In December 2023, the U.S. Treasury Department issued the Inflation Reduction Act (IRA).Clean hydrogenProposed guidance for tax credits. The IRA requires credit eligibility to be determined based on the Clean Air Act's definition of life-cycle greenhouse gas emissions, including significant indirect emissions from the production process. For eligible hydrogen production facilities, the credit amount starts from 0. per kilogram of hydrogen producedAnywhere from $60 to $3 per kilogram of hydrogen, depending on the lifecycle emissions of hydrogen production. AlthoughClean hydrogenThere is great potential to reduce emissions across a range of industries and applications, but traditional hydrogen production often leads to severe climate pollution. The Clean Hydrogen Production Credit aims to make clean hydrogen production with the least climate pollution more economically competitive and accelerate the development of the clean hydrogen industry in the United States. The Inflation Reduction Act's hydrogen tax credit will help build a clean hydrogen industry, which is essential to reduce emissions from hard-to-decarbonize sectors such as heavy industry and heavy transportation.
In February 2023, the EU adopted two enabling acts setting out rules for the definition of renewable hydrogen, approving funding for the first two waves of hydrogen-related important projects of European common interest in 2022 and announcing that the European Hydrogen Bank will conduct its first auction at the end of 2022. The UK published a low-carbon hydrogen standard in July 2022 and launched a consultation on the certification scheme in February 2023. The first round of electrolysis allocations was launched to support projects that use electrolysis to produce hydrogen, with the goal of awarding contracts by the end of 2023.
In March 2022, China issued the Medium and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021-2035), which clarified the energy attributes of hydrogen as an integral part of the future national energy system, giving full play to the clean and low-carbon characteristics of hydrogen energy, and promoting the green and low-carbon transformation of energy-using terminals such as transportation and industry, as well as high-energy-consuming and high-emission industries. At the same time, it is clear that hydrogen energy is the key direction of strategic emerging industries, and it is a new growth point for building a green and low-carbon industrial system and creating industrial transformation and upgrading.
India approved the National Green Hydrogen Mission in January 2023 with the goal of producing 5 metric tons of renewable hydrogen by 2030 and becoming a leading electrolyser manufacturer. Namibia launched its Green Hydrogen and Derivatives Strategy in November 2022, becoming the only Sub-Saharan African country to adopt a hydrogen strategy, along with South Africa.
Hydrogen production
Hydrogen is a clean fuel that produces only water when consumed in a fuel cell. Hydrogen can be produced from a variety of domestic sources, such as natural gas, nuclear, biomass, and renewable energy sources such as solar and wind. These qualities make it an attractive fuel option for transportation and power generation applications. It can be used in automobiles, homes, portable power supplies, and many more applications. Hydrogen is an energy carrier that can be used to store, move, and deliver energy produced by others.
Hydrogen productionHeat treatmentThe process typically involves steam reforming, which is a high-temperature process in which steam reacts with a hydrocarbon fuel to produce hydrogen. Many hydrocarbon fuels can be reformed to produce hydrogen, including natural gas (containing methane CH4), diesel, renewable liquid fuels, gasified coal, or gasified biomass. Today, about 95% of hydrogen is produced by steam reforming of natural gas (containing methane CH4).Grey hydrogen。The process uses a reformer to react steam with methane and nickel catalysts at high temperatures and pressures to form hydrogen and carbon monoxide (CO). The disadvantage of this method is that they produce carbon as a by-product, so carbon capture and storage (CCS) is essential to capture and store this carbon, and if the carbon released in the process is captured, then this hydrogen is calledBlue hydrogen
Water can be separated into oxygen and hydrogen by the electrolysis process. Electrolysis processIt takes place in an electrolyzer and functions in the opposite way of a fuel cell, which does not use the energy of hydrogen molecules like a fuel cell, but instead produces hydrogen from water moleculesGreen hydrogen。The process produces pure hydrogen with no harmful by-products. Another benefit is that because this method uses electricity, it can also divert hard-to-store excess electricity, such as surplus wind energy, into electrolysis, which can be used to generate hydrogen energy needs that can be stored for future use.
Decarbonization of hydrogen
According to the Global Energy Agency, hydrogen is an important pathway to net-zero emissions by 2050. The key pillars of decarbonization of the global energy system include upgradingEnergy Efficiency, Behaviour Change & Demand Reduction, Electrification, Renewables, Hydrogen & moreccus。The importance of hydrogen in net-zero scenarios is reflected in its increasing share of cumulative emission reductions. Strong growth in demand for hydrogen, as well as research and development of cleaner hydrogen production technologies, enable hydrogen to make a significant contribution to the decarbonization of hard-to-reduce sectors such as heavy industry and long-distance transportation in a net-zero scenario.
Clean hydrogen has three main applications in a decarbonized economy: energy storage and load balancing, as a feedstock, and as a fuel. These applications are found in all sectors, including transportation, industry, agriculture, and power. Due to its versatility and scalability, clean hydrogen has the potential to transform the global decarbonization landscape.
Energy storage and balancing: A power system dominated by wind and solar will prevail as a mechanism for decarbonizing the entire economy. With the increasing share of renewable energy in the grid, hydrogen is one of the few technologies that can help balance the power system throughout the year. During periods of abundant wind and solar**, excess renewable energy can produce green hydrogen for long-term energy storage. When renewables** are insufficient, stored hydrogen can provide clean energy to meet demand.
Hydrogen as a feedstock: In addition to energy storage and balancing, hydrogen can also be used as a feedstock and fuel for other hard-to-abate industries. That said, hydrogen is a key feedstock for the production of electric fuels (clean, electricity-generated, direct-use hydrocarbon fuels). In a low-carbon economy, clean hydrogen will also become an important feedstock for major industrial processes, including the production of chemicals and steel.
Hydrogen as a fuel: As a fuel, hydrogen can be used as fuel cells in the transportation sector, for medium- to heavy-duty vehicles, and in shipping, where decarbonization options are limited. When hydrogen is used in fuel cell power generation, water is the only by-product. Using hydrogen to produce energy in this way does not produce carbon dioxide, one of the main greenhouse gases responsible for global warming. Hydrogen is already being produced on a large scale for the manufacture of fertilizers and the petrochemical industry. But more recently, hydrogen has been seen as a way to decarbonize industries such as shipping, long-haul trucking, steelmaking, industrial heating, and aerospace.
Hydrogen energy is a secondary energy source with diverse production methods and few resource constraints, and the important role of hydrogen energy in the global decarbonization process has gradually become prominent, and it will become a key way to mitigate climate change in the future and an important field for ESG development and exploration.