Can Clean Hydrogen Fuel a Clean Energy Future?

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As pressure to find alternatives to climate-harming fossil fuels increase, hydrogen is emerging as a potential source to decarbonize everything from electricity production to transportation.

Advancement in technologies that make it possible to produce hydrogen with zero or little greenhouse gas emissions is fueling much of its popularity, along with help from some hefty U.S. government subsidies and investments. The U.S. Department of Energy (DOE) also recently set national goals to increase annual “clean hydrogen” production from nearly zero to 10 million metric tons by 2030; and to 50 million metric tons by 2050.

Clean hydrogen simply means the processes and methods used to produce hydrogen emit zero or nominal fossil fuel or greenhouse gas emissions. But what exactly are those methods?  Is clean hydrogen a viable and realistic alternative to fossil fuels? And how safe is it?

Here, we answer these and other key questions.

What Is Hydrogen Fuel?

Hydrogen is the most abundant element in the universe, present in water and nearly all living things, like plants and animals. It is a source of energy and can be used as fuel or raw material (also known as feedstock) in several applications including transportation, like fuel-cell electric vehicles, and industrial processes, like making fertilizer. It does not inherently emit greenhouse gases — its most common by-products are water vapor and heat when used as a fuel. Compared to other fuels, hydrogen contains the most amount of energy by weight — around three times that of gasoline. Energy from a kilogram of hydrogen is nearly equivalent to energy from a gallon of gasoline.

Hydrogen production can, however, emit significant greenhouse gases depending on how it’s made.

Currently, 95% of hydrogen is made from fossil fuels, typically via a process known as steam methane reforming (SMR), in which water is heated at high temperatures to produce steam that reacts with natural gas and produces hydrogen and carbon dioxide (CO2). This process emits significant greenhouse gases — 10 kilograms of CO2 equivalent per kilogram of hydrogen (kg CO2e/kg H2) to 14 kg CO2e/kg H2 — an amount similar to the carbon emissions from producing and burning a gallon of gasoline. Fossil-based hydrogen can also be produced from coal gasification, which has even higher emissions.

What Is Clean Hydrogen and How Is it Made?

Unlike traditional hydrogen fuel, clean hydrogen is made with nominal, or ideally no, greenhouse gas emissions. It is drawing much attention because of its promising role in decarbonization.

Several methods already exist to produce clean hydrogen, including:

• Natural gas with carbon capture and storage (blue hydrogen): This method of producing hydrogen processes natural gas using traditional SMR with carbon capture and storage (CCS) to permanently sequester the resulting CO2. This is the easiest pathway to clean hydrogen production because it builds on the existing method of production.
• Electrolysis (green hydrogen): Electrolytic hydrogen is produced from water molecules split with energy generated from renewable electricity. If done right, this can be a carbon-free system since the energy input comes from wind, solar or other zero-emissions electricity sources, and the only byproduct is oxygen.
• Biomass gasification with carbon capture and storage (turquoise hydrogen): Biomass, including plants and waste, is heated without combustion to produce a mixture of hydrogen, carbon monoxide and carbon dioxide. CCS sequesters the resultant carbon dioxide underground. Because the CO2 originated from plants, the whole system can have negative emissions if the biomass source is sustainable (such as using waste) to avoid deforestation and land conversion.
• Geologic (white/natural hydrogen): This direct source of hydrogen comes from the Earth’s subsurface and may be continuously generated. It can be extracted through techniques like what’s used for oil and gas. Previously thought to exist in very limited quantities, recent exploration and understanding suggest there may actually be trillions of tons.
• Nuclear (pink hydrogen): Nuclear hydrogen can be generated in the same way as electrolytic hydrogen but powered by nuclear energy instead of wind or solar. This pathway can also use high temperature nuclear heat directly to split water molecules into hydrogen and oxygen.

Each of these pathways is, at first blush, cleaner than hydrogen conventionally produced from fossil fuels. Yet the circumstances around how they are implemented matter greatly. Electrolytic hydrogen connected to the electricity grid and produced without ample safeguards, for example, can induce more emissions than fossil-based hydrogen if it is not produced using the “three pillars” of cleanliness, which means new sources of clean energy (the first pillar) are produced within the same region (the second pillar) and the same hour (the third pillar).

The greater context is important as well. While natural gas using SMR coupled with CCS can reduce existing production’s carbon intensity and work with current infrastructure, it will be important to implement other types of clean hydrogen to fully wean the economy from fossil-based energy sources.

Can Hydrogen Truly Be Clean?

 The carbon intensity of the production process determines whether hydrogen is “clean.” In theory, avoiding production emissions should be straightforward: clean electricity-based methods won’t produce CO2 or fossil-based methods are coupled with CCS to avoid most carbon emissions. In practice, there are complicated factors.

Electrolysis powered directly and only by clean energy sources (such as renewables or nuclear) will not induce any emissions because it only operates when zero-carbon electricity is being generated. An electrolyzer plugged in to the wider electricity grid, however, runs the risk of using electricity generated by fossil fuels, resulting in emissions. This is why the U.S. Department of the Treasury has proposed (but not yet finalized) tax credit rules requiring grid-connected electrolysis to verify that the clean energy it uses does not take energy from an existing user and follows the three pillars. Not doing so risks creating even more emissions than conventional SMR.

As for SMR, capturing 90% of emissions for storage is necessary, but not assured. The system must capture both the carbon stripped from natural gas during the reforming process as well as the carbon from burning natural gas to heat the process. Additionally, using carbon capture technology requires electricity which can add to emissions. A review of lifecycle intensities found that the carbon emissions intensities of using SMR with CCS for hydrogen production range from about 1 kg CO2e/kg H2 to 8 kg CO2e/kg H2, depending on a capture rate between 96% and 52%. For comparison, typical carbon emissions from fossil-based hydrogen production are estimated at 9 kg CO2e/kg H2.

Some of those studies may not account for methane leakage from venting, equipment and pipelines, which can be a significant contributor to the carbon-intensity of natural gas processes. Methane presents a significant near-term climate warming risk, with more than 80 times the warming potential of carbon dioxide over a 20-year timeframe. Annual upstream methane leakage in the United States is highly variable — estimated at 1.5% but possibly up to 9% in some fields.  

These details are crucial in determining exactly how clean a production pathway is. Factors like leakage, capture rates, when and where renewable electricity is sourced for energy are all germane to the ultimate emissions from clean hydrogen production. For example, DOE estimates that SMR with CCS would require a 95% capture rate, average U.S. grid emissions and a 1% methane leakage rate to achieve DOE’s highest allowable emissions rate to be considered as clean hydrogen (4kgCO2e). But if done properly, the benefits are clear: Producing all the hydrogen needed by 2050 (528 million metric tons globally) through clean electrolysis versus the traditional method, for example, would save 1.2 gigatons of CO2 per year, the equivalent carbon emissions from 285 million gasoline-powered cars driven in a year (equal to just over all the cars registered in the United States). So, it is important to get the details right, with the right guardrails.

Is Hydrogen Safe?

Once produced, hydrogen needs to be transported — either in gaseous or liquid form —to where it’ll be used, such as at an industrial plant or fueling station, and then stored.  In its liquid form, hydrogen needs ultra-cold systems because its boiling point is -423 degrees F, requiring cryogenic liquid tanker trucks for transportation and insulated tanks for storage. At ambient temperatures in its gaseous form, hydrogen is extremely lightweight and can be transported in pipelines and stored in high pressure tanks.

Theoretically, hydrogen is safer to handle and use compared to other fuels produced from natural gas, gasoline and diesel. It also does not contain carcinogens, requires a lot of oxygen to explode and does not burn as hot as typical fossil fuels. However, if it does ignite, its colorless and odorless properties produce invisible flames, creating certain safety challenges that will need to be solved for scaled use, particularly its transport and storage.

Hydrogen is lighter than air, and while it disperses rapidly if leaked, it reacts in the atmosphere in ways that increase the concentration of greenhouse gases like methane or ozone, increasing their warming impact. Preventing leaks is therefore critical and special equipment and processes like robust leakage monitoring, flame detection systems and good ventilation can help. Hydrogen also poses an added risk to natural gas pipelines during transport because it makes metals like steel brittle and prone to failure.

Producing hydrogen near facilities that use it is one solution to minimize risks. Adhering to existing codes and safety standards developed by scientists who have used hydrogen for decades to make chemicals, rocket fuel, and refine petroleum will also be necessary. And a robust regulatory framework focusing on safety will need to be developed and implemented at the same time as we ramp up clean hydrogen production, while research on safety and monitoring must continue.

Is Clean Hydrogen in the US Economically Viable?

While current costs associated with electrolyzers and carbon capture technology make hydrogen more expensive than conventionally produced, fossil-fuel based methods, public and private sector dollars can help the clean hydrogen industry get off the ground, leading to lower prices as the industry scales up.

The United States has made significant investments to build a market for clean hydrogen, with the DOE setting an overarching goal to reduce the cost of clean hydrogen by 80%, to $1 per kilogram in a decade’s time. Congress passed the Bipartisan Infrastructure Law and Inflation Reduction Act to advance those goals, providing substantial subsidies for hydrogen development. The law created the $8 billion Regional Clean Hydrogen Hubs (H2Hubs) Program, $1 billion Clean Hydrogen Electrolysis Program and allocated $500 million to Clean Hydrogen Manufacturing and Recycling RD&D. The H2Hubs program also reserves $1 billion in support for clean hydrogen offtakers — or users — in efforts to drive market certainty.  

But it is the Inflation Reduction Act’s generous 45V tax credit that creates the strongest incentive for clean hydrogen production. It provides tiers of tax credits to clean hydrogen producers — up to $3 per kilogram to those producing hydrogen with the fewest emissions. This tax credit far exceeds the very successful renewable energy tax credits that spurred that market in previous decades, providing around three times the value of those renewable energy tax credits on a dollars per kilowatt hour basis (inflation adjusted). 

The U.S. government’s heavy investment in clean hydrogen aims to stimulate early production and demand, with hopes to soon unlock investment from the private sector. Federal investments can also guide how states integrate clean hydrogen in their path to net-zero emissions. California, for example, is well placed to lead on electrolytic and waste biomass hydrogen production given its natural resources and how it approaches regulation at the state level and can take cues from what's happening at the federal level. And while the influx of public dollars is key to launching this burgeoning industry, it’s also critical that these investments guide the market toward the cleanest production and best uses.

For private investors, the uncertainties of an early industry may make it more challenging to commit dollars. But in areas where a transition to clean hydrogen is necessary for decarbonization, private investment is needed to support a system transition. For example, some chemical feedstocks and processes like fertilizer and petrochemical production are wholly reliant on hydrogen produced by SMR or coal gasification and have no easy alternatives, all while accounting for about 5% of global emissions. As these industries look to decarbonize and tackle emissions by exploring cleaner hydrogen pathways, private investment can help.

Where Does Clean Hydrogen Make the Most Sense?

Clean hydrogen has the potential to substantially reduce emissions, but there are instances where it’s better used over others.

Industries already reliant on fossil-based hydrogen fuel immediately win when switching to cleaner methods of hydrogen production. Petroleum refining and fertilizer production, for example, consume over 90% of the hydrogen fuel produced today — and using electrolytic hydrogen for fertilizer production, for example, could decrease greenhouse gas emissions by up to 30 million metric tons of CO2 equivalent in the U.S. alone, according to a WRI analysis of data from the Environmental Protection Agency and the Department of Energy. This is equivalent to the amount of carbon emissions from annual electricity use in nearly 6 million homes.

Several other hard-to-abate, heavy industries are promising candidates as well — these are arenas where other technologies may not be economical or available to support decarbonization in these sectors. These include steel, freight, long-distance shipping and long-term energy storage — industries where, for example, hydrogen can serve as an input or can be stored as an energy source.

On the flip side, other arenas make less sense for hydrogen use, since utilizing alternative sources of energy when available is often simpler, more affordable, safer and/or more convenient. An easy example is cars — electrifying cars versus running them on hydrogen fuels is cleaner and more efficient; the technology is more mature; and current policy supports increased production, infrastructure buildout and consumer adoption. Other cases, like blending hydrogen with natural gas for power generation, as many announced projects seek to do, reduce emissions by 10% in best case scenarios but increase emissions by 70% in worst case scenarios. These are instances where hydrogen is not the best solution.

How Can Clean Hydrogen Be Viable for Widespread Use?

Clean hydrogen holds great promise for replacing fossil fuels in many sectors. While it should not be looked to as a universal energy solution because there are cheaper, more efficient ways to decarbonize many applications, prioritizing its use in key emissions-intensive sectors like petrochemicals and fertilizers can help reduce emissions.

Despite significant U.S. government commitments to build out clean hydrogen production, however, more work is needed to scale the industry. More attention should be dedicated towards bolstering demand for clean hydrogen. Hubs — regions that host clean hydrogen producers and offtakers in close proximity — require more help in connecting supply with the demand. For end users that are not near a hub, nascent transport infrastructure will need to be built — the pipelines, barge, rail or trucking infrastructure that can support the movement of the hydrogen safely and without leaking. More research is also needed: Geologic hydrogen has incredible potential as a clean hydrogen source that can be directly harvested from the Earth, but there remain many unknowns. Additionally, more policy development that ensures hydrogen is truly clean is also critical, at both the state and federal level.

Importantly, what happens today will set the standards for the future. Now is a critical time to prioritize both the cleanest production and the best use cases.