Hydrogen at tipping point as policy makers reach for solutions

At the turn of the century, Malcolm Gladwell published The Tipping Point, in which he defined the phenomenon as “the moment of critical mass, the threshold, the boiling point.”

In the bestselling debut, he described “how little things can make a big difference,” as he sought to explain how small events led to mysterious but sweeping social changes.

Hydrogen is experiencing its tipping point, but the origins this time are neither small nor mysterious. Right now, the world desperately needs alternatives to hydrocarbons, whether Russian natural gas, jet fuel, bunker fuel, coking coal or diesel, and hydrogen is the only serious contender.

If the scale of the challenge wasn’t clear, the UN Intergovernmental Panel on Climate Change (IPCC)’s latest report published last week spelled out in no uncertain terms how quickly we need to cut emissions if we are to avoid the worst impacts of climate change. Short-term goals include ensuring that emissions peak by 2025 and fall by 43% by the end of the decade. The world needs to have achieved net zero emissions by 2050.

It’s a monumental task and we are currently well behind the curve.

The world needs to have achieved net zero emissions by 2050. It’s a monumental task and we are currently well behind the curve. Hydrogen is a crucial part of decarbonisation.

A parallel, but equally pressing, issue is the need to wean ourselves off Russian fossil fuels. Vladimir Putin’s invasion of Ukraine has highlighted Europe’s dependence on Russian hydrocarbons, but particularly natural gas. There is not enough liquefied natural gas (LNG) from our allies such as the United States, Qatar and Australia to replace what would be lost if Russian supplies were cut off. In the meantime, we continue to fund the Russian war effort to the tune of about $50 billion a year.

Either of these pressures alone would be enough to accelerate hydrogen’s role in industries from steelmaking to public transport. Together, they represent an irresistible force that is pushing clean hydrogen to the forefront of policy makers’ minds around the world.

Fortunately, hydrogen is ready to answer the call. Technology, such as electrolysis that allows the production of “green” hydrogen from water and renewable energy, has for been maturing for years and is ready to deliver at scale. Carbon capture and storage is being deployed at industrial clusters around the country over the coming decade and will help produce low carbon “blue” hydrogen for use in chemical production, transport and food manufacturing.

The cost of green hydrogen, already cheaper than traditionally produced “grey” hydrogen in many places thanks to the soaring price of natural gas over the past 12 months, is set to fall dramatically in the coming years. Wood Mackenzie said in December that some countries would be able to produce green hydrogen for $1/kg by 2030, while US electrolyser maker Ohmium has said it will be able to achieve that price in India by 2025. That compares with $6.71/kg for grey hydrogen made from natural gas in March this year.

Right now, the world desperately needs alternatives to hydrocarbons, whether Russian natural gas, jet fuel, bunker fuel, cooking coal or diesel, and hydrogen is the only serious contender.

The UK government has seen the writing on the wall and last week doubled its low carbon hydrogen production target to 10 GW, of which at least 5 GW will be green hydrogen. It is not acting alone. The European Union recently doubled its goal for green hydrogen capacity to 80 GW by 2030. The Biden administration in the US has mandated that all the infrastructure needed to increase natural gas shipments to Europe must be capable of conversion to hydrogen.

Amidst a slew of hydrogen policy announcements from the UK government last week was a new £375 million clean tech fund that included £240 million to support hydrogen production through the Net Zero Hydrogen Fund, £100 million for the Hydrogen Business Model, a subsidy for green hydrogen production, and £26 million for the Industrial Hydrogen Accelerator.

Those funds and support mechanisms are the strongest signal yet to the private sector that the UK is a favourable destination for hydrogen investment. Home to some of the world’s best offshore wind energy resources and with a growing ecosystem of companies at all stages in the hydrogen value chain, from electrolyser components to hydrogen buses, the UK is poised to be a leading player in the emerging global hydrogen economy.

While we didn’t see everything we wanted from last week’s hydrogen announcements, we are heartened by the government’s clear commitment to putting hydrogen at the heart of the UK’s energy transition and net zero future. The tipping point is here.

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