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Driving the Green Hydrogen Revolution

Hydrogen has generated a lot of excitement lately as an increasingly important piece of the net zero transition puzzle. Many countries are developing hydrogen as a key energy carrier in alignment with their long-term sustainability plans. Japan for instance recently announced its ambitious goal to increase annual hydrogen supply to 20 million tonnes for achieving carbon neutrality by 2050.

But not all types of hydrogen are created equally. Only “green” hydrogen, produced with electricity from renewable sources, is compatible with sustainable, climate-safe energy use or net-zero emissions. Its uptake is especially important for sectors like aviation, international shipping, and heavy industry – where energy intensity is high, and emissions are hardest to abate.

Despite its strong potential, there are many challenges that need to be overcome to scale up the industrial production of green hydrogen. It is not ready to take off without widespread and coordinated support across the energy value chain. A collaborative, whole-of-society approach is required to ensure green hydrogen can become a viable source of clean energy in the future.

What is Green Hydrogen, and How Do We Get It?

Hydrogen is the most abundant element in the universe. You can’t see it or touch it, but it’s in everything you see and touch. Hydrogen is light, can be stored, and does not generate any pollutant emissions by itself. With these characteristics, it is a perfect candidate for clean fuel. Except we never find hydrogen alone in nature, but always in the company of other chemical elements like water or organic compounds.

Since the 16th century, humanity has been using hydrogen as a raw material in the chemical industry or metallurgy and as fuel – but because it cannot be taken directly from nature in its pure state, a chemical process is needed to “manufacture” it. The methods that we use to obtain hydrogen determine whether that hydrogen is a clean, renewable fuel or not.

Despite being a colourless gas, hydrogen today is labelled as a rainbow of colours based on its different methods of production. Hydrogen can be grey, blue, or green – and sometimes even pink, yellow, or turquoise. However, green hydrogen is the only type produced in a climate-neutral manner making it critical to reach net zero by 2050.

Grey hydrogen is traditionally produced from fossil fuels like methane, split with steam into CO2 – the main culprit for climate change – and H2, hydrogen. Grey hydrogen has also been increasingly produced from coal, with significantly higher CO2 emissions per unit of hydrogen produced, so much so that it is often called brown or black hydrogen instead of grey. It has no energy transition value, quite the opposite.

Blue hydrogen follows the same process as grey, but with additional technologies to capture the CO2 produced when hydrogen is split from methane (or from coal). In fact, technologies like methane pyrolysis enable high capture rates of up to 95% and effective long-term storage of CO2 in solid form, potentially so much better than blue that they deserve their own colour, turquoise hydrogen.

However, methane pyrolysis is still at a pilot stage, while green hydrogen is commercially available today based on two key technologies – renewable power and electrolysis. Green hydrogen is made by electrolysing water using clean electricity created from wind and solar power, causing a reaction that splits water into its components of hydrogen and oxygen.

Since it is obtained through the use of renewable energies, green hydrogen is the cleanest form of hydrogen with no carbon emissions being released in its production process. This makes it a sustainable fuel with a zero-pollution index. However, of the 70 million tonnes of hydrogen consumed by the world today, almost all of it is still produced from fossil fuels. Only 0.1% of the hydrogen we consume is green.

Current Barriers to Green Hydrogen Development

Green hydrogen has enjoyed a surge in global interest with more countries and companies looking for clean energy solutions to cut emissions. The market for green hydrogen is forecasted to grow from USD 676 million in 2022 to almost USD 7.3 billion by 2027 – a compound annual growth rate of 61%. Nonetheless, the challenge ahead is to convert this palpable enthusiasm into practical applications.

For a start, the electrolysers used to produce green hydrogen have typically only been used on a small scale. Power plants will need to be hooked up to potentially hundreds of electrolysers to produce the hundreds of gigawatts (GW) of energy needed to power society in the future. There remain uncertainties whether this can be achieved effectively to result in the necessary economies of scale.

Green hydrogen is also more expensive to produce than grey hydrogen, and its proper implementation will require massive investments. About USD 300 billion will be needed globally for infrastructure and research over the next few years. Fortunately, the falling price of renewable energies has opened a new window of opportunity for its cost to become competitive.

There are huge financial opportunities to be unlocked by green hydrogen, especially when global demand is projected to reach 660 million tonnes by 2050. Governments and industries need to collaborate to ensure regulations don’t become unnecessary barriers to investment. At the same time, common global standards need to be developed for safely transporting and storing large volumes of hydrogen.

Delivering Low-Cost Green Hydrogen at Scale

The scale of the challenge is clear, yet the opportunity to deliver a carbon-neutral future is clearer still. Overcoming the obstacles to scaling green hydrogen production will require the support of many parties. Industry, governments, investors, and consumers must all work together to build an environment where innovation is encouraged, market demand is fostered, and collaboration is incentivised.

Since hydrogen is only renewable if the process used to extract it is also renewable, more coordinated efforts will be needed to increase installed renewable capacity. Malaysia will need about 10GW of new capacity to meet its electricity demand growth, and the government has announced plans to increase renewable capacity from the current 6GW to 14GW, or from 18% to 30% of the energy mix by 2030.

Global examples already exist for ramping up the production of green hydrogen using renewable energies. For instance, the Asian Renewable Energy Hub (AREH) planned in Western Australia will see the creation and operation of a 26GW wind and solar hybrid renewable power plant, with 3GW of generation capacity dedicated for energy users and the remaining 23GW of generation to produce green hydrogen.

Closer to home, two of Malaysia’s biggest energy companies, TNB and PETRONAS, signed a Memorandum of Understanding (MoU) last year to intensify efforts in co-creating a green hydrogen ecosystem to provide clean energy solutions for Malaysia and overseas markets. In its largest state, Sarawak, Project H2ornbill is scheduled to start operations sometime this year, capable of producing up to 10,000 tonnes of hydrogen per year by 2025. Meanwhile, the Ministry of International Trade and Industry (MITI) is currently developing a national roadmap and strategy for the hydrogen economy.

Powering a Clean Energy Future

To drive the green hydrogen revolution forward, Malaysia needs a cost-effective demand-side market. The government and industry should work together to build demand and increase market size for green hydrogen, which in turn will lead to lower costs of equipment, infrastructure, operating costs, and overall financing for innovative green hydrogen technologies.

To drive the green hydrogen revolution forward, Malaysia needs a cost-effective demand-side market

Once technology catches up to the promises of green hydrogen, a decarbonised promised land awaits. Along the way, we must embrace an arduous process of trial and error, but as Albert Einstein observed, “you can’t solve a problem on the same level it was created, you have to rise above it to the next level”. This is the hopeful trajectory that Malaysia finds itself today with regards to green hydrogen.

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