| Work Detail |
Following a global avalanche of green hydrogen announcements, fuel cell company insolvencies, and a sharp market revaluation, solar developers are questioning the near-term demand for green hydrogen. pv magazine s Carrie Hampel takes a look at the international landscape. The hydrogen economy is complex. While photovoltaics is largely dedicated to directly decarbonizing electricity grids, solar-powered hydrogen is often planned for remote areas with excess renewable energy. To go beyond the hype, it is necessary to understand how hydrogen is essential to the energy transition. Government hydrogen strategies typically identify green hydrogen as crucial for decarbonizing shipping, aviation, some long-haul trucking, ammonia and steel production, and other industrial processes. China also considers hydrogen essential for long-duration energy storage (LDES). The Hydrogen Hyperbole Over the past six years, the European hydrogen association H2UB has experienced a peak of inflated expectations and a trough of disillusionment. It says Europe is now entering a slope of enlightenment before reaching a plateau of productivity. Hydrogen makes various contributions to hard-to-leave industries. While it is essential for decarbonizing steel or the ammonia used in fertilizers, it plays a smaller, though crucial, role in greening other sectors. This can confuse and polarize the debate about green hydrogen. Renewable methanol is already used in road fuels, the chemical industry, and maritime transport. It could also be used in the aerospace industry through the methanol jetting (MTJ) process, although no commercial-scale MTJ facilities currently exist. Ethanol is obtained from captured CO2 and green hydrogen. One technological avenue for producing bioethanol is biomass gasification with green hydrogen as a feedstock, which could also create demand for green hydrogen. China and, more recently, India are rapidly advancing hydrogen in their energy policies. Beyond climate change mitigation, their goal is to reduce air pollution and pursue a geopolitical strategy away from volatile global oil markets. Europe and other regions are also vulnerable to geopolitical tensions over fossil fuels. Russia possesses abundant, easily extractable oil resources and is among the worlds largest oil exporters. As the Energy Research Institute of the Chinese Academy of Macroeconomics has shown (see chart below), hydrogen is expected to play a minor but crucial role in end-use energy demand through 2060. Driving forces Together, shipping and aviation are the main drivers of hydrogen derivatives in so-called low-carbon fuels. Shipping is poised to increase its consumption, largely thanks to the European Unions requirements for green fuels. As with aircraft, fuel cells can power ships directly or through e-fuels such as methanol fuel cells. Most current orders are for combustion engines powered by green fuels, such as hydrogen derivatives. Vitalii Protasov of Finnish renewable fuels analytics firm Gena Solutions said the European Union is driving regulations to decarbonize shipping, but noted that the International Maritime Organization (IMO) is also expected to introduce medium-term measures by 2025, setting the international pace for increasing the share of low-carbon fuels. Protasov stated that green methanol for direct use, unlike hydrogen, can be transported as easily as fossil-fuel-based methanol. The difference lies in its carbon intensity and price. “The problem with [green] methanol is that there is enormous demand potential, especially in the maritime sector, but the volume of binding long-term purchase contracts is very small,” he explained. “There are also other problems, such as high costs compared to conventional fuel. So, either regulations that encourage the use of renewable fuels are needed, or regulations that prohibit or penalize the use of conventional fuels.” Aviation is arguably the biggest challenge for transport decarbonization. Batteries dont have enough energy density to power aviation beyond small, local aircraft. Hydrogen can be used directly, for example, in fuel cell-powered aircraft for short distances, or it can power the e-fuels used in Sustainable Aviation Fuels (SAF) and other fuels, replacing the limited organic matter. Most airlines have begun investing in SAF-powered flights to comply with recent regulations. Many have also invested in fuel cell aircraft, such as KLM and American Airlines, among others. In the United States, the newly merged regional carriers Alaska Airlines and Hawaiian Airlines have partnered with hydrogen-electric aircraft company ZeroAvia to develop aircraft for short-haul routes. Diana Birkett Rakkow, Alaska Airlines senior vice president of sustainability, explained that approximately 15% of the airlines network routes are less than 500 nautical miles (926 km), meaning they can be served by hydrogen-powered aircraft. Marina Hritsyshyna, a hydrogen regulatory expert who has worked in renewable energy law since 2016, told pv magazine that “the regulatory framework is crucial, as it sets a clear path for the development of the energy sector.” The ReFuelEU Aviation and FuelEU Maritime regulations play an important role, said Hritsyshyna, who also cites the EUs targets set out in RED III, the blocs third Renewable Energy Directive, for renewable fuels. This will require member states to meet specific quotas, which will facilitate the growth of the hydrogen market, said Hritsyshyna. Simultaneously, the implementation of the ETS [Emissions Trading System] is expected to reduce the use of fossil fuels, driven by rising carbon prices in the aviation and maritime sectors. Road transport Hydrogen fuel cells have a higher energy density than batteries, but are less energy efficient in small vehicles. Hydrogen strategies in the United States, Europe, and China consider some trucks and buses as use cases for fuel cell vehicles. Infrastructure plays an important role, as battery-powered electric truck stops require as much energy to recharge as a small city. Trucking corridors create immediate demand for hydrogen-based industrial centers, which already present viable business cases. Reinhold Wurster, project manager at the German consulting firm Ludwig-Bölkow Systemtechnik (LBST), explained how far China has come. Chinas last five-year plan set a goal of introducing 50,000 fuel cell vehicles by 2025, but Wurster explained that most of the 20,000 to 21,000 fuel cell vehicles on Chinese roads are trucks and buses. China needs to introduce another 30,000 fuel cell vehicles this year, Wurster said. The numbers Ive seen from the various clusters seem promising. They want a more comprehensive hydrogen technology innovation system, with clean hydrogen production and supply systems, and this system should be mature by 2035. Chinas big industries The study, “Enhancing a Just Transition Finance System for Carbon-Intensive Industries,” focuses on ongoing efforts to decarbonize China’s steel and shipbuilding sectors. Commissioned by the German political foundation Friedrich Ebert Stiftung, researchers at Duke Kunshan University in China revealed that hydrogen is already embedded in efforts to decarbonize Chinese industries, which produce around half of the world’s steel and a third of global shipping volumes. The study cites the example of a Shanghai steel company that “has effectively reduced its carbon emissions by 20% and cut solid fuel consumption by 30% through energy substitution, process optimization, and the adoption of innovative technologies such as hydrogen-enriched carbon recycling blast furnaces.” International routes Hydrogen has its limitations. Fossil fuel giant BPs Global Energy Outlook 2024 report notes that the relatively high cost of transporting hydrogen, especially in its pure form, means that trade in low-carbon hydrogen is concentrated in relatively localized regional markets. For example, hydrogen production is fueled by wind power in the Nordic countries and solar energy in Southern Europe and the Middle East. The United States, for example, has the advantage of an energy-intensive industry and abundant renewable energy generation potential. It could become a hydrogen exporter. Pipelines and storage Hydrogen strategies typically contemplate pipelines for the direct transport of hydrogen between neighboring regions. Existing fossil fuel infrastructure is often reusable for different aspects of the hydrogen economy. Governments hope to utilize existing pipeline infrastructure or build new ones. Wurster explained Chinas foray into direct hydrogen storage and pipelines. No country knows better where the battery limitations are, he said. Ten years ago, they built a 1,800-km high-voltage direct current transmission line from Inner Mongolia in 18 months, with 67,000 support towers. So China is certainly a country capable of rapidly building high-voltage direct current transmission lines. But a single pipeline, 1,200 mm in diameter, can carry 40 GW [of hydrogen]. This is 10 times what the overhead cables of high-voltage direct current transmission lines carry today, which is 4 GW… no one can guarantee that the electricity produced will be available when consumers need it, and vice versa, and beyond a certain limit it will no longer be possible to store it in batteries because it will be too expensive and require too many materials. Chinas hydrogen pipeline infrastructure is still in its infancy, Chinese media outlet Sohu.com reported in January 2025. But the countrys industrial development plan targets 3,000 km of long-distance hydrogen pipelines by 2030. China isnt necessarily ahead of the European Union, the United States, or the United Kingdom. Numerous studies have shown that Europe has the potential to excel in various hydrogen technologies, but China is fast. If the West focuses too much on short-term political concerns, it will lose its competitive advantage. Regulatory expert Hritsyshyna notes: “The European Commission is also expected to adopt the Clean Industrial Deal and the Affordable Energy Action Plan in February [2025]. In addition, the European Commission has presented a list of initiatives planned under the Competitiveness Compass, which aims to accelerate the deployment of clean technologies to achieve climate neutrality in the EU,” Hritsyshyna adds. What does all this mean? It means that hydrogen economies are developing internationally. Short-term thinking will be a disadvantage on the international stage. |
