Why Do Almost All Industrial Powers Bet on Green Hydrogen?

By August 17, 2023 6   min read  (1006 words)

August 17, 2023 |

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Hydrogen, or rather, green hydrogen. While for some, it’s all smoke, for others, it’s the panacea for all our emissions problems. The truth probably lies between those two premises, but it’s undeniable that the world’s major industrial powers are fostering its development.

From China to Europe, passing through Japan, everyone has enormous investment plans to promote its use. Why is hydrogen seen as one of the most promising solutions for decarbonizing our economies?

The issue of decarbonization tends to be viewed through the lens of automotive and transportation in general. And fundamentally, that’s normal. Transportation is responsible for about a quarter of the EU’s total CO₂ emissions (2019 data), of which 71.7% come from road transport, according to a report from the European Environment Agency. In other words, it’s one of the main contributors to CO₂ emissions. But it’s not the only one.

Using hydrogen for road transportation is a potential solution, whether in electric cars with fuel cells, buses, or trucks. However, that’s not the main reason why all industrial powers are looking at hydrogen with hope. There are other reasons, which we have right in front of our eyes every day, such as the chemical industry, steel, or cement.

According to a report from the International Energy Agency (IEA), commissioned by Japan (one of the biggest proponents of hydrogen), this element provides pathways to decarbonize a range of large CO₂-emitting sectors, such as long-distance transportation, chemicals, and steelmaking, where significantly reducing emissions has proven challenging.

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At the same time, these are three key sectors of any economy, as they impact almost the entire spectrum of wealth creation in a country. Even a country without a strong chemical or steel industry depends on these sectors for the proper functioning of other sectors it does possess.

The chemical sector is essential for nearly every manufactured product, from textiles to aviation. Various sectors, including construction and automotive, depend on the steel industry, with the latter being especially relevant in Spain. Simultaneously, it is very challenging for these sectors to avoid emitting carbon.

Taking the example of the steel industry, its contribution to the global CO₂ emissions is more than significant. According to research published by Carbon Brief, the steel industry is responsible for 11% of the world’s carbon dioxide (CO₂) emissions. In fact, the report states that only 553 conventional steel plants worldwide account for 9% of all carbon dioxide emissions. In Europe, the steel industry is responsible for 7% of the continent’s emissions.

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All of this is due to the large quantities of fossil fuels, particularly coke coal, that are used to produce steel, for example.

Furthermore, the International Energy Agency forecasts a one-third increase in global steel production by 2050. Hence, decarbonizing steel is as crucial as doing so with transportation. The challenge for the steel industry has been to find a substitute for carbon in its production.

We’re not just talking about a source of energy to power blast furnaces, as it can be done using electricity with an energy mix where renewables play a significant role, but rather about the actual creation of steel.

The push for hydrogen will come from heavy industry rather than transportation

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The best example of why hydrogen appears to be the only possible pathway for its decarbonization is provided by carbon steel, the most common and essentially used in construction.

Steel is obtained by mixing iron ore with coke (a type of coal), and the mixture is heated to temperatures around 1,600°C. In this way, iron separates from the other components that make it up, and steel is obtained, which is much stronger than plain iron.

The production of iron ore in the form of pellets and the production of coke generate enormous amounts of CO₂. To obtain coke, for instance, bituminous coal is heated to high temperatures, ranging from 500 to 1,100°C.

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In that distillation process, a fuel composed of 90 to 95% carbon is obtained. The vast majority of this carbon will be released back into the air in the form of carbon dioxide or CO₂ once it is used as fuel for steel manufacturing.

And it is in this manufacturing process that hydrogen comes into play. Instead of mixing iron with coke to remove oxygen, renewable-origin hydrogen is added, thus obtaining the desired steel (with water as a byproduct). This is what is known as green steel.

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Traditional steel manufacturing process compared to the green steel process used at the Swedish HYBRIT plant (Source: HYBRIT)

As of today, almost all proposals for decarbonizing the steel industry focus on the use of green hydrogen, both in conditioning iron ore and in the actual production of metals, whether it’s steel or aluminum.

In other words, if the steel industry is to be decarbonized, it has no choice but to use green hydrogen. It doesn’t really have significant alternatives as of today, unlike the transportation sector, which can also rely on electric vehicles, whether they are battery-powered or fuel cell-powered.

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The cost of green hydrogen is currently exorbitant as its production is negligible. Several projects have already been initiated to meet the future demand for green hydrogen worldwide, from Namibia to Spain.

However, the true economy of scale that will dramatically reduce its price will come when heavy industries such as steel, cement, or chemical industries adopt green hydrogen. In the steel sector alone, it is projected that 120 million tons of green hydrogen will be allocated for these purposes annually by 2050.

The industries that currently use non-renewable hydrogen, such as fertilizer production, are also the ones that will demand the most green hydrogen. It is estimated that around 50 million tons per year will be needed by 2050.

And most industrial powers believe that this will be the case because these sectors of the industry will have no other option but to embrace green hydrogen for the simple reason that they currently lack alternatives, unlike the automobile sector.





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