Hydrogen as an energy carrier has had a remarkable trajectory. In just a few years it has gone from being an outlier (the Hindenburg disaster created quite the lasting image problem) to becoming widely considered as essential to the energy transition.
This year the International Energy Agency (IEA) named hydrogen electrolysers as one of the three main innovation opportunities in reaching net zero emissions by 2050[1]. The Tasmanian and federal governments both back hydrogen as a major future technology, each releasing hydrogen strategies to rapidly develop production, an export market and domestic demand.
Hydrogen is seen as a silver bullet particularly for heavy transport, which today accounts for up to 30% of global CO2 emissions. Known as a ‘hard-to-abate’ sector, diesel powered heavy vehicles such as buses and long-haul trucks could be replaced with fuel cell electric vehicle (FCEV) technology.
Despite the buzz, there’s still a long way to go to realise hydrogen’s potential as a fuel and reach commercial scale. While some markets are more advanced than others, there’s a need for infrastructure, investment, cost-reductions, and regulations to match global hydrogen ambitions, [1] alongside advanced batteries and direct air capture and storage.
How does hydrogen-fuelled transportation work?
Hydrogen is a tricky one to categorise. It’s the most abundant chemical substance in the universe. Hydrogen is not technically a fuel, although it can be used as one. Just like electricity, it carries energy and can be used to charge fuel cell batteries. Just like a fossil fuel, it can be stored for long periods of time, it is easily moved through tanks and pipelines, it produces heat when ignited – and of course, can be explosive.
Industrially produced hydrogen takes three forms (green and blue are both considered low carbon):
Green: Produced by water electrolysis using renewable electricity. This is currently considered too expensive to produce at scale, but developing technology is expected to dramatically cut costs in the coming years.
Blue: Made from natural gases such as methane, with up to 60% of Co2 emissions trapped using carbon capture and storage (CCS) technology. Blue hydrogen has the potential to help scale up the industry, dependent on significant advancements in CCS.
Grey: Also largely produced from natural gas (brown hydrogen is produced from the gasification of coal). This is the predominate form of hydrogen produced currently as it is relatively cheap, but emits significant amounts of CO2.
Hydrogen is stored and can be transported under compression as a gas, liquefied by pressurising and cooling hydrogen to -253˚C, or chemically by forming it into stable molecules such as ammonia.
Hydrogen can be used in all forms of transport. In the passenger and heavy vehicle markets it’s used in fuel cell electric vehicles. These are refuelled by pumping pure hydrogen gas directly into a vehicle’s fuel tank. The use of hydrogen-based synthetic fuels are currently being explored in aviation and shipping which could have an enormous effect on making the transportation industry more sustainable.
The advantages of hydrogen in transportation
Emission free: The only by-product of hydrogen combustion is water vapor, making it an ideal choice for meeting zero emission and air quality targets.
Long-range capabilities: Hydrogen FCEVs have the edge over battery electric cars, as they can travel up to around 600kms without needing to refuel. The refuel time is also shorter.
Heavy-duty transport: Heavy haulage trucks, large fleets, construction equipment, commercial buses and return-to-base fleets are better suited to hydrogen fuel cell technology, due to their energy intensity and flexibility around size and number of tanks.
The disadvantages of hydrogen in transportation
Safety. Just as with any potentially dangerous substances (like the hydrocarbons that power transportation today), safety standards are needed for each hydrogen use case. These standards are often higher in emerging technologies while they gain social acceptance.
Currently costly. Green hydrogen currently costs around $4.00/kg. It is widely considered that for green hydrogen to be an economically viable replacement for traditional fossil fuels, the price of green hydrogen needs to come down to around $2.00/kg. It is expected that around the year 2030, due to advancements in hydrogen technology, it will cost the same amount to operate a hydrogen powered dump truck as it is to operate a diesel internal combustion dump truck.
Difficult to store. While up to four times more energy dense than some fossil fuels, hydrogen takes up much more volume, thus requires larger fuel tanks and becomes more difficult to store and use in larger quantities.
Status of hydrogen in transportation
Even in its still maturing state, the global hydrogen market is tipped to reach US $155 billion by 2022. Resource-constrained Japan is a frontrunner with policy commitments in place to import and use hydrogen. Other heavy transport early-adopters include New Zealand, Korea, China, and parts of the US and Europe.
Australia has recognised the demand for hydrogen from many of its trading partners, and that its extensive available land and energy resources – both renewable and fossil fuels – position it well to establish hydrogen export supply chains. To this end the National Hydrogen Strategy was released in late 2019, and hydrogen was a prominent topic in Australia’s recent tech-focused COP26 campaign.
In terms of vehicle types, viable hydrogen technology already exists for passenger cars and transport like buses and trains, aviation, return-to-base vehicles, short-range shipping and heavy goods vehicles. Two models of hydrogen cars are available commercially: the Toyota Mirai and Hyundai Nexo. Hyundai Hydrogen Mobility is a joint venture leasing fuel cell trucks to commercial operators in Switzerland, which has high carbon taxes. Volvo and Daimler Truck are also working together on hydrogen technology. JCB has also released a hydrogen excavator.
While still in a developing state, the IEA projects a massive hydrogen industry expansion. In 2020 global demand was around 90 million tonnes; by 2050 demand is expected to increase to 530 Mt, with 50% used by heavy industry and transport, and around 30% being converted into other hydrogen-based fuels. The first large-scale green electrolysers are expected to enter the market by 2025. As manufacturers scale up production and develop more efficient fuel cells, costs should fall dramatically.
How will Australia’s hydrogen industry develop?
Australia’s hydrogen industry is likely to be dictated by overseas developments, and is expected to benefit greatly as pilot technology becomes standardized and reaches commercial scale. There’s an emerging trend for joint ventures between hydrogen refueling station operators and car manufacturers, ensuring supply and demand are matched. CSIRO anticipates refueling stations could already be commonplace in Australia by 2025, and there are already companies operating in this space.
Tasmania’s hydrogen focus is on production, with its competitive advantage over other states and countries will abundant fresh water, renewable energy and already established hydro infrastructure. The goal is to produce hydrogen for export from industrial precincts with deep-water ports such as Bell Bay or Burnie, while building up a local market. A complicating factor could be the availability of affordable electricity, developers like Andrew "Twiggy" Forrest are calling for power hydrogen electrolysis, versus Hydro Tasmania’s ‘battery of the nation’ plans to sell Tasmanian renewable energy to the mainland via the proposed Marinus link.
Flagged domestic uses in Tasmania include blending hydrogen with the natural gas network, carbon-neutral feedstock, FCEVs, marine applications such as passenger ferries, and remote power supply, for example to Bass Strait islands.
Barriers to hydrogen in transportation
The main factors putting the brakes on a hydrogen industry are market uncertainty and technology limitations.
The supply and demand picture is still very chicken and egg, with industry calling on governments to help create and build confidence in a hydrogen market. It’s difficult for producers to create supply with so few businesses using hydrogen today; but until hydrogen supply is consistent enough to ensure reliable stocks and lower prices, businesses won’t commit. When the policy framework exists to support a ‘market pull’, it’s expected investment in hydrogen production, infrastructure, storage and transport will follow. Vehicle uptake will also need to be stimulated by incentives or emissions taxes.
When it comes to industrial-scale low-carbon hydrogen production, the electrolyser and CCS technology needed to produce green and blue hydrogen are still relatively immature. This makes low-carbon hydrogen prohibitively expensive – for now. The rate of development to date has many hydrogen technologies tipped to reach price parity within the decade.
Infrastructure is another barrier. The transition to hydrogen differs from the shift to renewables: the world already runs on electricity, and grids and networks can be modified to accommodate green sources. While natural gas pipelines can be retro-fitted for hydrogen, massive amounts of new infrastructure will be needed to produce, store and distribute hydrogen quickly and cheaply enough for full-scaled adoption. The IEA estimates that annual investment in CO2 pipelines and other hydrogen infrastructure will go from US $1 billion today to around $40 billion in just 10 years.
Planning for hydrogen
With the barriers to wide-scale uptake predicted to rapidly fall away in a few short years, hydrogen will go from a niche to no-brainer alternative fuel. The transition to EVs, FCEVs and blended low-carbon fuels will have a massive impact on carbon emissions: IEA projections estimate global transport CO2 emissions will drop to 0.7 Gt in 2050, down 90% on 2020 levels. This is despite a projected doubling of passenger travel, an increase in passenger cars from 1.2 billion to almost 2 billion, and a 2.5x increase in freight activity by 2050.
With so much momentum behind hydrogen and other energy transition technologies, businesses must start planning for their future fleets now. Ellis Richmond can help you baseline your emissions and develop your strategy for cleaner, more efficient, and ultimately more cost-effective operations.