Goverment’s action needed to unlock growth for low-carbon hydrogen – IEA 2021 review

Oredola Adeola (with agency report)

The International Energy Agency(IEA) in its Global Hydrogen Review 2021, has challenged governments across the world to move faster and more decisively on a wide range of policy measures to enable low-carbon hydrogen to fulfil its potential to help the world reach net zero emissions while supporting energy security.

The position of the IEA was contained in its Global Hydrogen Review 2021 released Tuesday and obtained by EnergyDay.

According to IEA, “currently, global production of low-carbon hydrogen is minimal, its cost is not yet competitive, and its use in promising sectors such as industry and transport remains limited – but there are encouraging signs that it is on the cusp of significant cost declines and widespread global growth.
The report revealed that when the IEA released its special report on “The Future of Hydrogen for the G20″ in 2019, only France, Japan and Korea had strategies for the use of hydrogen, but in 2021, 17 governments have released hydrogen strategies, and that more than 20 others have publicly announced they are working to develop strategies, and numerous companies are seeking to tap into hydrogen business opportunities.

The report said, “Pilot projects are underway to produce steel and chemicals with low-carbon hydrogen, with other industrial uses under development. The cost of fuel cells that run on hydrogen continue to fall, and sales of fuel-cell vehicles are growing.

Fatih Birol, IEA Executive Director, in his remark on the report said, “It is important to support the development of low-carbon hydrogen if governments are going to meet their climate and energy ambitions.
“We have experienced false starts before with hydrogen, so we can’t take success for granted. But this time, we are seeing exciting progress in making hydrogen cleaner, more affordable and more available for use across different sectors of the economy.

” Governments need to take rapid actions to lower the barriers that are holding low-carbon hydrogen back from faster growth, which will be important if the world is to have a chance of reaching net zero emissions by 2050.

“Hydrogen is light, storable and energy-dense, and its use as a fuel produces no direct emissions of pollutants or greenhouse gases. The main obstacle to the extensive use of low-carbon hydrogen is the cost of producing it.

“This requires either large amounts of electricity to produce it from water, or the use of carbon capture technologies if the hydrogen is produced from fossil fuels. Almost all hydrogen produced today comes from fossil fuels without carbon capture, resulting in close to 900 million tonnes of CO2 emissions, equivalent to the combined CO2 emissions of the United Kingdom and Indonesia.

“Investments and focused policies are needed to close the price gap between low-carbon hydrogen and emissions-intensive hydrogen produced from fossil fuels.
“Depending on the prices of natural gas and renewable electricity, producing hydrogen from renewables can cost between 2 and 7 times as much as producing it from natural gas without carbon capture. But with technological advances and economies of scale, the cost of making hydrogen with solar PV electricity can become competitive with hydrogen made with natural gas, as set out in the IEA’s Roadmap to Net Zero by 2050.
The report further stated that “Global capacity of electrolysers, which produce hydrogen from water using electricity, doubled over the last five years, with about 350 projects currently under development and another 40 projects in early stages of development. Should all these projects be realised, global hydrogen supply from electrolysers – which creates zero emissions provided the electricity used is clean – would reach 8 million tonnes by 2030. This is a huge increase from today’s level of less than 50 000 tonnes – but remains well below the 80 million tonnes required in 2030 in the IEA pathway to net zero emissions by 2050.

“Practically all hydrogen use in 2020 was for refining and industrial applications. Hydrogen can be used in many more applications than those common today, the report highlights. Hydrogen has important potential uses in sectors where emissions are particularly challenging to reduce, such as chemicals, steel, long-haul trucking, shipping and aviation.

“The broader issue is that policy action so far focuses on the production of low-carbon hydrogen while the necessary corresponding steps that are required to build demand in new applications is limited. Enabling greater use of hydrogen in industry and transport will require much stronger policy measures to foster the construction of the necessary storage, transmission and charging facilities.

Countries with hydrogen strategies have committed at least USD 37 billion to the development and deployment of hydrogen technologies, and the private sector has announced additional investment of USD 300 billion.

But putting the hydrogen sector on path consistent with global net zero emissions by 2050 requires USD 1 200 billion of investment between now and 2030, the IEA estimates.
The IEA Global Hydrogen Review however highlight series of recommendations for near term-action beyond just mobilising investment in research, production and infrastructure. It highlights that governments could stimulate demand and reduce price differences through carbon pricing, mandates, quotas and hydrogen requirements in public procurement.

It stated that international cooperation is needed to establish standards and regulations, and to create global hydrogen markets that could spur demand in countries with limited potential to produce low-carbon hydrogen and create export opportunities for countries with large renewable energy supplies or large CO2 storage potential.

Engr. Justice O. Derefaka, Technical Adviser (TA), Gas Business & Policy Implementation to Minister of State, Petroleum Resources, revealed that the Nigerian Government is committed to delivering rising energy demand while also attempting to transition to a cleaner, lower-carbon energy system in order to combat climate change and air pollution.

He said, “Later that year, in Paris, world leaders, including Nigeria’s President, His Excellency, Muhammadu Buhari, agreed on 17-Sustainable Development Goals (SDGs), pledging to strive toward keeping global warming far below 2°C over pre-industrial levels, in order to prevent the more serious consequences of climate change.

“The use of energy products, like oil and gas and coal – for power, heating, cooling, industry, transport – causes the majority of the world’s greenhouse gas emissions. So, changing the mix of energy products in the energy system is essential to address climate change.

Tony Attah, MD/CEO of Nigeria LNG Limited recently at Energy BusinessDay’s Energy Series said “Natural gas is surely a cleaner fossil fuel but hydrogen is coming with a big bang too. Japan may soon become energy independent on hydrogen.