The use of hydrogen is essential not only to reduce greenhouse gas emissions but to prevent the worst consequences of climate change. As such, this proposal has sparked a global race to build a business that could be worth billions of dollars in the near future.
Japan Y South Korea they have already focused on using more hydrogen as a fuel for transportation. Its specialists believe that this chemical element could be key to moving trucks, trains and airplanes. For example, the South Korean company Hyundai plans to export 64,000 heavy vehicles powered by this fuel by 2030.
The European Union aims to invest nearly $ 550 billion in developing hydrogen infrastructure, while Saudi Arabia he is considering building a hydrogen-based ammonia plant that would be powered by renewable energy and would cost him $ 5 billion. Globally, it is likely that this business will end up being valued at about $ 700 billion By 2050, analysts at the BloombergNEF agency calculated.
“Some countries are going against each other to reach their market share. We call it the hydrogen wars because of the way governments are rushing to subsidize these projects to be leaders. [en el sector]”Gero Farruggio, head of renewable energy at the research company Rystad Energy, told the US media.
An old idea is given a new impetus
The use of hydrogen as a source of energy not a new idea. It was born almost a century ago, in 1927, the year in which an electric machine was installed to produce gas in Norway with the aim of helping to produce fertilizers. Since then, it has been used in the manufacture of zeppelins, rocket engines, and nuclear weapons.
Today several industries, mainly those that specialize in petroleum refining and chemical manufacturing, already depend on hydrogen. As a rule, they use fossil fuels to produce it, emitting large volumes of CO2 at the same time that in annual terms can be equated to those produced by the economies of the United Kingdom and Indonesia combined, they estimated at the International Energy Agency.
However, hydrogen can be manufactured without producing carbon emissions, especially if it is manufactured using machines powered by renewable energy. This method minimizes carbon footprint because when hydrogen burns, it usually emits mainly water vapor.
Still, this technology has its drawbacks. Hydrogen is expensive to produce when greenhouse gases are not expelled, difficult to store, and, not least, highly inflammatory. However, this era appears to be turning out differently, David Hart, director of E4tech consulting in Switzerland, told Bloomberg.
The EU and its companies prepare to conquer the market
Currently europe is moving aggressively in this market, journalist Will Mathis highlights in his article for the agency. Thus, the president of the European Commission, Ursula von der Leyen, placed the Green Agreement at the center of an ambitious energy plan for the block valued at 750,000 million euros (about $ 873 billion). Its main goal will be to build the 40 gigawatt capacity this decade that would help it produce hydrogen from renewable sources.
The Danish company Green Hydrogen Systems It is the one that has everything to become one of the largest that will act soon in this sector. When Niels-Arne Baden joined Green Hydrogen Systems in 2014 as CEO, the company was only testing its machines. For years the company had been involved in a few small demonstration projects, mainly in Denmark. In particular, it delivered its electrolyzers for testing and then disassembled them.
“There was no market. There were only plans and many ideas,” Baden recalled.
However, the situation has changed since 2019. In the framework of an industrial fair held in the German city of Hannover, executives from several automotive companies and wind turbine manufacturers were interested on how electrolyzers could help them store some of their cheap, renewable electricity. Finally his orders invaded the company.
“There was no chance that we could deliver the volumes that we saw coming,” emphasizes Baden.
As a result, in 2019 the company turned to the Danish venture fund Nordic Alpha Partners to raise the new capital that was necessary to expand its production.
China is hot on its heels
While Europe has ambitious plans to reduce its emissions, China with theirs is catching up with him in this race. Recently, President Xi Jinping announced that his country would become CO2 neutral by 2060.
Now, in China’s Inner Mongolia region, a gigantic wind and solar farm is being built to produce hydrogen. On October 29, the largest oil refinery in the nation Sinopec announced that it would invest its resources to become a “major player” in this sector.
Today China is the largest and cheapest manufacturer of electrolyzers that takes advantage of low costs of labor and raw materials.
Cockerill Jingli Hydrogen, a joint venture established in China by the national Suzhou Jingli Hydrogen Manufacturing Equipment and John Cockerill of Belgium, opened an 18,000-square-meter factory in 2019 with the capacity to produce 350 megawatts of electrolyzers per year. Its power is expected to increase to 500 megawatts.
“The Chinese always have an advantage in that they go fast. And as soon as they reach critical mass, they are able to export,” Edgare Kerkwijk, managing director of consultancy Asia Green Capital Partners, warned Bloomberg.
European manufacturers are trying to keep up. Green Hydrogen Systems, Britain’s ITM Power and Norway’s Nel ASA seek to open factories within one year with a combined annual capacity of about 830 megawatts.
The German Thyssenkrupp AG claims that it already produces electrolyzers with a power of 1,000 megawatts a year. Meanwhile at Siemens Energy AG, also German, electrolyser production has been growing about 10 times each year, said Armin Schnettler, executive vice president for the company’s new energy business.
China has not yet managed to crack to the European market, but Nel ASA CEO Jon Andre Lokke cautions that it is only a matter of time.
“We are way ahead in the game. But we have to run very, very fast,” he concluded.