Introduction

Driven by the urgent need to decarbonise the economy, industries,  governments, and other actors are looking for the best ways to reach carbon neutrality. Hydrogen has only started to reemerge in the last few years as a pivotal technology for the energy transition. Despite different scenario assessments disagree on how or in which industries hydrogen would be most helpful, it is clear that its adoption will revolutionise the world’s energy systems. To accommodate this transition, global hydrogen consumption should increase by to 15 times by 2050 (compared to 2020). Assuming that all hydrogen produced worldwide is green (i.e., derived from renewable energy sources), this implies that the amount of electrolyser capacity needed will increase from 8 900 GW to 26 000 GW by 2050—as opposed to the existing global capacity of less than 1 GW.

Just to allow this hydrogen production, the power infrastructure needs to be expanded by a comparable worldwide amount, primarily from wind and solar power. Expanding dispatchable low-carbon power generation capacities (like nuclear) could considerably reduce the need for electrolysers and intermittent power generation.

Most notably, the concept of green hydrogen has gained much attention in recent years as a promising solution for decarbonising industrial processes. Green H2 is produced through the electrolysis of water using renewable electricity, resulting in a clean, sustainable fuel with zero carbon emissions. This method contrasts with traditional hydrogen production methods, which often rely on fossil fuels and emit significant amounts of greenhouse gases (GHGs) during the production process.

Production of Green Hydrogen

The production of green hydrogen involves the use of electrolysis, a process where an electric current is passed through water to split it into hydrogen (H2) and oxygen (O2). This process is facilitated by the use of proton exchange membrane (PEM) electrolysis or other alternative technologies, which eliminates the need for additives such as salt, making it more environmentally friendly. The resulting hydrogen can be compressed and stored for later use, making it a versatile energy carrier that can be used in various applications.

Applications of Green Hydrogen

Green hydrogen has numerous applications across various industries, including:

1.   Industrial Processes:

  • Chemical Industry: Green hydrogen can be used as a feedstock to produce ammonia and fertilisers, replacing fossil fuels and reducing carbon emissions. It can also be used in the petrochemical industry for petroleum refining and in metallurgy to produce steel.
  • Steel Production: The use of green hydrogen as a reducing agent in steelmaking can significantly reduce carbon emissions, making it a crucial step towards decarbonising the steel industry, which currently accounts for a significant portion of global CO₂ emissions.
  • Oil Refining: Green hydrogen can be used to replace fossil fuels in oil refining processes, reducing emissions and improving the environmental footprint of these industries.

2.   Power Generation and Energy Storage:

  • Fuel Cells: Hydrogen can be used in fuel cells to generate electricity, providing a clean and reliable source of power. This technology can be used in power plants to decarbonise the electricity sector.
  • Energy Storage: Excess renewable energy can be used to produce hydrogen through electrolysis, which can then be stored and converted back to electricity or other forms of energy when needed, supporting grid stability and energy storage.

3.   Transportation:

  • Fuel Cell Electric Vehicles (FCEVs): Hydrogen can power fuel cell electric vehicles, offering a zero-emission alternative to traditional gasoline vehicles. Initiatives are underway to develop and deploy FCEVs by major automakers.
  • Heavy-Duty Vehicles: Green hydrogen is being explored for heavy-duty vehicles, buses, and trains, aiming to reduce emissions and improve sustainability in these sectors.

4.   Residential Heating:

  • Hydrogen Boilers: Green hydrogen can be used in hydrogen boilers and fuel cells to provide heat and hot water with zero carbon emissions. Pilot projects are underway to explore the feasibility of using hydrogen for residential heating.

Industrial Energy Consumption

The industrial sector is a major consumer of energy, accounting for around 37% of global energy use in 2022. This energy-intensive user is still largely dependent on fossil fuels, which contribute about 65% of the sector’s energy mix. The continued reliance on fossil fuels in industry has significant environmental and economic implications that necessitate a shift towards more sustainable alternatives.

The combustion of fossil fuels in industrial processes releases large amounts of greenhouse gas emissions, particularly carbon dioxide (CO2). Industry is responsible for around a quarter of global energy-related CO2 emissions. To meet climate goals and mitigate the impacts of climate change, the industrial sector must drastically reduce its emissions. The International Energy Agency estimates that industrial direct emissions need to decline by nearly a quarter by 2030 in the Net Zero Emissions scenario. This will require accelerated policy action and the widespread adoption of low-emission technologies.

In addition to the environmental concerns, the reliance on natural gas and other fossil fuels exposes industrial companies to price volatility and supply disruptions. Recent geopolitical events have highlighted the vulnerability of natural gas supplies, leading to significant price spikes. This price instability makes long-term planning and budgeting difficult for energy-intensive industries. Transitioning to alternative energy sources, such as renewable electricity and green hydrogen, can provide more stable and predictable energy costs.

Fortunately, there are several promising alternatives to fossil fuels that can meet the energy needs of industry in a more sustainable manner. Electrification of industrial processes, powered by renewable energy sources like solar and wind, is a key strategy for decarbonising the sector. Renewable electricity can be used to power electric boilers, furnaces, and other equipment, reducing the reliance on natural gas and other fossil fuels. Additionally, energy storage technologies like thermal batteries can help balance the intermittency of renewable energy, ensuring a reliable energy supply for industrial operations.

Another alternative is the production of green hydrogen using renewable electricity. Green hydrogen can be used as a substitute for fossil fuels in various industrial applications, such as steel production, chemical manufacturing, and high-temperature heating. While the technology is still maturing and faces cost challenges, green hydrogen has significant potential to decarbonise hard-to-abate industrial processes.

In addition to transitioning to sustainable energy sources, the industrial sector can also improve its energy and material efficiency to reduce overall energy consumption and emissions. Strategies such as waste heat recovery, cogeneration, and the adoption of more efficient equipment and processes can significantly improve the energy efficiency of industrial operations. Furthermore, material efficiency measures, such as increased recycling, product design for circularity, and process optimisation, can help curb the demand for energy-intensive materials and further reduce the sector’s environmental impact.

Benefits of Green Hydrogen for Industrial Processes

Reducing Greenhouse Gas Emissions

One of the primary advantages of using green hydrogen in industrial processes is its potential to significantly reduce greenhouse gas emissions. Unlike traditional hydrogen production methods that rely on fossil fuels and emit carbon dioxide, green hydrogen is produced through the process of electrolysis, which splits water molecules into hydrogen and oxygen using renewable electricity. This process is entirely clean and emits no greenhouse gases during production or use.

The industrial sector is responsible for around a quarter of global energy-related carbon dioxide emissions. By replacing fossil fuels with green hydrogen in various industrial applications, such as steel production, chemical manufacturing, and high-temperature heating, the industry can drastically reduce its carbon footprint and contribute to global climate change mitigation efforts. The International Energy Agency estimates that industrial direct emissions need to decline by nearly a quarter by 2030 to meet net-zero emissions goals, and the widespread adoption of green hydrogen can play a crucial role in achieving this target.

Improving Energy Efficiency and Flexibility

In addition to its environmental benefits, green hydrogen can also enhance the energy efficiency and flexibility of industrial operations. When used in combined heat and power (CHP) systems, green hydrogen can provide both electricity and heat simultaneously, optimizing energy use and reducing overall energy consumption. This is particularly advantageous for energy-intensive industries that require both heat and power for their processes.

Moreover, green hydrogen can serve as a versatile energy carrier, offering flexibility in its applications. It can be used as a fuel for transportation, a feedstock for chemical processes, and a means of energy storage and grid balancing. This flexibility allows industrial facilities to diversify their energy sources and reduce their reliance on a single energy type, improving the resilience and security of their energy supply.

Enhancing Energy Security and Reducing Price Volatility

The reliance on fossil fuels, particularly natural gas, exposes industrial companies to price volatility and supply disruptions, making long-term planning and budgeting difficult. Recent geopolitical events have highlighted the vulnerability of natural gas supplies, leading to significant price spikes that have had a significant impact on industrial operations.

By transitioning to green hydrogen, industrial facilities can reduce their exposure to these price fluctuations and supply chain disruptions. Green hydrogen production can be decentralised, with companies generating their own hydrogen on-site or sourcing it from nearby renewable energy facilities. This diversification of energy sources enhances energy security and provides a more stable and predictable energy supply for industrial processes.

Furthermore, as the cost of renewable energy continues to decline and the technology for green hydrogen production matures, the production cost of green hydrogen is expected to become more competitive with traditional fossil fuels. This can help industrial companies manage their energy costs more effectively and plan for long-term investments with greater certainty.

Enabling a Circular Economy and Waste Utilization

Green hydrogen can also play a role in the transition towards a more circular economy, where waste and emissions are minimised, and resources are reused and recycled. In industrial processes, green hydrogen can be used to capture and utilise carbon dioxide emissions, converting them into valuable products such as synthetic fuels, chemicals, and materials.

This process, known as power-to-X or e-fuels, allows industrial facilities to close the loop on their carbon emissions, reducing waste and contributing to a more sustainable industrial ecosystem. By integrating green hydrogen into these circular economy strategies, industrial companies can not only reduce their environmental impact but also unlock new revenue streams and business opportunities.

Fostering Innovation and Job Creation

The shift towards green hydrogen in industry also presents significant economic opportunities, including the potential for job creation and the stimulation of innovation. As governments and industries worldwide invest in the development of green hydrogen technologies and infrastructure, new industries and job markets will emerge, particularly in regions with abundant renewable resources.

The production, distribution, and utilization of green hydrogen will require the development of specialized skills and the establishment of new supply chains, creating employment opportunities in areas such as engineering, manufacturing, and maintenance. Moreover, the research and development efforts aimed at improving the efficiency and scalability of green hydrogen production can spur technological advancements that benefit the broader industrial sector.

Industrial Applications of Green Hydrogen

Here are some real-world examples of green hydrogen applications:

BOC Bulwer Island Refinery

The BOC Bulwer Island Refinery in Brisbane is a world-class example of a closed-loop industrial design using solar PV energy and wastewater to generate clean hydrogen. This hydrogen is used for the production of rare gases such as argon and for ammonia plants and power stations. The refinery was initially built in 1996 and originally produced gases using hydrogen produced via a high emissions process called steam-methane reforming. However, it was later upgraded to use green hydrogen produced using renewable power to split water molecules into hydrogen and oxygen.

Thyssenkrupp Steel Europe’s Duisburg Plant

Thyssenkrupp Steel Europe, one of the world’s largest steel producers, is piloting the use of green hydrogen at its Duisburg plant in Germany. The company plans to replace coking coal, a major source of emissions in traditional steel production, with hydrogen produced using renewable electricity. This “direct reduction” process can reduce CO2 emissions by up to 95% compared to the conventional blast furnace method. Thyssenkrupp aims to gradually scale up the use of green hydrogen to eventually produce climate-neutral steel on an industrial scale by 2045.

Yara Sluiskil Ammonia Plant

Yara, a major global fertilizer producer, is partnering with Ørsted to build one of the world’s largest green ammonia production facilities at its Sluiskil plant in the Netherlands. The plant will use renewable electricity from offshore wind to power electrolyzers that split water into hydrogen and oxygen. This green hydrogen will then be combined with nitrogen to produce green ammonia, a key ingredient in fertilizers. Once completed, the facility is expected to produce 75,000 tons of green ammonia per year, helping to decarbonize Yara’s ammonia production and reduce the carbon footprint of its fertilizer products.

These examples demonstrate how leading industrial companies are actively transitioning to green hydrogen to reduce emissions in hard-to-abate sectors like steel and chemicals. The adoption of this clean feedstock is a critical step towards achieving deeper decarbonization across heavy industry.

Emirates Steel-Masdar Green Hydrogen Project

Emirates Steel Arkan, one of the largest steel producers in the Middle East, has partnered with renewable energy company Masdar to develop a green hydrogen project to decarbonize the UAE’s steel industry.

This pilot project, located at Emirates Steel Arkan’s production facilities in the Industrial City of Abu Dhabi, is the first-of-its-kind in the Middle East and North Africa region.  The project is currently in the installation phase, with electrolyzers already delivered to the site. It is expected to be commissioned in early 2024.

The goal of the project is to demonstrate the use of green hydrogen – produced using renewable energy – to extract iron from iron ore, instead of using natural gas.  This represents a major milestone in Emirates Steel Arkan’s commitment to achieving its sustainability objectives and aligning with the UAE’s net-zero by 2050 target.

Challenges and Opportunities

The challenges and opportunities associated with implementing green hydrogen technology in industries are described in this section.

Challenges

Technology Readiness and Cost

Improving efficiency and reducing costs of electrolysis and fuel cell technologies is critical for green hydrogen to be cost-competitive

Advancing technologies from lower technology readiness levels (TRLs) to higher, commercially viable levels is a major hurdle

Infrastructure Development

Building large-scale green hydrogen production facilities, distribution networks, and storage infrastructure requires significant upfront investment

Retrofitting existing infrastructure to support green hydrogen is technically complex and expensive

Market Off-takers and Demand Creation

Establishing consistent, widespread demand for green hydrogen across industries like transportation, manufacturing, and power generation is needed

Overcoming customer acceptance barriers by demonstrating reliability, efficiency, and environmental benefits of green hydrogen

Financing and Investment

Securing sufficient financing and investment to scale up green hydrogen production and infrastructure is challenging

Lack of policy support and market incentives makes it difficult for green hydrogen to compete with conventional, cheaper hydrogen production methods

Opportunities

Decarbonizing Hard-to-Abate Sectors

Green hydrogen can play a critical role in decarbonizing heavy industries like steel, chemicals, and cement that have limited alternatives to fossil fuels

Leveraging Existing Infrastructure

Utilizing existing natural gas pipelines, storage facilities, and industrial facilities can help accelerate green hydrogen deployment

Enabling Renewable Energy Integration

Green hydrogen production can help integrate and store intermittent renewable electricity, improving grid flexibility and resilience

Policy Support and Regulatory Frameworks

Targeted government policies, incentives, and regulations can help drive investment and scale-up of green hydrogen technologies.

Collaboration and Partnerships

Partnerships between industry, government, and research institutions can help address technical, financial, and regulatory barriers

Overall, realizing the full potential of green hydrogen will require coordinated efforts to overcome the significant technical, economic, and infrastructure challenges. But the opportunities to decarbonize hard-to-abate sectors and enable greater renewable energy integration make green hydrogen a critical component of the energy transition.

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