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‘Indiscriminate use of hydrogen’ could slow energy transition: Report

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A hydrogen bus photographed in Poland. Hydrogen has a various range of applications and might be deployed in a big selection of industries.

Dominika Zarzycka | Nurphoto | Getty Images

Hydrogen use by the G-7 could jump by 4 to seven times by the center of this century in comparison with 2020 in an effort to “satisfy the needs of a net-zero emissions system,” based on a recent report from the International Renewable Energy Agency.

In a foreword to the report, IRENA Director-General Francesco La Camera said it had “develop into clear that hydrogen must play a key role within the energy transition if the world is to fulfill the 1.5 °C goal of the Paris Agreement.”

Despite this assertion, IRENA’s evaluation — which was published on Wednesday, in the course of the COP27 climate change summit in Egypt — paints a fancy overall picture that can require a fragile balancing act going forward.

Amongst other things, it noted that “despite hydrogen’s great potential, it should be kept in mind that its production, transport and conversion require energy, in addition to significant investment.”

“Indiscriminate use of hydrogen could subsequently decelerate the energy transition,” it added. “This calls for priority setting in policy making.”

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The primary of those priorities, IRENA said, related to the decarbonization of “existing hydrogen applications.” The second centered around using hydrogen in “hard-to-abate applications” like aviation, steel, shipping and chemicals.

The energy transition can broadly be seen as a shift away from fossil fuels to a system dominated by renewables. Provided that it relies on a large number of things – from technology and finance to international cooperation – how the transition pans out stays to be seen.

A spokesperson for Hydrogen Europe, an industry association, told CNBC that IRENA was “correct that the deployment of large-scale infrastructure and energy production require large-scale investments, and it’s true that it requires energy to provide, store and transport hydrogen.”

The spokesperson said Hydrogen Europe agreed “that any development of hydrogen-related projects ought to be done responsibly and that certain use applications ought to be prioritised over others.”

“On how one can prioritise, we consider this ought to be done as much as possible through market instruments that properly value the CO2 emission savings and other features (like security of supply), so that customers could make informed decisions,” they added.

A “top-down dogmatic restriction of certain sectors,” resembling hydrogen for heating, ought to be avoided, they said.

Hopes for hydrogen

Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a various range of applications and might be deployed in a big selection of industries.

It will possibly be produced in a lot of ways. One method includes electrolysis, with an electrical current splitting water into oxygen and hydrogen.

If the electricity utilized in this process comes from a renewable source resembling wind or solar then some call it “green” or “renewable” hydrogen. Today, the overwhelming majority of hydrogen generation is predicated on fossil fuels.

In a press release published alongside its report, IRENA said the G-7’s goal of net-zero emissions by the center of this century would “require a big deployment of green hydrogen.”

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Over the past few years, major economies and businesses have looked to tap into the emerging green hydrogen sector in a bid to decarbonize the best way sectors integral to modern life operate.

During a roundtable discussion at COP27 last week, German Chancellor Olaf Scholz described green hydrogen as “probably the most vital technologies for a climate-neutral world.”

“Green hydrogen is the important thing to decarbonizing our economies, especially for hard-to-electrify sectors resembling steel production, the chemical industry, heavy shipping and aviation,” Scholz added, before acknowledging that a big amount of labor was needed for the sector to mature.

“In fact, green hydrogen remains to be an infant industry, its production is currently too cost-intensive in comparison with fossil fuels,” he said.

“There’s also a ‘chicken and egg’ dilemma of supply and demand where market actors block one another, waiting for the opposite to maneuver.”

Also appearing on the panel was Christian Bruch, CEO of Siemens Energy. “Hydrogen will probably be indispensable for the decarbonization of … industry,” he said.

“The query is, for us now, how will we get there in a world which remains to be driven, when it comes to business, by hydrocarbons,” he added. “So it requires an additional effort to make green hydrogen projects … work.”

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