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Hydrogen

Characteristics

Hydrogen is the most common and lightweight element, with high energy weight density, and is a “clean” energy CARRIER in its utilization phase; it is thus considered a key element for de-carbonization and energy transition.

Nevertheless, it needs to be extracted and is not, by itself, an energy SOURCE, and to be really “Green” it needs to be produced through a sustainable process such as water electrolysis powered by renewable energy sources.

Uses

While it is currently mainly used in chemical and iron/steel industries, it has a relevant potential also in heavy transportation, heating, and electricity (“Gas-to-Power”) centralized and local applications.

Political scenario

The ever-growing international political attention and policies/targets on decarbonization and towards climate neutrality (“Net Zero”) opens the door to a non-linear growth in use and need of sustainable hydrogen.

In addition to 2030 Agenda and its Sustainable Development Goals (SDGs) and Paris Agreement (COP21) temperature rise target, the United Nations launched specific initiatives to foster the Hydrogen Economy.

Political instability and conflicts further increase the need to urgently develop sustainable alternatives to traditional energy sources.

Europe has been leading the path in terms of clear directives, ambitious targets and relevant funding for energy transition, prioritizing Hydrogen in its Green Deal and Next Generation EU programs, promoting both investments and R&D on production as well demand growth with a clear roadmap.

Individual countries are aligning their national strategies, also leveraging National Plans for Recovery and Resilience.

Economic scenario

The increasing economic pressure on climate-altering emissions and the availability of public and private funding for ecological transition foster de-carbonization, and the recent fossil fuels prices increase accelerated H2 competitiveness.

While current worldwide fast-growing demand for Hydrogen is still around 120 Mt/year, it is forecasted have a +400% by 2050, reaching 20% in the primary energy mix, driven by existing productions conversion to “green” Hydrogen and new applications; the electrolysers’ market will exceed 50 B$ by 2030 and the overall economic sector is expected to worth at least 1,000 B$ in 2040.

The supply will be strongly regionalized, based on local renewable energy sources potentials as well as existing infrastructures, with a progressive scale-up of production sites (> 500 MW); fostered by the currently needed public funding, the consequent scale economies and further R&D for increasing electrolysis efficiency will soon make “green” hydrogen fully competitive. This non-linear growth will produce vast economic and employment effects on the very articulated supply chain.

Social scenario

The growing and widespread environmental awareness and sensitivity will foster the rapid adoption of “green” Hydrogen.

The availability of distinctive competences and skills along its value chain in countries such as Italy represents a relevant potential for competitiveness and growth.

The need and push for innovation will also further foster scientific and technical training and professional development, and the overall market growth will generate major quality jobs opportunities.

Technological scenario

While current Hydrogen production is almost entirely based on fossil sources and, thus, heavily impacts climate, “green” Hydrogen is and will be mainly produced through water electrolysis powered by renewable energy sources, such as wind and solar.

Different technological families exist and are under development for electrolysis: among them, the currently more promising and mature for the needed fast and large-scale deployment is the alkaline.

Technological development is also encompassing transport and storage phases, as well as existing and new applications.

Environmental scenario

As 91% of World’s population lives in urban areas, where the air quality is often far below critical thresholds set by the World Health Organization and poisonous urban emissions from diesel engines and fossil fuels powered power plants cause 4.2 million deaths per year, there is a strong need and urgency to adopt clean technologies, also to drastically reduce the currently huge greenhouse gases emissions.

Legal/Regulatory scenario

At EU level the policy and regulatory framework is based on the principles of sustainability, setting a total life-cycle emissions for Hydrogen production below 3 tCO_2eq/tH₂ and renewability, requiring a minimum 70% of climate-altering emissions savings as well as the additionality of renewable sources with respect to usual direct uses, and simultaneity between renewable electricity and hydrogen production, to a guarantee electrical system balancing.

Based on these, the EU is defining emissive thresholds and related incentives, certification procedures and “market-based” support to investments and energetic services, as well as revising relevant legislation and standards on the infrastructure and sectoral uses.