It’s the simplest, most abundant element in the universe and it’s been a key component of industrial processes for years. It should be old news, but hydrogen has become the subject of unprecedented interest in recent years, as a replacement for fossil fuels in a net zero world. When this colourless, odourless, non-toxic but highly combustible gas is burned to generate energy, the only emissions are water in the form of steam. 

As countries work to decarbonize their economies by 2050, many are exploring the potential of hydrogen not only to heat homes, power cars and balance energy grids, but as the key to cleaning up hard-to-abate sectors that are not easily electrified, such as industrial manufacturing, heavy-duty transport and aviation. More than 30 national governments have produced strategies that aim to create a new hydrogen economy – the EU, for example, wants to generate 1 million tonnes of renewable hydrogen a year by 2024, rising to 10 million by the end of the decade. Hydrogen’s proponents call it “the Swiss army knife of energy solutions”, and argue that it represents the missing piece in the renewable energy puzzle, addressing both intermittency and storage issues. The Hydrogen Council, an industry body founded in 2017, says it could fulfil one fifth of the world’s energy requirements by 2050, by which time Goldman Sachs estimates that the potential global market could be worth US$11.7 trillion. 

But if any of this is to come to fruition, hydrogen will first have to overcome not only significant technical challenges – it requires nothing less than a completely new infrastructure – but perception problems too. Its reputation is still haunted by the 1937 Hindenburg disaster that killed 35 people when the hydrogen-fuelled airship exploded, the cause still undetermined. There are also questions about how sustainable hydrogen production really is. Today, the vast majority of industrial hydrogen is generated from natural gas, methane or coal, but hopes for the future are pinned on developing two new methods. “Green” hydrogen is made by splitting water using electrolysis powered by renewable energy; “blue” hydrogen is derived from natural gas with the resulting CO2 captured and stored. Both methods result in a combustible energy source without releasing further carbon to the atmosphere, but only the first is truly zero-carbon. Critics point to the fact that it will be impossible to produce green hydrogen at scale quickly enough and that, until then, it remains a fossil fuel. They fear that it will distract attention from renewables such as solar and wind, and allow the world’s largest emitters to carry on business as usual. Others argue that blue hydrogen offers a pragmatic solution to reduce emissions in the short term, and that we cannot afford not to leverage existing infrastructure and supply chains in the rush to net zero. 

Different paths to net zero 

The ultimate destination may be the same, but countries’ intended paths to a hydrogen economy take different routes, dependent on their current energy and economic mix. Canada, the world’s sixth-largest energy producer, is betting heavily on hydrogen to decarbonize an energy sector that contributes more than 10% of its GDP, predominantly from oil and gas. The Canadian government’s Hydrogen Strategy, released in December 2020, builds on its existing strength in natural gas to envisage an industry that could be worth C$50 billion by 2050, creating 350,000 jobs and significantly advancing its progress to net zero by meeting up to 30% of the country’s energy needs. 

This is an essential first step to a fully decarbonized world, believes Daniel Matthews, director of projects, energy, resources & industry at WSP Canada. “It took 100 years to develop the oil and gas infrastructure that drives our economies today, and constructing a hydrogen economy will not happen overnight,” he says. “The energy sector will need Provincial and Federal support to bring to fruition the vision of the energy transition. To bridge the gap between existing energy infrastructure and a low carbon energy future, Canada is exploring different pathways to produce and utilize hydrogen, starting with the potential for small ratios of hydrogen-blended natural gas in existing gas pipelines.”

This approach would allow the redeployment of Canada’s entire hydrocarbon workforce, he adds, which could otherwise be left behind by the energy transition: “It’s imperative that we move quickly to evaluate the potential of hydrogen at this stage, otherwise we're going to miss a big opportunity.” 

One of the biggest obstacles to deploying hydrogen at-scale is solving supply and demand concurrently, says Sabina Russell, principal at Zen Clean Energy Solutions, which acted as a lead author for the Canadian strategy. “It’s challenging for investors to commit funds to develop hydrogen supply and distribution infrastructure assets when there isn’t certainty of demand, through solid hydrogen offtake agreements. On the flip side, if there isn’t certainty in local hydrogen supply and fuel pricing, it can be a non-starter to get adoption off the ground.” To solve this, Canada is aiming to establish hydrogen hubs where the full value chain is developed at-scale in a concentrated geographic region, with multiple end-use applications sharing a common infrastructure. 

It is now looking for industry champions to help get them off the ground, though government too will have to play a role, adds Russell. “It requires significant coordination among consortium partners across the value chain to develop these projects. Regional and federal governments need to support with incentives and through regulatory measures to create the demand to adopt low-carbon fuels.” 

The UK government is taking a similar approach, placing zero-carbon industrial clusters, powered by hydrogen, at the heart of its 2050 net zero commitment. One such project is HyNet North West, for which WSP in the UK is acting as an advisor. With a phased delivery starting as early as 2025, HyNet will supply energy-intensive industrial users as well as, ultimately, domestic heat customers, flexible power generation and fuel for buses, trains and trucks. 

Chile’s green hydrogen revolution 

For countries without existing capacity in natural gas, building a greenfield green hydrogen infrastructure is a much more attractive option. Chile is in a very different situation to Canada, relying on imports of coal, natural gas and petroleum to meet 90% of its energy requirements. But it does have huge renewable resources in the form of solar and wind power, so developing a national green hydrogen infrastructure represents the chance not only to cut its emissions but, crucially, to secure energy independence. This is the aim of its National Green Hydrogen Strategy, published in late 2020.

This will enable the country to transform some of its biggest and most carbon-intensive industries, says Guillermo Diaz Del Rio, Future Ready leader at WSP Chile. Chile is the world’s largest producer of copper and the second largest producer of lithium, and mining accounts for 10% of its GDP. “We see huge potential to decarbonize Chile’s mining sector by replacing the diesel used in haulage activities with green hydrogen-based fuel,” he says. “Each of the mining trucks is currently responsible for about 3,000 tonnes of CO2eq a year, and with demand for Chile’s minerals growing globally, our mining and hydrogen aspirations will be closely linked going forward.” 

The benefits of green hydrogen for heavy transportation in other sectors will also be significant in a country that stretches 4,000km from north to south. In addition, the strategy identifies opportunities to decarbonize Chile’s agricultural sector through the use of fertilizers based on green ammonia.  

A number of pilot projects are planned across the country. One example is HyEx, a collaboration between energy firm Engie and mining explosives manufacturer Enaex, which will involve the construction of a 2,000MW solar farm in the Antofagasta region, powering a 1,600MW hydrogen electrolysis plant to produce 124,000 tonnes of green hydrogen annually. This will feed an ammonia plant generating 700,000 tonnes of green ammonia annually, half of which is destined for domestic use in Enaex’s ammonium nitrate plant, fuel and green fertiliser production, and the remainder for export. 

Sweden, recognized as a global leader in decarbonization, is also focusing on green hydrogen, in particular on using it to clean up one of the toughest industrial targets: steelmaking. The government’s Fossilfritt Sverige (Fossil Free Sweden) initiative aims to build a strong industrial sector, creating jobs and export opportunities, by moving away from the use of fossil fuels. “Our steel majors are seeing a market that is increasingly willing to pay the premium for green steel, and investors who are expecting it,” says Claes af Burén, energy team leader at WSP Sweden. 

Blue hydrogen was never going to be an option here, he explains: natural gas accounts for less than 2.5% of its energy mix, and its limited gas infrastructure is in the southwest of the country, while steel production is concentrated in the north. Af Burén’s team is involved in several projects in the Nordics, ranging from market and site locations studies to basic design. 

One example of this green transformation is the H2 Green Steel in Norrbotten which will include an integrated giga-scale hydrogen plant, with annual production capacity reaching 5 million tonnes of green steel by 2030. Meanwhile, in Luleå, Hybrit – a collaboration between LKAB, SSAB and Vattenfall, mining, steel and energy companies respectively – is pioneering the world’s first fossil-free sponge iron by using fossil-free hydrogen to reduce iron ore instead of coal and coke. But scaling up will be wholly dependent on Sweden’s ability to ramp up generation from wind sources, he cautions. “To meet demand, we’re going to need to increase our renewable electricity production by up to 100%. It’s a huge ask for which we don’t yet have the answers.”

Safety solutions

Another question that will need to be addressed is that of safety. Hydrogen is highly flammable, so its storage and long-distance transportation present considerable risks which must be managed, particularly if a sustainable export market is to develop. This is a key part of many countries’ strategies: Chile hopes to capitalize on the demand for green hydrogen derivatives, targeting countries that lack the same renewables capacity, and has already signed a bilateral agreement with Germany for the creation of a green hydrogen supply chain. Canada too is hoping that hydrogen-based exports will replace declining trade in fossil fuels. 

Here, at least, there is a more readily available solution in the form of ammonia (NH3), a stable if malodourous chemical already produced at scale from fossil fuels and widely exported in liquid form for use in farming and industry. Clean ammonia – made from either green or blue hydrogen – would be one way of capturing, storing and transporting the gas so that it could be combusted in emission-free fuel cells and turbines remotely and on demand, and represents another target for investment. 

Yara, one of the world’s largest producers of ammonia, announced the first conversion of an existing ammonia facility earlier this year, with the electrification of its flagship chemical plant in Porsgrunn in Norway. By adapting it to run on renewable energy and eliminate the use of natural gas, it wants to produce ammonia and hydrogen in the greenest way possible to cut up to 800,000 tonnes of CO2 a year, equivalent to the emissions from 300,000 cars. The company has also signed a deal with Japan’s largest power generation company, JERA, to develop a supply chain for green and blue ammonia there. 

This diversity of approaches and solutions will be the reality of any future switch, believes Angela Wilkinson, secretary general of the World Energy Council, a UN-accredited body that has been tracking hydrogen-related developments for over a decade. There is no single pathway, she says. “The global policy rhetoric on green-only hydrogen contrasts with this regional diversity and the different energy bridges needed by societies to enable, sustain or increase the pace of their energy transition. Multiple energy transitions are underway, and there is increasing diversity across regions, resources, technologies, needs and skills.” 

Many organizations will have a role to play in bringing about a new hydrogen economy, from regional and national governments and international bodies to oil and gas giants, and disruptive start-ups to major investors and entrepreneurs. Wilkinson has noticed an increasing number of established players and unconventional players entering the field, and intensifying competition to reap the rewards. “Oil and gas companies are using capital leverage to pivot into clean hydrogen, CCUS (Carbon Capture, Utilization and Storage) etc at scale, at the same time as others from beyond the energy industry are impacting energy transition pathways via associated services,” she says. “One example is the new mobility paradigm and the competition between big oil and gas, big auto and big data/digital firms to secure a share of markets for mobility and customer facing services.” 

She also points to the broader impact that such a transition would have: “The full story of hydrogen is bigger than energy and climate. Whether hydrogen is an energy gamechanger will depend as much on developments in quantum computing as chemicals, and designer molecules and synthetic non-toxic materials will also reshape energy needs and uses. That’s why it’s important to look beyond the usual supply-centric perspective of clean hydrogen developments and anticipate new developments in demand.”

Given the scale of the potential opportunities, it’s not surprising that the developing hydrogen market is attracting such a broad range of entrants. And that’s surely a good thing because – given the scale of the challenge – the transition to net zero will need to be as multifaceted, inclusive and comprehensive as possible.