ESG Club
GREEN HYDROGEN – WHY IS IT SO CRITICAL?
Hydrogen can be seen as the answer to the challenge of reaching net-zero emis- sions as long as it can be produced without emitting CO2
– in other words, as long as it is green.
Its characteristics have earned it the mon- iker ‘the Swiss Army knife of decarboni- sation’¹ – a reference to its uses as a fuel to power a heavy-duty truck or a cargo ship, or to generate electricity, or even its use to store energy. Unsurprisingly, it figures in government net-zero plans, not least because of its potential to enable the decarbonisation of ‘hard-to-decarbonise’ and energy inten- sive sectors such as steel or shipping.
The EU has assigned hydrogen a key role in its Green Deal aimed at achieving car- bon neutrality in the EU by 2050.² Experts have forecast that hydrogen will be at the heart of the energy transition. Citing a need for clean electricity and clean fuels, the US government sees hydrogen as offering a path to sustainable long-term economic growth. Under its Hydrogen Program Plan, it has commit- ted to developing the technologies that
can enable a hydrogen transition in the US. It wants to double or quadruple pro- duction and cut the costs of green hydro- gen by two to three times.
China has included hydrogen as one of its ‘six industries of the future’ in its latest five-year plan, signalling that the country will invest significantly in hydrogen inno- vation and development. As the world’s largest greenhouse-gas emitter³, China has set an objective for peak CO₂ emis- sions before 2030 and to achieve carbon neutrality by 2060.
One challenge is to decarbonise hydrogen production. That involves moving away from hydrogen sourced from natural gas (grey hydrogen) towards low carbon hydrogen (blue hydrogen; CO₂ emitted during production is captured and stored) and ultimately to clean green hydrogen. This uses renewable energy sources such as wind and solar power for production (see infographic).
Another challenge is how to scale up cost- efficient production, transport and con- sumption. The issues are around ade- quate renewable power generation, long-term
and large-scale storage of
renewables, and ensuring distribution infrastructure is in place, e.g., installing hydrogen refuelling stations along motorways.
PI Partnership – BNP Paribas Asset Management
The infographic below shows why green hydrogen matters and what the opportu- nities are.
1) Source: Julio Friedmann, senior research scholar at Columbia University’s Center on Global Energy Policy, in Biden administration and industry alike see hydrogen as ‘Swiss Army knife’ for eliminating emissions 2) Also see In focus: Hydrogen – driving the green revolution on
https://ec.europa.eu/info/news/focus-hydrogen-driving-green-revolution-2021-abr-14_en 3) Also see China’s hydrogen roadmap: 4 things to know on
https://asia.nikkei.com/Spotlight/Caixin/China-s-hydrogen-roadmap-4-things-to-know
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36 | portfolio institutional | November 2021 | issue 108
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