Can hydrogen help the world reach net zero?
The global push for net zero carbon emissions is one of humanity's greatest challenges. In this film, the FT's Simon Mundy explores how hydrogen - the lightest, most abundant element in the universe - could play a crucial role. From southern Spain to Swedish Lapland, we meet those at the forefront of this fast-growing space - all seeking a share of the billions to be made in the emerging hydrogen economy
Presented by Simon Mundy. Produced, filmed and directed by Petros Gioumpasis
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Hydrogen is this magic molecule which is the lightest, the most energetic and the most abundant in the universe. When you master hydrogen in its pure component you're basically having the best energy you can have.
In the global shift to cleaner forms of energy ever more attention is being drawn to the awesome potential of the smallest, simplest element there is, hydrogen. In this film we'll look at the gathering race to build a massive new hydrogen economy, which could transform sectors from heavy industry to mass transportation, starting here in the Southern Spanish province of Ciudad Real.
These solar panels are being used to power the biggest green hydrogen plant in Europe. It's been built by Iberdrola, the continent's biggest utility company. The solar electricity powers a process called electrolysis. This uses electricity to split water into hydrogen and oxygen. The hydrogen goes directly to an adjacent factory to make ammonia, which is used today mainly in fertiliser and is widely seen as a potentially crucial zero carbon fuel.
Our molecule of water is hydrogen and oxygen. With the energy, the green energy, we break the molecule. So we get oxygen in one side and hydrogen in the other side. And we take the energy from the photovoltaic plant, which is actually four or five kilometres away from here in Puertollano. We take it. And we bring it to this building where we have the electrolysis.
We have 16 cells of electrolysis. There we break the water molecules. We get this hydrogen and these oxygen. And what we do is the oxygen can be used for other industrial uses. And the hydrogen is delivered to the customer. We can only produce it in the day. So this is why we have the tanks. We store a part of the production. So during the night we can use that hydrogen that we have stored and deliver it to the customer as well.
The project near the town of Puertollano is just the start of an ambitious hydrogen drive from Iberdrola, which plans to invest three billion euros in this space by 2030.
Before 2030 we have different projects in different geographies in the Iberian Peninsula, in US, in Australia, Brazil. And we will see how these projects are progressing. And it's not only about the hydrogen or ammonia or methanol manufacturing facility. It is also about the electricity that you need to generate from renewables to fuel all these factories. And this is also an interesting investment from our side.
Hydrogen is already in widespread use, largely in the fertiliser and petrochemical industries. Currently, nearly all of it is made by breaking apart hydrocarbon fossil fuels, giving hydrogen and carbon dioxide. That gives off about a billion tonnes of carbon dioxide each year, 2 per cent of global greenhouse gas emissions. For the moment, the green hydrogen process is more expensive. But Iberdrola, with a huge and growing collection of solar and wind farms, hopes that will change pretty quickly as the cost of renewable energy and electrolysers continues to fall, while the price of fossil fuels goes up with tighter carbon pricing systems.
What we want is that the final customer, the guy that is going to buy the bread in the supermarket, doesn't have to pay more in order to buy a product which has not polluted while it has been produced. So fertilisers, of course, are a key element in order to decarbonise the whole chain. If we can take the money, lower the price of the green hydrogen, our customer will be able to sell more green fertilisers. And that money will flow through the chain until the final customer. That's the goal. That's the idea. And this is something we are counting on in order to make that project fully viable.
Some energy experts have voiced concern that enthusiasm for green hydrogen could go too far. Recent studies have shown that if man-made hydrogen leaks into the atmosphere it could interact with greenhouse gases to worsen global warming. Meanwhile, the world is already struggling to build enough renewable power to move its electricity generation away from fossil fuels. The more electricity that's used to make green hydrogen, they worry, the longer it will take to decarbonise the grid.
We can see that renewable is expanding very much. Everybody can see that. This will also bring economies of scale, keep going down through the learning curve. My understanding, it is that the final solution will be green hydrogen.
But green is just one colour in the hydrogen rainbow. Pink hydrogen also involves electrolysis, with the electricity generated by nuclear plants instead of renewables. Grey hydrogen is produced by splitting apart methane gas to produce hydrogen and carbon dioxide. Black and brown hydrogen are produced in a similar way, using black or brown coal. The blue hydrogen process also breaks up fossil fuels.
But in this case the carbon dioxide is captured and stored, or used for industrial purposes. Advocates say this is the most promising, cost-effective solution in the near term. But critics argue that it comes with a high risk of greenhouse gas leakage and that it's being aggressively promoted by the fossil fuel industry. And then there's emerald hydrogen, a concept being pursued by one ambitious start-up near Hull in the northeast of England.
HiiROC has patented a system to produce hydrogen from hydrocarbons like methane using a plasma torch. The process happens in the absence of oxygen, meaning that it produces solid carbon instead of carbon dioxide.
One of the funniest things we talk to people about is your carbon footprint, is your CO2, your carbon dioxide footprint. Carbon dioxide is a greenhouse gas. Solid carbon - ironically, solid carbon is the lead in your pencil. It's inert. It won't turn into carbon dioxide in thousands of years. So it's not a problem. In fact, it's quite a useful byproduct. It gets used in the tyre industry to make tyres rubber, and usable. It gets used for coatings, toner and so forth. And then we're increasingly using it in new cases as a building material in cement or with steel, in the production of steel and other use cases.
HiiROC says its process can offer a useful alternative to green hydrogen. It can be deployed on a small scale and uses less energy per kilogramme of hydrogen produced. And it offers a potential means of using the world's reserves of fossil gas without dangerous emissions of carbon dioxide.
Hydrocarbons get a lot of negative press because when they're burnt they produce CO2. But they're great fuels. They're really, really energy-rich. And therefore, they're a great source of hydrogen for us. We've got buyers. We've got too many buyers. And we're having to limit the number of projects we can do this year. The investment behind that is huge and fantastic because people see the potential of our technology.
Rolling out a full-scale hydrogen economy will require vast amounts of capital. And for some investment funds that looks like one of the biggest opportunities in the world today. Pierre-Etienne Franc, a former industrial gases executive, is the CEO of HY24, a fund dedicated to hydrogen investments. Launched in 2022, the fund has raised two billion euros from a range of major industrial and financial companies, including Airbus and Allianz.
When you master hydrogen in its pure component, you're basically having the best energy you can have. To be very clear, if you move into the energy of the future world, it's clean energy. And it's a mix of electrons and hydrogen. Whatever you do in the future you will need a mix of the two. The only question is, does hydrogen represent 10, 15, or 20 per cent of the final energy demand? You have no choice. It's going to represent a big part of it.
As a fund we are involved from the upstream to the downstream. So we are involved into the whole value chain of hydrogen. Upstream, you're dealing with very classic industries which are already using hydrogen and just need to shift from grey to green. So if you find the right schemes with the right policy support you can deliver green hydrogen at a price which is similar to grey. And then you will get a solid return steady.
Those projects are the first one to start. And you've got the second type of projects which are more risky. They are far bigger. They are more exploratory. But if they move forward they're going to be extremely interesting in terms of performance. Is one trying to develop this power to its topic, which is, you do massive renewable capture. You do hydrogen. You transform it to ammonia.
And then you ship it to the countries that need that source of power which is clean. And then the third one, which are the ones that are linked to mobility, where you basically try to deploy the networks that are going to enable captive fleets and massive heavy duty fleets of trucks, of buses, of trains. So we are looking at those three types of projects with different blended risk involved. But all of them are very promising.
So far, all of HY24's investments have been in Europe, which has been the busiest region for hydrogen projects so far. But Pierre-Etienne warns that European policymakers will need to up their game if the continent is to remain at the forefront of this fast-moving industry.
Europe is a little bit too regulated in the way it processes its knowledge. But the skills are there. The issue is to have a real friendly business market system. And this is where Europe still has a little bit of a way to go. It's a fundamental moment that we're living now. But Europe needs to tackle it very seriously because if not we will lose many energy-intensive industries. And that's going to be a drama.
There you go, it's now law.
Competition between governments over hydrogen investment has reached a fever pitch. The EU, which had long set the pace for green policy, is now scrambling to respond to a game-changing move by the US, where Joe Biden's $369bn Inflation Reduction Act has offered lavish subsidies for clean hydrogen production.
First of all, I think it's a positive sign that everyone wants to become carbon neutral. Climate change is a global challenge for all of us. So it's good that the US is stepping up with the IRA, Japan and others. And hydrogen is a key example for that low carbon, green hydrogen. So in that sense I think it's positive that we are all working on it. And if the US will step up it's clearly also the EU will step up.
I think 10 years ago, when I joined the commission in the energy department, hydrogen was a niche. It was something for researchers coming together. It was always there. But it wasn't top on the agenda. I think that has changed. And I think it's a good momentum. I think financial support is important. But mostly it should come from private sector. So there is a key role for the private sector to provide enough funding and go ahead.
And we see a lot is happening there in the hydrogen area. Then in order to accompany and cover the costs of the first ones, the first movers who have to pay a high price, we have set up a hydrogen bank or hydrogen facility which is financed by our Innovation Fund with $300bn. And this will be a starting point this year to really do more.
Vladimir Putin's invasion of Ukraine has highlighted the risks of Europe's reliance on Russian natural gas, giving new impetus to the hydrogen agenda.
We had a hydrogen strategy already in 2020. But with the invasion of Russia in Ukraine we really meet very ambitious targets for hydrogen as well, not only to decarbonise, but also to become more independent, for example, from imports from Russian gas or fossil fuels.
To see one of the most disruptive hydrogen investments in the EU we headed to one of the continent's northernmost cities, Lulea in Swedish Lapland.
Steel production accounts for about 7 per cent of global greenhouse gas emissions. Today, it relies heavily upon blast furnaces, which heat iron ore with coke, a carbon-rich derivative of coal. The carbon in the coke binds with the oxygen in the iron ore, leaving iron, together with large volumes of carbon dioxide.
This transformation that we do here at SSAB, when transforming both Lulea site and... we are actually reducing the Swedish carbon dioxide footprint with 10 per cent.
Outside Lulea, SSAB, Sweden's biggest steel company and also its biggest carbon emitter, has built a first of its kind pilot plant that uses green hydrogen in place of coal.
We use the same iron ore. But instead of using carbon to reduce the oxygen, we use hydrogen. So when you take this iron ore pellet, we put it down in this process. We add the hydrogen gas. And then the hydrogen gas reduces the oxygen from the pellet. And then the rest product here is water. And then we get a sponge iron pellet. This is actually almost 100 per cent iron. The only different thing is that in this process it comes out as a liquid.
And in the hybrid it's still a coal product. So then we have to take this product and then melt it down. I'm actually super proud of SSAB for being in the forefront in this transformation. People were shaking their head, saying that what are you doing? This is not the way you do it. But now we have produced a fossil-free iron ore, sponge iron. We have produced the steel from it. And our partners has produced vehicles from it. So we have actually been able to prove that this works.
SSAB's chief technical officer, Martin Pei, says that this process is now at the centre of the company's long-term strategy. It has already made its first shipments of green steel, using iron treated in the Lulea pilot plant to customers, including the automotive company, Volvo. And it plans to start full-scale industrial production in 2026.
In the beginning there is really a concern if there will be such products on the market at all. Now, when we have shown that this works and a lot of other companies are starting to plan for such transition, we get a quite clear signal that more and more customers believe also that this is the right way to go. For us as a company we realise that we cannot just continue without significant technical breakthrough. Otherwise, we would be irrelevant in the long run.
Beyond heavy industry, one of the biggest potential target areas for hydrogen is transportation. For green passenger vehicles, electric batteries have become the dominant technology, beating out hydrogen fuel cell cars. It's cheaper to recharge an electric car than to fill up an equivalent hydrogen vehicle. And it's easier to roll out electric charging stations than to create the complex hydrogen fuel network needed to support large numbers of fuel cell cars.
But experts see more potential for other areas of transportation, where the heavy weight of batteries and the time they take to charge can create problems. Hydrogen could offer a compelling option for trucks, buses, trains, and ships. And it might just offer a means of cleaning up the world's most controversial form of transport.
Of all the challenges in the push for a greener world economy, cleaning up aviation has long been seen as one of the most fearsomely difficult. But here in the English Cotswolds one start-up is trying to prove that hydrogen can offer a solution. ZeroAvia has developed a system to power planes using hydrogen fuel cells. Fuel cells effectively perform electrolysis in reverse, turning hydrogen and oxygen into water together with electricity that powers a motor. The company was founded in 2017 by Val Miftakhov, a former Google executive, and has received investment from Amazon and Bill Gates's Breakthrough Energy Ventures.
And when we started the company we actually looked at all of those areas. So we looked at batteries. We looked at hybrids. We looked at sustainable aviation fuels, bio and synthetic, hydrogen combustion, even. And it was pretty clear that the combination of hydrogen on board the aircraft but going to electric motors through fuel cells is the best possible option. And we didn't see anybody doing this. So that's how I started the company to do it.
Many airlines are currently focused on moving towards so-called sustainable aviation fuel, which is chemically the same as conventional jet fuel but produced using plant matter or carbon dioxide captured from the air. Val argues that this approach still comes with climate impacts linked with the burning of hydrocarbons in the air, which only fuel cell-powered flights can avoid.
So you don't have nitrogen oxides. You don't have high temperature water vapour. You don't have particulate emissions. All of those things actually contributes to two-thirds of the aviation climate impact. So if you just do the, let's say, bio-fuels or synthetic aviation fuels, SAF, you're solving only a third of the problem at best. And you're not solving two-thirds of the problem. So in order to solve two-thirds of the problem or an entire problem, you need to get away from combustion. And hydrogen electric is the only way to do it.
Hydrogen flight is hardly new. Nearly a century ago hydrogen-powered airships were crossing the Atlantic on a regular basis. But that era came to a fiery end with the Hindenburg disaster of 1937. ZeroAvia says there's no danger of a similar tragedy involving its engines.
It's been testing its system on small planes in the Cotswolds, where the company has set up a large operation thanks to financial incentives from the UK government. Since January 2023, ZeroAvia has been running test flights of a 20-seater sized plane with one of its engines powered by hydrogen. Despite one earlier crash landing in 2021, in which nobody was harmed, test pilot Jon Killerby says the company is on track to meet all the regulatory requirements needed to get its hydrogen-fueled engines on the commercial market in the next few years.
We're designing how we test the systems to demonstrate that they're safe. We won't be able to use this technology in a commercial application unless we demonstrate that it's safe. We work to the same requirements of safety that there are for conventional, known-about power train systems. And we as an organisation are working really closely with the regulators to make sure that as we progress, they learn. And we progress together.
ZeroAvia is in a race against US rival Universal Hydrogen, which in March 2023 ran a 15-minute test flight of a 40-seater sized plane with one engine powered by a hydrogen fuel cell. Val says ZeroAvia expects to get its engine for 20-seater planes on the market in 2025, followed by 70-seaters in 2027 and 100-seaters in 2029.
This is the beginning of guilt-free flying, if you will. So that's when you say, hey, I'm flying on sunshine or wind or any... pick your renewable power of choice, different geographies, different types of renewable power. But you can fly on electricity. You just need to use the right medium to pack that electricity on board the aircraft. And hydrogen is the best way to do it.
So what will the hydrogen economy of the future look like? And how quickly can we get there?
Hydrogen has the potential of decarbonising industry and transport. And that's our common goal. It's good for climate change. It's good for competitiveness. But we also shouldn't over-estimate the role of hydrogen. It has a key role in certain sectors. But there's a lot more in the electrification which we can do by solar, wind, bioenergy for those, and so on.
If you can electrify, then do it because it's the most efficient and competitive way to do it. But sometimes, you can't. Then we have another solution. This is hydrogen. This is another route. It's a more expensive route, not only in terms of economics, in terms of efficiency. The use of energy is much poorer. But it's the solution that we have in our hands.
You will come in and you will have majority of operations on the non-combustion fuel, hydrogen-electric approach, where you won't have smell of jet fuel. The noise levels will be much lower. There will be no pollution around the airports. And the fuel will be produced on-site from renewable electricity.
I think the hydrogen economy will be 25 per cent of the world's energy supply will come from hydrogen. So if you look out 2050 fusion hopefully by then will be sorted. We've got hydrogen. They're going to be massive parts of what we do. And we want to be a big part of that. As a business, our vision, our dream, we want to help deliver net zero as a planet. So we want to do our small part of that. And hydrogen is a great place to be.
If you believe in the energy transition this is the wave of the decade. And the only real risk, which is not a small one, is that energy transition doesn't come because for a reason some people stop it or don't want to push it with the regulatory frameworks or the policy support that are needed to make it happen.
Hydrogen may not be the answer for most of the challenges that we face in decarbonising the world economy. But it's increasingly looking like an exciting potential solution for many of them. And the race to take advantage of those opportunities is already well under way.
This was the second film in a three-part series. Please make sure to, comment, and share.