Shipping Sunshine Series – Setting the Scene (Part 1)

Hydrogen is today enjoying unprecedented momentum. The world should not miss this unique chance to make hydrogen an important part of our clean and secure energy future. –Dr Fatih Birol, Executive Director of the International Energy Agency

The hydrogen rainbow – how it is produced

Hydrogen is the simplest and most abundant element in the universe. Hydrogen is an energy carrier, not a direct energy source. It can be used to store, move, and deliver energy produced from other sources. Despite its colourless nature, hydrogen has been given many colourful terms – from white to green to pink to black and brown, the ‘hydrogen rainbow’ identifies hydrogen by its source or production process.

White hydrogen is a naturally occurring geological hydrogen found in underground deposits and can be obtained through fracking, a process that cracks open rocks deep underground. Deposits found in Mali and Australia have triggered a global drilling race, but The World Economic Forum says that there are few viable ways of extracting this gas. Grey hydrogen is the most common form and is generated from natural gas, or methane, through a process called steam reforming. This process generates just a smaller amount of emissions than black or brown hydrogen, which uses black (bituminous) or brown (lignite) coal in the hydrogen-making process. Blue hydrogen – referred to as ‘carbon neutral’ – is produced in a similar way to grey hydrogen, but the CO2 is captured and then stored underground through industrial carbon capture and storage (CCS). Green hydrogen, or ‘clean hydrogen’, is produced by using clean energy from surplus renewable energy sources, such as solar or wind power, to split water into two hydrogen atoms and one oxygen atom through a process called electrolysis. Turquoise hydrogen – supposedly coming between blue and green – is created by a thermal process in which natural gas is broken down with the help of methane pyrolysis into hydrogen and solid carbon (instead of CO2 gas). As such, there is no requirement for CCS and the carbon can be used in other applications like tyre manufacturing or as soil improverYellow hydrogen refers to hydrogen production from a mixture of renewable energies and fossil fuels. Then there is pink hydrogen. Like green hydrogen, it is created through electrolysis of water but the latter is powered by nuclear energy rather than renewables.

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Image source: National Hydrogen Strategies (World Energy Council, September 2021)

The versatile uses of hydrogen

In 2021, the Energy Transition Commission released its report “Making the Hydrogen Economy Possible: Accelerating clean hydrogen in an electrified economy, outlining the role of clean hydrogen in achieving a highly electrified net-zero economy. With existing uses today in oil refining, ammonia production, methanol production and steel production, hydrogen use is highly likely to develop in steel, aviation, and power storage.

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Image source: Making the Hydrogen Economy Possible: Accelerating clean hydrogen in an electrified economy (ETC, April 2021)

Cost of hydrogen

Hydrogen is undoubtedly an important building block in achieving a sustainable energy system. Hydrogen is on an unstoppable trajectory, with global production set to more than double by 2030 following public and private sector commitments.

Right now, almost all hydrogen produced worldwide is grey. By 2050 green hydrogen production is likely to cost less in most locations and, in the long run, is the only truly ‘sustainable’ solution. However, blue hydrogen is today the most cost effective low-carbon hydrogen technology, and while concerns have been raised around inefficiencies in the production process causing CO2 to escape, it remains a ‘bridging technology’, particularly in countries lacking the resources to scale-up and/or where distance to trade partners makes imports from neighbouring regions prohibitive.

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Images source: Geopolitics of the Energy Transformation: The Hydrogen Factor (IRENA, January 2022)

FURTHER READING

Explainer: the many shades of hydrogen (Eco-Business, February 2022)

Green, blue, brown: the colours of hydrogen explained (CSIRO, May 2021)

Catalysing hydrogen investment (ARUP/GIIA, October 2021)

Hydrogen: Separating hype from reality (Baker Hughes, September 2021)

Hydrogen Insights A perspective on hydrogen investment, market development and cost competitiveness (Hydrogen Council/McKinsey & Company, February 2021)

Author: Nur Sidki Gomez is a Board Member and Head of International Policy at Professionals in International Trade (PIT). Nur brings 18+ years consultancy experience in foreign direct investment attraction, trade and developing whole-of-government strategies to support local emerging industries. A passionate advocate for sector-wide collaboration, Nur’s career in Australia has spanned from managing an agbiotech startup to leading and implementing the technology investment strategy for the Greater Brisbane region, as well as taking a deep dive into all things AI as part of the Queensland AI Hub and former Founding Director of the Australia AI Collective (AAIC). Having previously served as Investment Team Leader, Life Sciences and Agribusiness, for the Australian Trade and Investment Commission (Austrade) in Germany, Nur has most recently rejoined the agency as Senior Investment Advisor – Europe, Middle East and Africa, at its Austrade office in Brisbane, Queensland. Nur holds a double degree in business administration – a BBA in International Management from the Rotterdam Business School (Netherlands) and a BBA in European Business from the Centro Europeo Superior de Dirección y Administración de Empresas (Spain). A native Spanish and English speaker, Nur is fully fluent in German and is at ease working in French and Bulgarian.