Being the most abundant chemical element on the plant, hydrogen is present in 75% of matter. While being utilized in multiple industries, hydrogen has always been a serious concern for forming pollutant emissions. Considering a significant solution for reducing greenhouse gases, green or renewable hydrogen is observed to act as a clean source of energy.
Considering the rising demand for clean energy, the green hydrogen market is observed to witness the fastest pace of growth. Additionally, the overall growth in private and public investments with unparalleled emphasis over power conversion systems are supplementing the growth of the market. Nations such as Germany, Japan, Australia, India, China and United States, being at the forefront of green hydrogen production hold immense potential to expand rapidly in the upcoming decade. The growth is supplemented by investments and key goals.
While playing a pivotal role in the power generation industry, green hydrogen holds the potential to address the concerns associated to renewable energy sources. Green hydrogen can be majorly used in energy storage, grid stabilization, fueling power plants and reducing carbon emission. Precise production of green hydrogen carries lucrative set of opportunities to balance demand on electricity grid.
After the discovery of electric vehicles, the world is focused on the integration of hydrogen fuel cell electric vehicles. While players such as Hyundai and Toyota have initiated the production of such vehicles, green hydrogen can act as a major application for the transportation sector. This hydrogen is also considered to be suitable for heavy-duty vehicles such as trucks and buses. Toyota is observed to be pioneer in such hydrogen fuel cell vehicles as the player launched Mirai Hydrogen. Additionally, the company is working on hydrogen-powered buses.
Ammonia production, refining and steel manufacturing are a few major current applications of green hydrogen considering the industrial processes. Green hydrogen holds the capability to replace coal in the reduction process of iron ore in order to produce steel. Air Liquide, a major leader in industrial gases, invested in green hydrogen production in order to supply the same to glass manufacturing and electronics.
Giving it an instance, Airbus has started its plans to launch zero-emission hydrogen aircraft by 2035. Whereas Maersk has begun its investment in green hydrogen to achieve the goal of net-zero emissions by 2050. Aviation and Maritime are major sectors to contribute to the global greenhouse gas emissions. While the integration of green hydrogen in such sectors can by an alternative to fuels.
Green hydrogen is predicted to be extensively used in a number of industries, including energy storage, industrial processes, and transportation, as production capacity rises and costs fall.
Green hydrogen is expected to play a major role in decarbonization efforts and become a cornerstone of global energy policies. Globally, governments and businesses are realizing its potential to meet climate targets and lessen reliance on fossil fuels.
Green hydrogen is a critical technology for the decarbonization of industries like steel, ammonia, energy storage, and heavy-duty transportation, according to the U.S. Department of Energy (DOE). In order to meet President Joe Biden's targets of a 100% clean electricity grid by 2035 and net-zero carbon emissions by 2050, clean hydrogen is essential to DOE's plan.
Canada has made a major financial and regulatory commitment to supporting sustainable technologies like hydrogen. The budget for 2023 includes approximately $60 billion in new spending, of which nearly $21 billion is allocated for clean technology initiatives and investments.
The oil giant China Petroleum & Chemical, or Sinopec, received approval in January for a 20.5 billion yuan ($2.9 billion) green hydrogen investment project in Ulanqab, an Inner Mongolian city renowned for its vast grasslands.
Presently, India imports more than 40% of its basic energy needs, totaling more than USD 90 billion annually. India understands the importance of green hydrogen as it aims to achieve Net Zero by 2070 and energy independence by 2047. In order to create a Green Hydrogen ecosystem and spark a systemic reaction to the potential and difficulties presented by this emerging industry, the National Green Hydrogen Mission seeks to offer a thorough action plan.
The Indian government launched the National Green Hydrogen Mission in January 2023, with an investment up to Rs. 19,744 crores till 2029-2030. According to the government, the mission will lead to a notable decarbonization of the economy.
The government aims to make India a global hub for production, export and usage of green hydrogen along with its derivatives. The expected outcomes by this mission by 2030 are to create over six lakh jobs in the country along with cumulative reduction in fossil fuel imports over one lakh crore rupees.
Under the Ministry of New and Renewable Energy, the government has also initiated Incentive Scheme for Green Hydrogen Production to maximize the cost-competitiveness of green hydrogen and its derivatives. Along with that, the incentive scheme aims to encourage large scale utilization of green hydrogen.
Japan’s Hydrogen Strategy
The Japanese government is already committed notable funding to promote hydrogen production capabilities. The government has planned to invest approximately $14 billion through Green Innovation Fund in hydrogen-associated research and development activities, that aims to spurge an additional private investment of $10 billon in next 10 years.
Japan’s recent track of subsidies act as a significant factor for the green hydrogen market. For instance, the nation’s contract-for-differences subsidy aims to increase the importers of lower-carbon hydrogen into the country for industrial projects. Additionally, the country has focus on using green hydrogen in transportation applications.
Unparalleled Initiatives by Canada
Back in 2020, Canada announced its National Hydrogen Strategy, a three-phase strategy for creating hydrogen economy. The whole plan focuses on increasing its hydrogen production, opening doors for its application in multiple sectors. While beginning of the planning of new infrastructure for hydrogen lies in the first phase, through 2050, the nation aims to commercialize transportation applications by the third phase of its strategy.
“According to Canada’s plan, its domestic hydrogen market could reach CAD50 billion (per year) by 2040. The hydrogen production is set to offer opportunities to the export industry while contributing up to 30% of Canda’s energy.”
Where the globe strives to address the environmental concerns, the transition to sustainable energy in the upcoming decade looks game-changer. While understanding the ecosystem of the green hydrogen market, the term comprises of interconnected network taking from the adoption of green hydrogen to distribution while offering several opportunities.
Initiative Towards Green Hydrogen Economy
Hitachi Energy’s Major Step Towards Clean Power
In year 2022, Hitachi Energy announced a collaboration with H2 Green Steel in Sweden. Under the collaboration, H2 Green Steel’s plant will utilize green hydrogen instead of coal to reduce CO2 emissions approximately by 95%. Additionally, the company is working with multiple industrial consumers to decarbonize power generation with hydrogen cell technology. The company’s HyFlex Hydrogen Power Generator can mitigate up to 1,600 tons of diesel fuel per year.
The green hydrogen market is fragmented with multiple significant investors across the globe. Energy ventures in several countries promote breakthroughs to scale up the production of green hydrogen. HydrogenOne Capital, based in the United Kingdom offers scalable hydrogen solutions and infrastructure. The company has started investments in ITM Power and Hyzon Motors.
On the other hand, Shell Ventures from the Netherlands has started investing strategically in hydrogen production while promoting sustainable energy. The company has started backing Lhyfe and electronchaea in order to scale up the production of hydrogen. BlackRock, based in the United States has announced its support to ITM Power and Lhyfe. The investment focuses on production of large-scale renewable and hydrogen projects.