Energy Efficiency

Clean hydrogen can cut carbon emissions 34%: Study

Can be achieved at manageable costs using wind and power energy, according to the study

By Shagun
Published: Tuesday 31 March 2020

Widespread adoption of clean hydrogen can cut global greenhouse gas emissions by up to 34 per cent in fossil fuel-dependent sectors by 2050 — and at a manageable cost — according to a new study by research firm BloombergNEF (BNEF).

However, the same is possible only if adequate policies are implemented to scale up technology and drive down costs — and if $150 billion of subsidies are rolled out over the next decade.

The findings were published in a report titled ‘Hydrogen Economy Outlook’.

The report suggested that renewable hydrogen could be produced for $0.8 to 1.6/kg in most parts of the world before 2050.

“This is equivalent to gas priced at $6-12/MMBtu, making it competitive with current natural gas prices in Brazil, China, India, Germany and Scandinavia on an energy-equivalent basis. If we include the cost of storage and pipeline infrastructure, the delivered cost of renewable hydrogen in China, India and Western Europe could fall to around $2/kg ($15/MMBtu) in 2030 and $1/kg ($7.4/MMBtu) in 2050,” the report said.

“Hydrogen has the potential to power a clean economy. In the years ahead, it will be possible to produce it at low cost using wind and solar power, to store it underground for months, and then pipe it on demand to power everything from ships to steel mills,” Kobad Bhavnagri, head of industrial decarbonisation for BNEF and lead author of the report, said,

The study found that the carbon price of $50/tCO2 would be enough to switch from coal to clean hydrogen in steel-making industry by 2050; $60/tCO2 to use hydrogen for heat in cement production; $78/tCO2 for making chemicals such as ammonia; and $145/tCO2 to power ships with clean fuel — if hydrogen costs reach $1/kg.

“Heavy trucks could also be cheaper to run on hydrogen than diesel by 2031,” it said.

Renewable hydrogen can be made by splitting water into hydrogen and oxygen using electricity generated by wind or solar power.

“The cost of the electrolyser technology to do this has fallen by 40 per cent in the last five years, and can continue to slide if deployment increases,” the report said.

It added that clean hydrogen can also be made using fossil fuels if carbon is captured and stored, but that is likely to be more expensive.

However, right now, a hydrogen economy is still uncertain — there are not enough policies to support investment and scale up the industry, according to the study.

“For hydrogen to gain use, policy is critical. The clean hydrogen industry is small and costs are high. There is a big potential for costs to fall, but the use of hydrogen needs to be scaled up and a network of supply infrastructure created,” Bhavnagri said.

“This needs policy coordination across government, frameworks for private investment and roll-out of around $150 billion of subsidies over the next decade,” he added.

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