Hydrogen - the 'no-lose bet' for fossil-fuel industry?

"I'm looking forward to doing that because, as many of you know, I am a great believer in the potential of hydrogen to help us decarbonise our economy."

The matter at hand was the first European Hydrogen Week, meant to broadcast the commission's ambition to make the energy source a "cornerstone of EU climate policy."

Future investment plans with Bill Gates were teased. An €8.5bn collaboration with South Africa and the United States was also on the menu.

Its aim? To help set up Europe's "neighbourhood" with hydrogen capacity for export to the EU.

US climate envoy John Kerry said he "could not name a country that hasn't expressed excitement about hydrogen."

Not mentioned were the costs: to ship liquified hydrogen to the EU would be five-to-seven times more expensive than liquified natural gas (LNG).

Since then more and more scientists and industry experts have sounded the alarm, warning that hydrogen is too inefficient to replace natural gas as a source of heating and energy.

Despite this, the EU has now decided to give hydrogen a central role in its ambitious labelling system (aka 'taxonomy') for green investments, which the commission will present on Friday (21 January).

According to a draft version of the document (controversially only published on New Year's Eve) nuclear energy and natural gas will be considered green investments.

However, for natural gas to be labelled green, producers must blend in 30 percent low-carbon gases like hydrogen, biomethane, or biogas after 2026.

This must be increased to 55 percent in 2030 and wholly switch to renewable or low-carbon gases by 31 December 2035.

To achieve these targets the production of hydrogen will need to be increased exponentially because there is not enough biofuel to replace natural gas.

There are, however, doubts this can be achieved.

Grey, blue, and green - explained

Hydrogen is a chemical that is used to make ammonia, desulphurise fossil fuels and treat iron ore to produce steel. It is not used as fuel, and is not produced at the scales the taxonomy is implying.

And it becomes even more complex because hydrogen itself is not created equally.

According to the EU definition, a low-carbon gas should produce at least 70 percent less greenhouse gas emissions than natural gas across its lifecycle. But the production process of most types of hydrogen exceeds this limit - by a huge factor.

The industry gives different colours to hydrogen depending on the production process.

The most important are grey, blue and green, but more types exist.

Grey hydrogen is made from fossil fuels - using the steam methane reforming process (SRM) - and represents 96 percent of all global hydrogen production.

When burned for heat or energy, the climate impact is comparable to the burning of gasoline.

Blue hydrogen uses the same process but filters part of the emissions using so-called carbon capture technology (CCUS).

In theory, this reduces emissions but carbon capture technology - and hence 'blue' hydrogen - does not actually exist commercially outside of some government-funded projects.

And the blue hydrogen projects that do exist still emit 20 percent more CO2 than natural gas due to unsolved methane leakage in the supply chain, a recent Cornell study found.

That leaves green hydrogen. Instead of using natural gas, green hydrogen is produced using 100 percent wind or solar.

To achieve the EU definition of a low-carbon gas, most hydrogen blended into the natural gas mix will have to be green.

German economy and climate minister Robert Habeck on Tuesday said Europe's biggest economy will only invest in green hydrogen and has earmarked €8bn - a fifth of its climate-related pandemic stimulus money - for 62 large-scale hydrogen projects.

But a fact rarely mentioned is that green hydrogen as a functioning technology barely exists.

Due to its high cost, the International Energy Agency estimates only around 0.03 percent of all hydrogen produced globally currently uses renewables.

'Complete fantasy'

"Many people who support green hydrogen as a source of heating or fuel truly believe in it, but I'm an engineer, and the numbers simply don't add up," Paul Martin told EUobserver.

Martin is a senior chemical technology expert and a designer of chemical plants who has worked in sustainable energy for 30 years.

He is also an active member of the Hydrogen Science Coalition (HSC).

HSC is a group of scientists co-founded by Martin that brings an "evidence-based viewpoint to the political discussion on hydrogen."

According to them, blending expensive green hydrogen in with natural gas for general heating is "wrong-headed."

"To scale-up up the production of green hydrogen to use as a source of energy and heating for millions of Europeans is way too costly," Martin said.

Martin emphasizes that replacing hydrogen produced with fossil fuels with green hydrogen in the manufacturing process of ammonia for fertilisers is a good thing, because it allows us to "keep eating post-fossil [fuels]."

But decarbonising the hydrogen cycle just for chemical use in the production of steel and ammonia would need 4500 terawatt-hours - more than twice the amount of wind and solar energy the world produced in 2019. To use it as a source of heating or an energy source for millions of people is a "complete fantasy," he said.

Compared to electrified heating pumps, hydrogen uses six times more energy to produce the same amount of heat.

To provide a fleet of fuel cell cars with green hydrogen, three times as many wind turbines would need to be built compared to an electric fleet.

A powerplant using 100 percent renewable hydrogen consumes 2.8 times the energy it produces.

This inefficiency makes green hydrogen expensive.

Depending on its use, green hydrogen is about six-to-seven times more expensive than natural gas, with blue hydrogen currently not far behind.

The French city of Montpellier recently had to send back 52 unused EU-funded buses because operating costs - using the cheaper grey hydrogen - are six times more expensive than electrified alternatives that are already produced at scale.

The International Renewable Energy Agency published a report on Tuesday projecting cost for green hydrogen will undercut blue hydrogen by 2030.

But a recent study conducted by researchers at the Imperial College London found competitive green hydrogen supplies will not become available before 2050-2060.

"It's tempting to believe that hydrogen represents the future of domestic heating. But this idea is out of touch with the reality we're faced with," Mauro Anastasio, a communications officer for European Environmental Bureau, recently said.

Still, governments might be persuaded to sink billions into the technology, Martin warned.

Big Oil's last grand scam?

"I am very, very worried that hydrogen will distract us from more efficient solutions to decarbonise our economy," Martin said.

In an article Hydrogen is Big Oil's Last Grand Scam co-authored by Martin, he describes how the European Union and other governments have been persuaded to use green funds to extend the life of methane assets.

"Hydrogen is presented as an attractive option because then we can use existing infrastructure," he explains - an argument he describes as the "sunk-cost fallacy."

One such project is Shell Quest, a blue hydrogen pilot project in Canada.

On its website Shell writes that the project shows an "effective approach to reducing carbon emissions from industrial sources. "

But Martin points out that the $1.3bn Canadian dollars [€920m] project is "100-percent paid for" by local, regional and national governments.

"If it really were such a great idea, the fossil-fuel industry would invest in hydrogen technology itself, but it hardly does because they know they will lose money," Martin said

Fossil-fuel companies say blue hydrogen can later be switched to green hydrogen.

But retrofitted natural gas infrastructure and blue hydrogen plants built in the 2020s "will almost certainly continue to operate for decades" to earn back the money already invested.

"Once you've invested in blue hydrogen, you are invested in it for 30 years," co-founder of HSC Tom Baxter recently stated.

The reason fossil fuel companies are still getting governments to commit to hydrogen is because it is a "no-lose bet. "

"Governments will either invest in hydrogen instead of electrification, which is good for the fossil fuel industry because it delays decarbonisation, or they will get pulled into the future by gargantuan amounts of government money," Martin said.

Hydrogen - asthma and explosions-risk

"Hydrogen as heating or energy source at home really makes no sense. Most appliances can be easily electrified, which is way more efficient," Martin said.

Far from being an easy fit, gas transmission systems will need a thorough overhaul to allow for hydrogen. Even residential stoves and water heaters will need to be replaced with hydrogen appliances that do not exist on the market today.

And according to a safety assessment conducted on behalf of the UK government, the risk of explosions in homes will increase four times compared with natural gas.

More nitrous oxide will be released into homes because blending in hydrogen will increase flame temperatures, causing asthma.

Electrification does have its own challenges.

Significant investments need to be made to upgrade the electrical grid.

But according to Martin, "the expansion needs of the electric grid in 1950 to 1970 is comparable to the task that faces us today."

"We just have to repeat it, with the added motivation that we will combat global warming while doing it."