Commentary: Three reasons why the IEA report on hydrogen is a game-changer
The International Energy Agency’s groundbreaking new report on hydrogen, launched this month on the margins of the meeting of G20 energy and environment ministers in Japan, was a key moment for hydrogen, which is enjoying unprecedented momentum around the world.
There are at least three reasons why this report, The Future of Hydrogen: Seizing Today’s Opportunities, is a game-changer in the public debate about the part that hydrogen can play in clean energy transitions.
Firstly, it provides an objective and balanced assessment of the potential role of clean hydrogen in the energy mix from the most authoritative international energy organisation on the planet. The IEA’s comprehensive approach, covering all fuels and all technologies, measures hydrogen against the best available alternatives.
The IEA clearly outlines the great opportunities for clean hydrogen to decarbonise sectors where reducing emissions has proved hardest, like heavy industry and long-haul transport, and in providing long-term energy storage. But it also highlights hydrogen’s main challenges, such as high costs and an unclear regulatory framework. The IEA submitted its report to the G20 at the request of Japan’s presidency of the global forum, elevating the debate on clean hydrogen to the highest level of policy makers around the world.
Secondly, the IEA does a laudable job in clarifying the complementary role of clean hydrogen in the energy transition in those areas where it makes most sense. For instance, it points out that while electric battery-powered vehicles will be a big part of transport around the world, hydrogen fuel-cell vehicles have a strong case to provide long-distance travel and long-haul friight transport.
And even though electrification can help reduce CO2 emissions from industries like steel and chemicals, the IEA’s analysis shows that deep decarbonisation will also require tackling fossil fuel inputs, in particular through clean hydrogen. It’s often overlooked that industry (mainly refineries and chemicals) are already producing and using hydrogen from fossil fuels. The related CO2 emissions are vast: more than the total emissions of the United Kingdom and Indonesia combined, according to the report.
In buildings, there are also circumstances and applications where clean hydrogen is practical and can be cost effective compared with alternatives like heat pumps. The IEA report will hopefully facilitate a more level-headed public debate on what works best in the energy transition.
Thirdly, the IEA report doesn’t try to entice us with visions of a clean hydrogen paradise in 2050. Instead, its main focus is on highlighting real-world springboards for the necessary scaling-up of clean hydrogen in the next 10 years. The IEA has identified four near-term opportunities to boost clean hydrogen:
- make industrial ports, such as around the North Sea, the nerve centres for scaling up the use of clean hydrogen;
- build on existing infrastructure,by blending hydrogen into gas grids, for example;
- expand hydrogen in transport through fleets, freight and corridors; and
- launch the hydrogen trade’s first international shipping routes.
To realise this potential, the IEA provides a number of concrete policy recommendations that range from identifying long-term goals and stimulating commercial demand for clean hydrogen to addressing investment risks, supporting R&D to bring down costs and eliminating regulatory. In addition, the IEA calls for international cooperation on harmonising standards, sharing of good practices and cross-border infrastructure.
The validity of the pragmatic IEA approach was immediately confirmed at an investor forum organised by the Hydrogen Council on 15 June on the margins of the G20 ministers’ meeting. Banks and investment funds showed keen interest in engaging with the concrete clean hydrogen projects that were presented. But they also insisted on using existing value chains and infrastructure as much as possible to manage risks.
An important question is what’s going to happen next.
Governments will hopefully be encouraged to add further momentum to hydrogen by putting in place smart incentives and favourable regulatory frameworks, while actively building private-public partnerships to kick-start new clean hydrogen value chains.
The IEA states clearly that it stands ready to help by providing cutting-edge analysis on hydrogen, monitoring progress and coordinating the Clean Energy Ministerial Hydrogen Initiative that was launched in May.
Following the IEA report, policy makers should now be ready to start putting hydrogen plans into action. Opportunities that could make a crucial difference to our clean energy future are there to be seized.
Mr van Hulst, the Hydrogen Envoy at the Ministry of Economic Affairs & Climate Policy of the Netherlands, is a former Chair of the IEA Governing Board (2017-2018). He also chaired the High-Level Advisory Panel for the IEA’s report on The Future of Hydrogen.