the form of ammonia, methanol, or liquid organic hydrogen carriers, with reconversion at the point of destination, offers technically possible but expensive options<\/a>. Nevertheless, these may become feasible<\/a> in countries and regions where renewable hydrogen can be produced at lowest cost, such as Africa, Australia, Chile, and the Middle East. Though pilot projects and partnerships are being developed in this field, technical and economic challenges are yet to be resolved for large-scale intercontinental trade to become a reality.<\/p>\n\n\n\n

Establishing the right policy signals, standards, and certification<\/strong><\/p>\n\n\n\n

According to the International Energy Agency (IEA)<\/a>, most of hydrogen currently used in industrial processes is supplied from natural gas, followed by coal. A small fraction comes from oil, and only 0.1% from water electrolysis. Yet as renewable energy costs plummet and reductions of electrolyzer costs look more promising, hydrogen technology powered by renewable electricity is expected to make a significant contribution to the carbon-free economy in the coming decades.<\/p>\n\n\n\n

The EU\u2019s Hydrogen Strategy<\/a> sets development of renewable hydrogen as a priority for the region, while recognizing that low-carbon hydrogen (nuclear and fossil-based hydrogen with carbon capture) will be necessary in the short and medium term to rapidly decrease GHG emissions of existing hydrogen production facilities and accelerate infrastructure development. Sweden and Germany<\/a> have signaled they only count on fossil-free hydrogen to meet their climate policy goals, and target their state support only to green hydrogen technologies. Speaking at IISD\u2019s Virtual Forum on Hydrogen Economy<\/a>, Sebastian Carbonari from Swedish Ministry of Infrastructure said measures to promote hydrogen, including infrastructure, \u201cshould not imply indirect support to natural gas.\u201d<\/p>\n\n\n\n

While the IEA considers<\/a> blue hydrogen a bridging option for energy transition at the global level, policymakers should exercise caution in channeling considerable public funds to CCS to prevent lock-in effects in the future. As green hydrogen is projected to become broadly competitive by 2030, fossil-based hydrogen production facilities with CCS are at risk of becoming \u201cstranded assets.\u201d IRENA<\/a> has also raised concerns that \u201cfossil CCS investments may divert limited capital away from renewable energy deployment back to fossil fuels.\u201d Policy signals need to be clear and coherent to prevent the market heading in the wrong direction.<\/p>\n\n\n\n

Further, the introduction of standards for hydrogen quality and safety of its transportation and storage as well as certification of origin and carbon intensity is essential for global hydrogen trade to take off. While all green hydrogen is low-carbon (provided its production from renewable energy sources is proven), estimation and certification of blue hydrogen\u2019s carbon intensity is likely to pose challenges. This provides an additional advantage for green hydrogen to become the default for global trade. Whereas several countries and organizations have initiated the development of certification schemes, such as Certifhy<\/a> in the EU and the Australian Hydrogen Certification Scheme<\/a>, it is important to coordinate efforts from the outset to ensure standards are compatible across the board.<\/p>\n\n\n\n

Although hydrogen use is currently limited to onsite industrial applications, there is a potential for a massive scale-up of hydrogen production for other applications, which is largely driven by ambitious climate policy. While countries with abundant renewable energy resources can rapidly increase hydrogen production and even achieve a surplus, renewable resources of other countries are not enough to meet projected domestic demand for low-carbon fuels and feedstocks. Once technical and economic challenges are resolved, international hydrogen trade can address potential imbalances and benefit all.<\/p>\n\n\n\n

By <\/em>Yuliia Oharenko<\/a>, Associate, IISD Energy Program,<\/em> and <\/em>Richard Bridle<\/a>, Senior Policy Advisor, IISD.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Source >>> Image by Csaba Nagy from Pixabay STORY HIGHLIGHTS Ambitious climate policy targets are … Continue ReadingMaking Green Hydrogen a Global Trade Commodity for Enhanced Climate Ambition<\/span><\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/posts\/1210"}],"collection":[{"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/comments?post=1210"}],"version-history":[{"count":1,"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/posts\/1210\/revisions"}],"predecessor-version":[{"id":1212,"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/posts\/1210\/revisions\/1212"}],"wp:attachment":[{"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/media?parent=1210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/categories?post=1210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eos.co.id\/main\/wp-json\/wp\/v2\/tags?post=1210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}