Last year, COP26 put clean hydrogen at the top of the global decarbonisation agenda, as global availability of affordable, renewable and low carbon hydrogen by 2030 became one of its five pillars.
This year, hydrogen’s role in achieving net zero was further solidified. The scale up of low-emission hydrogen production was one of five sector-specific priority actions named under the summit’s Breakthrough Agenda.
Priority actions included the development of common definitions for low-emission and near-zero emission hydrogen to ensure credibility and transparency and help direct billions of pounds in hydrogen investment, and to ramp up the deployment of essential infrastructure projects including at least 100 hydrogen valleys. A hydrogen valley is a city, a region, an island or an industrial cluster – where several hydrogen applications are combined together into an integrated hydrogen ecosystem that consumes a significant amount of hydrogen, improving the economics behind the project.
The biggest two announcements came from the World Bank and the global shipping industry.
The World Bank announced the creation of the Hydrogen for Development Partnership (H4D), a new global initiative to boost the deployment of low-carbon hydrogen in developing countries. The multilateral lender aims to unlock significant investment from both public and private sources, foster capacity building and provide developing countries with access to concessional financing and technical assistance to scale up hydrogen projects.
The shipping industry took a major step forward as companies including Maersk, MAN ES and the Getting to Zero Coalition made some strong pledges around the adoption of green hydrogen and hydrogen-derived fuels to achieve their decarbonisation goals.
Signatories to the agreement committed to the achievement of commercially viable, zero-emission, deep-sea vessels from 2030 with the intention of using exclusively zero-emission-powered ocean-freight services by 2040; the scaling-up of green hydrogen production to 5.5 million tons per year by 2030; and the full decarbonisation of the shipping sector by 2050 at the latest.
Existing commitments made by Green Hydrogen Catapult, which includes Acwa, CWP, FFI, Iberdrola, Orsted and Snam, would be able to supply 90% of the shipping sector’s green hydrogen demand by 2030, according to the statement.
“The true winner at COP27 is hydrogen, which saw widespread support as a potential replacement for gas in hard-to-decarbonize areas of the economy,” said Lauren Craft, editor of Energy Intelligence New Energy. “Gas continues to be viewed as a bridge fuel in the energy transition — but its role could be short-lived and less stable than was once believed.”
Many of the delegates at COP27 said time is running out for new gas assets to be fully used and monetized before 2050, the date set by most nations for net zero to be achieved, according to Craft. Hydrogen, on the other hand, earned nearly universal support, she said.
Deals in support of that statement include an $80 million loan to Egypt Green from the European Bank for Reconstruction and Development to build the country’s first green hydrogen facility. The financing will be used to construct a 100 MW electrolyser to be powered by renewable energy, delivering up to 15,000 tonnes of green hydrogen annually, which will be used to produce green ammonia to be sold in Egypt and internationally.
The agreement is a building block in the EU-Mediterranean Renewable Hydrogen Partnership, which aims to provide the infrastructure and financing frameworks to support the development of a renewable hydrogen industry and trade across the EU and Egypt, helping the EU reach its RePowerEU goal of reducing its reliance on Russian gas with 20 million tonnes of renewable hydrogen by 2030.
Kenya’s President announced a plan to produce 30 GW of green hydrogen production after signing a 500 billion Kenyan shilling ($4 billion) deal with the UK, which will provide KES2 billion of financing over the next three years, with the goal of unlocking KES12 billion of climate finance through CPF Financial Services and other private investors.
A sizeable order for electrolysers manufactured by Israeli company H2Pro from Moroccan renewable energy developer Gaia Energy was also announced at COP27.
Saudi Arabia also elaborated on its pitch to be one of the world’s largest suppliers of green and low carbon hydrogen, with a target of producing 4 million mt/year by 2030. Production standards would be configured to meet market requirements in both Europe and Asia-Pacific, the Saudi energy ministry’s head of hydrogen, Zeid al-Ghareeb, told delegates in Sharm El-Sheikh.
Green hydrogen produced by Saudi Arabia with alkaline electrolysers, including capex, was assessed at $3.20/kg this month, among the cheapest sources of hydrogen in the world, according to S&P Global Commodity Insights.
Saudi Arabia plans to produce 650 mt/d of renewable hydrogen powered by 4 GW of wind and solar at its Neom project in the northwest of the Kingdom, with first output expected in 2026. It is also developing a “world-scale” hydrogen plant at Jubail reforming natural gas with carbon capture technology, to produce 420 mt/d of hydrogen.
So, while COP27 disappointed many after failing to find agreement to phase down the use of fossil fuels, agreements accelerating the use of clean hydrogen provides more than a silver lining.
Fossil fuels cannot be phased out without a viable replacement and clean hydrogen is the only replacement. Industries from steel production to construction to transport and energy need hydrogen, which produces no carbon emissions when burned or used in a fuel cell, to decarbonise.
Thanks to the agreements announced in the past couple of weeks, a global hydrogen economy is getting ever closer.