The Climate Case for Hydrogen

It’s happening again. Lofty claims are being made about hydrogen, the most abundant element in the universe, to become the clean energy of the future. Should we believe the hype this time?

There are important signals that things are different this time. Back in the early 2000s, the United States and Europe touted the promise of hydrogen as a clean transportation fuel that would end our dependency on imported oil. While essential research and development was kickstarted at that time and continues today, economics along with production and handling challenges prevented the emergence then of a so-called “hydrogen economy.”

Today, the goal is much larger and far more serious – decarbonizing the U.S. and global economies by 2050 to avoid the worst effects of climate change. That refocus on carbon could be just what’s needed to strengthen the resolve to develop the needed technologies to realize the benefits of hydrogen. That’s why our recent Getting to Zero report includes several recommendations aimed at advancing this promising technology.

Generally, economywide decarbonization can be achieved through large-scale deployment of energy efficiency, transforming to net-zero electricity production, and electrifying end-use consumption wherever plausible. However, low-carbon fuels (e.g., renewable natural gas, biofuels, and energy carriers like hydrogen) will still be necessary in many applications. Particularly hard-to-decarbonize sub-sectors include long-haul transportation, and industrial processes and heating.

Hydrogen offers the potential to mitigate emissions from these challenging subsectors and nearly all transportation modes. It can be burned directly to generate heat or passed through a fuel cell to create electricity in a chemical conversion process. (Indeed, Toyota, Honda and Hyundai each produce a hydrogen fuel cell vehicle.) It can be blended with natural gas for use in existing power plants and home appliances. And, it can also reduce process emissions from steelmaking. Importantly, converting hydrogen into heat and electricity produces no air or greenhouse gas emissions—only heat and water. Additionally, hydrogen can be stored for long periods (i.e., weeks and months) and used on demand – a distinct advantage over current electric battery storage technology.

However, since hydrogen does not occur by itself naturally (i.e., it is found in compounds with other elements), it must be manufactured. And this is a key challenge. The primary pathway today is steam methane reforming (SMR), which creates hydrogen from natural gas, producing significant carbon dioxide emissions. In fact, more than 95 percent of global production is derived from fossil fuels. At current global levels (more than 70 million metric tons per year), hydrogen production is responsible for more than 830 million metric tons of carbon dioxide emissions annually, which is roughly equivalent to the annual greenhouse gas emissions of Germany (Europe’s largest economy).

But there are other, lower-emission pathways to produce hydrogen, including SMR with carbon capture technology, methane pyrolysis, which splits natural gas directly to create hydrogen and solid carbon, and electrolysis, which uses electricity to create very pure streams of hydrogen and oxygen from water.

Electrolysis-produced hydrogen using zero-emission electricity sources like hydro, wind, solar and nuclear power is a very promising clean energy pathway. Today, the price of this “green hydrogen” is more than twice that of uncontrolled SMR production. However, as production capacity and technology improves in the next decade, costs are expected to decline by 70 percent or more. Moreover, in certain U.S. regions, there is already surplus, inexpensive, clean electricity. Typically, overgeneration occurs during certain hours of the day when demand is low, production from renewable electricity is high and, at the same time, baseload units (e.g., coal and nuclear) are running, but cannot be easily turned down. With increasing deployments of variable renewable generation in the future, greater periods of overgeneration are expected. Large volumes of hydrogen could be produced during these periods to provide very low-cost seasonal storage for the energy system among its many other uses.

Last year, the Department of Energy announced that it is supporting three large utilities in their endeavors to demonstrate the production of commercial quantities of hydrogen through electrolysis at nuclear facilities, which could help improve the long-term competitiveness of the nation’s zero-emitting nuclear fleet and create a pathway for cleaner production from all non-emitting electricity sources. This hydrogen could supply public transportation, light-duty vehicles, steel plants, or be blended with natural gas to reduce emissions from “peaking” power plants.

Still, other challenges remain for hydrogen. Like any new energy source, the necessary infrastructure to store and distribute hydrogen to its ultimate end-use applications needs to be put in place. While hydrogen filling stations for passenger cars provide a similar experience to conventional gas stations for users in that they are able to refuel in just a few short minutes, the capital costs for hydrogen refueling stations are much greater than those for electric vehicle charging stations. Constructing refueling stations, storage facilities and a national pipeline network will require significant time and support from federal and state agencies.

The opportunity for hydrogen is tangible. Companies and countries are taking a fresh look. To be a net benefit to the climate, first and foremost we must produce hydrogen much more cleanly than we do today. Then, in addition to the current uses, we must expand the market, while building out the necessary infrastructure. Accumulated knowledge over the past 20 years, a far stronger imperative of net-zero emissions by mid-century, opportunity from an increasingly decarbonized power sector and its sheer usefulness across sectors mean there’s much greater reason to be optimistic about hydrogen this time around.