The green hydrogen has become one of the mainstays of recovery funds of the European Union. Some funds that will become the largest stimulus package ever financed through the EU budget , with a total of 1.8 trillion euros of economic injection to rebuild Europe after COVID-19.

The energy transition is one of the axes of this recovery, with 30% of the budget allocated to the fight against climate change. And this is where green hydrogen has started to gain positions, growing in interest and placing itself in the public debate as one of the fundamental pillars for the decarbonization of the economy .

From Europe, different initiatives are already being promoted throughout the hydrogen value chain, among which are the manufacture and installation of more competitive electrolysers , the construction of a hydrogen transport backbone or the installation of hydrogenerators for transport by road .

What exactly is green hydrogen

Hydrogen is the most abundant chemical element on the planet, but it has a problem: it is not freely available in the environment (for example, in a reservoir) but is always associated with other elements (for example, in water, H2O, or in Methane, CH4). Therefore, in order to be used in energy applications, it is first necessary to release it, that is, to separate it from the rest of the elements.

To carry out this separation and have free hydrogen, it is necessary to perform some processes and spend energy on them. That defines hydrogen as an energy vector , and not as a primary energy source or fuel as many may think.

In other words, hydrogen is a substance capable of storing energy that can then be released in a controlled way elsewhere . In this way, it is comparable to a lithium battery that stores electricity, and not to a fossil fuel such as natural gas.

The potential of hydrogen in the fight against climate change lies in its ability to replace fossil fuels in those applications with greater complexity of decarbonization , such as maritime and air transport or some industrial processes. In addition, it also has great potential as a seasonal (long-term) energy storage system, accumulating energy for long periods of time that can then be used on demand.

The importance of the origin of hydrogen

To be a colorless gas, the truth is that when we talk about hydrogen, it is usually very colorful. Many of you will have heard of green, gray, blue hydrogen, etc.

The color assigned to hydrogen is nothing more than a label used to classify it based on its origin and the amount of carbon dioxide released during its generation. That is, a simple way to know how “clean” it is:

  • Brown hydrogen : it is obtained through the gasification of coal and during its production, CO2 is released. It is also sometimes known as black hydrogen.
  • Gray hydrogen : it is obtained from the reforming of natural gas. It is currently the most abundant and cheapest to produce, although the cost is expected to increase due to the price of CO2 emission rights . To produce one ton of gray H2, 9 to 12 tons of CO2 are emitted.
  • Blue hydrogen : it is also generated from the reforming of natural gas, with the difference that part or all of the CO2 emissions are avoided through a carbon capture system. Later, that CO2 can be used to make synthetic fuels , for example.
  • Green hydrogen : it is obtained from the electrolysis of water using electricity from renewable sources. It is the most expensive, but its price is expected to gradually decline as the costs of renewable energy and electrolysers fall. Another aspect of green hydrogen is that produced from biogas, taking advantage of livestock, agriculture and / or urban waste.

In reality, the process to generate green hydrogen is not complex at all: electrolysis is simply using electrical current to break down water (H2O) into oxygen (O2) and hydrogen (H2). The real challenge lies in doing it competitively , which requires abundant and cheap renewable electricity (this is more or less fixed), and efficient and scalable electrolyzer technology (there is still a lot to do here).

Producing green hydrogen is still expensive, but it will come down in price

Although it may seem like a novelty or a recent discovery, the reality is that hydrogen (and its derivatives such as ammonia) has been used in the oil sector and in the chemical industry for many years. In fact, its consumption has more than tripled since 1975 , and forecasts suggest that it will continue to grow in the coming years.

Global hydrogen demand Evolution of the world demand for hydrogen.

The problem is that hydrogen is currently produced almost exclusively using fossil fuels . According to data from the International Energy Agency, 6% of the world’s natural gas (which is responsible for generating three-quarters of total hydrogen) and 2% of coal are used for hydrogen production.

As a consequence, hydrogen production is responsible for the emission of about 830 million tons of carbon dioxide per year . To put it in perspective, the entire Spanish electricity system emitted 36.1 million tons of CO2 in 2020 , which was one of the lowest-emitting years in history.

Since producing green hydrogen is still expensive , currently the participation of water electrolysis in hydrogen generation is still testimonial, with less than 0.1% of world production. However, with the decrease in the costs of renewable electricity, in particular solar photovoltaic and wind energy , their interest is growing, which is leading companies to build different demonstration projects that position them for the future .

The cost of green hydrogen is determined mainly by the price of renewable electricity and the price of the electrolyzer. According to data from the International Renewable Energy Agency, in order to be competitive, its price has to drop from about $ 5 per kilogram today to around $ 1 per kilogram . For this, the main challenges lie in reducing the cost of electrolyzers, increasing their efficiency, increasing their useful life and the availability of cheap electricity .

Journey to a competitive green hydrogen.  Source: IRENA

Green hydrogen applications and why it can help us fight climate change

Theoretically, one of the most effective ways to decarbonize the economy is to try to electrify the entire energy system . However, at the moment, electrical and battery technology is not viable for depending on what applications. In many of them, green hydrogen can replace fossil fuels, although not all of them are as mature or as simple:

  • Substitute brown and gray hydrogen . The first step should be to replace all the current fossil hydrogen used in the industry, taking advantage to develop the technology and reduce costs. The challenge is not exactly small: producing the entire global demand for hydrogen from electricity would consume 3,600 TWh , more than the total annual electricity generation of the European Union.
  • Heavy industry . Steel, cement, chemical companies, and other large consumers of fossil fuels are not easy to electrify, or it is not directly viable. Here green hydrogen could be a solution.
  • Energy storage . This is undoubtedly one of the most promising applications of hydrogen: serving as a seasonal energy storage system . With a horizon with more and more penetration of renewable energies, we will find moments in which the cost of electricity will be really cheap, and there will even be surpluses due to not having where to consume it. And this is where hydrogen will come into play, which can be generated at cheap prices, to later be used on demand and in any application, be it electricity generation or any other.
  • Transportation . Transport is undoubtedly another of the most promising applications of hydrogen. In light transport at the moment batteries are winning the game, but some manufacturers ( especially the Japanese ) continue to develop their fuel cell models with increasingly promising results . However, in heavy transport or in others such as sea and air , battery technology still has many limitations. Here again, hydrogen has a great opportunity.
  • Heating . Domestic and industrial heating are sectors that cannot always be electrified (the heat pump is not always an option) and where hydrogen could be a partial solution. In addition, existing infrastructure (such as gas networks) could be used to allow for increased demand. In fact, mixing hydrogen of up to 20% by volume in the existing gas network requires minimal modification of the network or end-users’ household appliances.

Hydrogen is far from the ideal fuel. Its density is very low, which makes it difficult and expensive to store and transport. But it is also true that hydrogen has a lot of potential and as a substitute for fossil fuels it has some advantages that other technologies cannot solve due to its limitations , mainly in areas such as heavy transport, heating or industry.

The reality is that, today, it is still an expensive technology and that it depends on having large amounts of renewable and very cheap electricity available . As if that were not enough, the efficiency of generating, storing, transporting and consuming hydrogen can hardly exceed 30-50%, depending on the application (depending on the application). In any case, the EU’s bet is clear: green hydrogen is here to stay.


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