The 10 most significant hydrogen developments of 2022

So much has happened in the hydrogen economy in 2022 it is impossible to write an exhaustive list of significant developments without testing the patience of readers, so we’ve decided to give you what we at HYCAP consider to be the top 10 and explain a little about the why.

When looking at this year’s highlights, we kept a few questions top of mind: will it have wide-reaching repercussions for the sector as a whole; how soon will it impact the market; will it impact opportunities to invest in hydrogen in the UK and Europe?

Unfortunately, choosing just 10 means leaving out some big moments for clean hydrogen in 2022, including some potential technological breakthroughs which we haven’t included because it is so difficult to predict those that will make it to commercial viability.

1) Russia’s invasion of Ukraine. While not an initiative of the hydrogen industry, Russia’s invasion of Ukraine on 24 February this year sparked a rush to replace Russian fossil fuel imports, particularly among EU countries, who relied on Russia for almost one third of its crude oil and more than 40% of its natural gas in 2020.

Responses have included a doubling of the UK’s 2030 low-carbon hydrogen production target to 10 GW and the EU’s REPowerEU plan to accelerate the green transition through, among other initiatives, producing 80 GW of electrolytic hydrogen and importing the same again (see 4 and 5 below).

2) Climate change reaches the northern hemisphere. It would be nice to think that climate change policy was driven purely by the science, but there’s no doubting that a summer of extreme heat and wildfires across Europe and the United States has also lit a metaphorical fire under the voters and politicians who are the drivers of policy. A record 40.3 degrees Celsius reached in the UK on July 19 appears to have focused minds – rising UK temperatures was cited by 75% of respondents as the biggest expected impact of climate change in September this year, up from 62% 6 months earlier.

Russia’s invasion of Ukraine on 24 February this year sparked a rush to replace Russian fossil fuel imports, particularly among EU countries, who relied on Russia for almost one third of its crude oil and more than 40% of its natural gas in 2020.

3) U.S. Inflation Reduction Act. While not a UK or EU policy, the Biden administration’s £369 billion Inflation Reduction Act, signed into law in August, is expected to have major repercussions for the global hydrogen sector thanks to the generous subsidies on offer – as much as $3/kg of hydrogen depending on how much carbon was emitted in its production.

The law is a “turning point” for the economics of hydrogen, according to Goldman Sachs, which said it makes green hydrogen (produced by splitting water with electrolysers) profitable at scale. While this is expected to generate billions of dollars of investment in clean hydrogen in the U.S., it has led to calls for the UK and EU to respond with an equally enticing package of incentives to ensure funds don’t flow across the Atlantic.

4) UK Hydrogen Business Model. On 20 July, the UK government opened the application window for funding under the Hydrogen Business Model and £240 million Net Zero Hydrogen Fund, the world’s first subsidy scheme for clean hydrogen production with the aim of supporting at least 250 MW in the first allocation round. A shortlist of successful projects is expected to be announced in early 2023, although an exact date is yet to be provided.

While the UK was the first to put a hydrogen subsidy scheme in place, it is not expected to be as generous as that on offer in the U.S. However, the strike price for specific projects will be set in bilateral negotiations with developers so it remains an open question. UK government funding for hydrogen is coming from other directions too.

The £26 million Industrial Hydrogen Accelerator Programme run by the Department for Business and Industrial Strategy has awarded millions of pounds already to projects aiming to decarbonise industries including asphalt, cement, steel and ceramics. £25 million of funding for technologies for producing hydrogen from biomass and waste was unveiled earlier this month, while a £20 million competition in the Tees Valley to explore how hydrogen can be used to reduce emissions in the transport sector was launched in October.

There’s no doubting that a summer of extreme heat and wildfires across Europe and the United States has also lit a metaphorical fire under the voters and politicians who are the drivers of policy.

5) REPowerEU. Many European Union countries started this year considerably more dependent than the UK on Russian hydrocarbons – about 55% of Germany’s natural gas came from Russia before its invasion of Ukraine. The EU has responded swiftly. REPowerEU – a strategy to wean itself off Russian hydrogen carbons – includes measures to increase hydrogen production capacity, develop partnerships with other producing nations to build hydrogen corridors in the Mediterranean and the North Sea.

Since REPowerEU was launched in May, the EU has announced further hydrogen initiatives including €10.6 billion for hydrogen-related projects through Hy2Use and Hy2Tech and at least €3 billion for the so-called European Hydrogen Bank, which will become a market-maker for hydrogen by guaranteeing purchases to create certainty of demand. Germany has been leading the way in terms of hydrogen imports, signing agreements with the likes of Canada, with who it signed a five-year deal in August.

6) COP27 shipping agreement. COP27 in Egypt was an important event for clean hydrogen, which was named as one of five sector-specific priority actions named under the summit’s Breakthrough Agenda. The World Bank used the event to announce the creation of the Hydrogen for Development Partnership (H4D), a new global initiative to boost the deployment of low-carbon hydrogen in developing countries.

However, the biggest win for hydrogen-led decarbonisation arguably came from the shipping industry, with companies including Maersk, MAN ES and the Getting to Zero Coalition committing to the achievement of commercially viable, zero-emission, deep-sea vessels from 2030 with the intention of using exclusively zero-emission-powered ocean-freight services by 2040; the scaling-up of green hydrogen production to 5.5 million tons per year by 2030; and the full decarbonisation of the shipping sector by 2050 at the latest.

7) France-Spain hydrogen pipeline. Billions of pounds, dollars and euros need to be invested in hydrogen infrastructure to produce, transport, store and supply clean hydrogen and enable the hydrogen economy. A big step towards the hydrogen transport piece of the puzzle was made this month with the announcement that H2MED, a €2.5 billion undersea pipeline between France and Spain will be dedicated to hydrogen. The 455 km pipeline will have a capacity of 2 million tonnes a year and be ready by 2030, and will form a major artery of the “European hydrogen backbone”, according to European Commission President Ursula von der Leyen.

The UK has its own hydrogen backbone plan. A number of regional hydrogen pipelines will be connected to National Grid’s Project Union, which aims to establish a National Hydrogen Transmission System to link the UK’s industrial clusters with a dedicated supply of hydrogen. National Grid estimates it could repurpose about a quarter of the UK’s current natural gas transmission pipelines for hydrogen.

8) UK hydrogen hubs. The message is getting through to regional authorities in the UK that they all need a hydrogen strategy. Most major UK industrial centres now have plans for a hydrogen hub and many others do too. In early August a Hydrogen Ecosystem was unveiled by the GW4 Alliance of leading universities in the UK’s southwest and Western Gateway, a grouping of regional government and enterprise bodies focused on net zero delivery. Less than two weeks later, proposals for a 35 MW commercial hydrogen hub, located on industrial-zoned land in Barrow-in-Furness, UK were launched.

Meanwhile energy giant Centrica and Ryze Hydrogen announced they will jointly build and operate hydrogen production facilities in the UK aimed at providing a reliable supply of hydrogen for industry and transportation.

Also in August, the UK government revealed the 20 shortlisted projects from Hynet and East Coast Cluster that were chosen for funding last year. These projects join half a dozen others that have been unveiled over the past year, including the Port of Shoreham in West Sussex, Portsmouth International Port, and Hydrogen East, based around Bacton on the Norfolk coast. Eventually, all these hubs will be joined to each other through the National Grid’s National Hydrogen Transmission System and users whether industrial, transport or energy, won’t need to think so hard where to get access to H2.

9) Hydrogen trains. A lot has happened in the hydrogen transport space in 2022, including Wrightbus fuel-cell buses completing 1.5 million miles since entering service, preventing 2,366 tonnes of planet-warming carbon dioxide being released into the atmosphere. Just this month, JCB showed that it‘s possible to run, not just plant machinery but trucks with hydrogen combustion engines.

In December 2022 JCB have showed that it‘s possible to run, not just plant machinery but trucks with hydrogen combustion engines.

Hydrogen-fuelled trucks are advancing by leaps and bounds with Hyundai signing a deal with the German government and seven companies to deliver 27 of its XCIENT Fuel Cell trucks. In August, Amazon put clean hydrogen on the front pages with an agreement to buy nearly 11,000 tons of green hydrogen a year from Plug Power from 2025 to fuel forklifts and heavy-duty trucks.

However, the biggest development this year has to be the world’s first fleet of hydrogen-powered passenger trains, which went into service outside Hamburg in August. Germany will have 14 zero-emission hydrogen trains running by early 2023, each of which is capable of running the entire day on a single tank. Each train will save more than 422,000 gallons of diesel fuel annually, preventing more than 4,000 tons of CO2 emissions being released each year, according to estimates from the manufacturer, Alstom.

Germany will have 14 zero-emission hydrogen trains running by early 2023, each of which is capable of running the entire day on a single tank. Each train will save more than 422,000 gallons of diesel fuel annually.

10) Green steel. There have also been a plethora of developments in the industrial use of clean hydrogen this year. The UK was home to a major milestone in the decarbonisation of the industrial economy in July after British company Tarmac led a project to produce industrial lime with clean hydrogen. Kleenex and Andrex maker Kimberly-Clark said it will buy green hydrogen from Carlton Power for its factory in Barrow-in-Furness in Cumbria, and Scotland’s Arbikie Distillery has been awarded planning permission for a 1MW wind turbine to make green hydrogen to fuel its operations.

The prize for the most significant industrial hydrogen development of 2022 goes to SSAB, which has supplied green steel made with hydrogen to companies including Volvo Group and Faurecia for use in their products. Volvo Groupbuilt a load carrier for use in mining and quarrying produced entirely with fossil-free steel, while SSAB research showed hydrogen-reduced iron, a major input in the steel-making process, has superior properties to traditionally produced iron, and almost completely eliminates CO2 emissions in the process.

With such advancements across the globe the stage is set for continued rapid growth of the hydrogen sector in 2023.

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