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Hydrogen poised for lead role in push for Paris goals

Hydrogen key to tackling hard-to-abate sectors, but reaching Paris goals will require a wider arsenal of fuels and technologies, roundtable panellists say

Hydrogen will play a leading role in the energy transition, but other clean fuels, electrification and a sustained effort on energy efficiency will also be crucial to meeting the goals set out in the Paris Agreement on climate change, according to speakers at a Transition Economist alternative fuels roundtable, held in association with PwC

Hydrogen will be essential to curbing emissions in hard-to-abate sectors such as steel and chemicals, speakers say.

However, a serious attempt to reach the goals of the Paris Agreement will require deployment of a wider range of alternative fuels and technologies, some of which have yet to emerge, according to Juergen Peterseim, senior manager at PwC, citing recent analysis by his company. 

“The next big challenge with hydrogen is how you connect production with customers” Williamson, BP

“At the moment there is a lot of discussion about hydrogen, and it feels like hydrogen could be a silver bullet for everything. But at the end of the day, you have to really look at how it is going to be one important part of the puzzle,” says Peterseim. “You have to look at efficiency first, minimising overall energy demand, look at electrification and then you look at hydrogen.”

Peterseim sees the fuel mix initially developing around locally produced hydrogen, with biofuels applications also growing but constrained by sustainability requirements.

“Then we will see hydrogen in terms of export initially in the space of ammonia and methanol. The emergence of hydrogen infrastructure will then start to see greater use of hydrogen, as well as ammonia and other derivatives, and e-fuels for aviation,” he says.

By 2050, up to 20pc of world energy could come from hydrogen or be hydrogen-related, according to Matt Williamson, VP for blue hydrogen at BP.

“That is an enormous change. And so what I do know is that it is not a journey to be carried out alone—collaboration and partnerships will be key,” he says. “Regulations will attract investors and create projects that are financeable. But all of this needs to be done together. No one company can do it. It is a massive collaboration across all sectors and all types of participants in those sectors.”

Oil and gas companies are well placed to drive this scaling up, given their experience of handling the movement of molecules around the world and their strong relationships with industrial customers.

They also have strong records of innovation, which they can draw on to develop hydrogen-based and other technologies to deploy in the energy transition.

But oil and gas companies will also need to collaborate with others on growing new markets, such as in the transport sector, and developing fuelling networks that will need to start off at a small scale, according to Chris Johnson, CEO of private equity fund HyCap and a former member of Shell’s new energies leadership team.

“There are things that oil and gas companies are not so good at,” he says.

Johnson cites an IEA projection of 850GW of equivalent hydrogen needed in 2030 as a measure of the scale of the challenge for the hydrogen sector on the supply side.

Moving molecules

One of the main challenges for the roll-out of hydrogen is transmission, and this will need to be a focus of emerging technologies.

“The next big challenge with hydrogen is how do you connect production with customers? Hydrogen does not really like being transported. It is quite a high cost of transport,” says BP’s Williamson.

“That is where initiatives like the European hydrogen backbone are such a great thing. Essentially, legacy gas transporters are getting together to convert networks to hydrogen, and that will allow us to connect up supply with customers and reach as many customers as possible, which I think is important to get to the overall net-zero objectives of companies like BP and the world.”

PwC’s Peterseim also highlights the need for progress on technologies to move hydrogen. 

“These could be pipelines, but we will also see technology in terms of a liquid hydrogen transport, where we see a pilot project between Australia and Japan already. But these technologies need to scale and they are basically a must to achieve the Paris Agreement,” he says.

Demand

Even with the transmission infrastructure in place, there will still be challenges in terms of enabling demand, initially in industrial sectors through to 2030 and subsequently in transport, Williamson notes.

850GW – Hydrogen production capacity needed by 2030

The future deployment of alternative fuels will be shaped by end-users as they seek out the most cost-competitive, efficient and easy-to-use solutions, speakers say, with those applications not requiring big changes in industrial processes expected to lead the way. 

Applications will vary by sector but also within sectors, or at a subsector level.  In the transport sector, the relative competitiveness of biofuels, hydrogen and batteries will be dictated by factors such as biofuel feedstock availability, the size and type of vehicle to be fuelled, and whether a vehicle is in continuous use.

For example, the weight of the batteries is a factor in why hydrogen may move ahead as a fuel source for long-haul and heavy goods transportation, says Helena Anderson, co-founder and COO Ikigai Capital.

The Transition Economist roundtable, ‘The role of alternative fuels in the transition to net-zero and the pathways to commercial viability’, held in association with PwC, is now available on demand.

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