6. Benefits

This chapter discusses how widespread uptake of green hydrogen can help with mitigating climate change and protect the environment, as well as its potential role as a catalyst for economic growth and job creation.

Overview

Green hydrogen can contribute positively to several important areas of concern, including climate change amelioration, environmental protection, health and well-being, economic growth and job creation, energy autonomy, decentralization of infrastructure, mobility, and many more. Investing in its growth plays an important part in further improving and developing all these areas and contributes to achieving the UN’s Sustainable Development Goals (SDGs).  

Climate Change

The Paris Agreement, ratified by 190 countries, aims to hold global temperature rise to well below 2°C above the pre-industrial level.  

The last time the global average temperature was 2°C higher, the sea level was more than six meters higher than that of today. Global warming caused by human actions happens at great speed, so there is not nearly enough time to adapt. Rising temperatures will impact weather phenomena, food production, the availability of water, the spread of disease, the migration (and extinction) of species, economies, and living conditions everywhere.  

The Intergovernmental Panel on Climate Change (IPCC) has created several scenarios for CO₂ emission development, called Representative Concentration Pathways (RCPs). Among these scenarios, RCP2.6 is the only one in which all Paris Agreement goals are reached. It required that CO₂ emissions start declining by 2020 and reach zero by 2100. It also required that methane emissions (CH₄) are limited to approximately half 2020 levels, and that sulphur dioxide (SO₂) emissions are reduced to approximately 10 percent of those of 1980–1990. RCP2.6 also requires negative CO₂ emissions (such as CO₂ absorption by trees through reforestation).  

In a green hydrogen economy, renewable energy and green hydrogen would be used in place of the fossil fuels that currently provide four-fifths of the world’s energy supply and emit the bulk of global greenhouse gas emissions.

The hydrogen economy should be all-encompassing, but even in the short term, it could fill a series of important niches, depending on the availability, cost, and performance of hydrogen relative to alternatives, for each potential application.

There is thus potential for hydrogen to play an important role in reaching net-zero emissions, requiring a dramatic scaling up of its production and use. Hydrogen could be especially helpful in decarbonizing critical hard-to-abate sectors, such as steelmaking and long-distance transport, both big contributors to climate change. Decarbonizing the built environment is another high priority if we are to get anywhere near RCP2.6 and achieve carbon neutrality.

Environmental protection, health, and well-being

By using hydrogen in the transport sector, the impact of particulate and noxious emissions build-up in inner-city areas on the health and safety of residents and commuters can be significantly reduced. Air pollution is now the biggest environmental risk factor for early death, causing up to five million deaths each year from heart attacks, strokes, diabetes, and respiratory diseases. Children, the elderly, people with existing diseases, and minority and low-income communities are particularly vulnerable, and suffer economic detriment through missed work and healthcare costs.

Recent studies show air pollution can also impact mental health, productivity, and even stock markets. Any reduction in air pollution through the widespread use of green hydrogen is therefore eminently desirable. Hydrogen can successfully supplant many of the fossil fuels and other dirty energy sources, having no toxic emissions itself.

The use of green hydrogen also avoids the need to mine or drill for fossil fuels, and the massive destruction to ecosystems that such activities cause. Avoiding oil spills and open cast coal mining would already be of great benefit to the environment. An additional environmental benefit of green hydrogen over battery-powered electric vehicles is the avoidance of the use of toxic chemicals and metals as found in the batteries themselves. If batteries are not properly recycled, they can significantly damage the environment.

A recent United Nations Conference on Trade and Development (UNCTAD) report indicated that the expected boom in mining for the raw materials used to make rechargeable batteries raises environmental and social concerns that it feels must be urgently addressed. It states that while most of the consumers live in industrialized nations, the lion’s share of the raw materials is concentrated in a few developing countries. 

More than half of the world’s lithium resources lie beneath the salt flats in the Andean regions of Argentina, Bolivia, and Chile, where indigenous quinoa farmers and llama herders must now compete with miners for water in one of the world’s driest regions.

Nearly 50 percent of world cobalt reserves are in the Democratic Republic of the Congo, which accounts for over two-thirds of global production of the mineral. About 20 percent of cobalt sourced from the central African nation comes from artisanal mines, where some 40,000 children work in extremely dangerous conditions. Cobalt mine sites may contain sulfur minerals that can generate sulfuric acid when exposed to air and water. This process, known as acid mine drainage, can devastate rivers, streams, and aquatic life for hundreds of years.

By contrast, the use of fuel cells in vehicles significantly reduces the size of battery support needed, if any. Fuel cells use relatively small amounts of metals, including palladium and platinum. Ironically, both of these metals are increasingly sourced by recycling spent catalytic converters from fossil fuel vehicles.

Economic growth and job creation

The increased generation and use of green hydrogen will have both direct and indirect positive impacts on the hydrogen industry in particular, and the economy in general. The green hydrogen industry itself will grow, due in part to increased public and private investment driven by the need to decarbonize the global economy within a very short period. This specifically impacts the generation of green hydrogen, the sales and distribution of hydrogen, fuel cells and membranes, devices that use hydrogen and engines that burn it, and so on.

Moving to a green hydrogen economy is expected to create more than one million jobs in Europe by 2030, rising to 5.4 million in 2050. These are distributed across the value chain, including all end-use-related sectors. Half the jobs in a European hydrogen economy would be in the manufacture of hydrogen production and distribution equipment, plus infrastructure for end-use. Another third would be associated with fuel cells. Of course, the green energy transition will also lead to the elimination of jobs in other legacy energy sectors such as coal and petroleum.

The demand for renewable energy will increase exponentially, bringing with it further investment opportunities and many new jobs. Renewable energy creates 4.3 times as many jobs as coal and 5.4 times as many as natural gas per unit of energy produced.

The reduction in greenhouse gas emissions resulting from the use of green hydrogen can positively impact businesses by relieving them of the burden of having to pay for high emissions levels in the form of carbon taxes, or the need to get involved in emissions trading systems (ETS). This especially benefits currently high-emission industries like steel-making and heavy transport.

Overall efficiency gains could be achieved throughout the energy system by sector coupling. This refers to the idea of interconnecting and integrating the energy-consuming sectors – buildings (heating and cooling), transport, and industry – with the power-producing sector.

This allows an optimized balancing or hedging against energy market fluctuations, for example through energy sales at favorable real-time market prices or delaying sales via storage, and the intelligent transfer of energy between industries by connecting and/or coordinating generation and consumption, including over time and across large distances.

Operations can become more predictable, fluctuations in overall supply and demand can be balanced out, prices stabilized, and greater responsiveness to consumer behavior realized.

Hydrogen facilitates this through decentralized generation and storage, and by becoming a more pervasive energy carrier throughout industry and across all sectors. The advantages so secured can be leveraged using the electricity-to-gas, storage, and gas-to-electricity chain to use the same energy in both fuel-driven and electricity-driven sectors, and to facilitate storage in a way that provides energy access for both.

Energy Autonomy

It is increasingly interesting for countries to limit their dependency on others for their critical energy needs. The ability to generate green hydrogen at any location where renewable energy is available represents a major step towards limiting dependence on fuel imports.

The fossil fuel industry is based on a limited resource that is not universally available or equitably distributed. Wars are often fought over those resources, and the withholding of fossil fuels often used as leverage or a weapon in conflicts between nations. The ability to generate green hydrogen anywhere the sun shines, the wind blows, or water flows, combined with the ubiquitous cross-sectoral integration of green hydrogen into the economy and deep decarbonization of same, makes possible an unprecedented degree of energy autonomy. Thus, the desire for energy independence creates yet another convincing case for the production and use of green hydrogen.

In some cases, where an especially good natural resource allows for the generation of cheap and copious amounts of renewable energy, countries that formerly imported fuel may well become net exporters. Australia already has plans in this direction, with hydrogen exports replacing coal exports as the use of coal diminishes, and with heavy internal hydrogen use to avoid expensive fuel oil imports, which further encourages the creation of hydrogen infrastructure. There, the most ambitious proposal to date is for the Asian Renewable Energy Hub. Planned for the Pilbara region in the north of Western Australia, its scale is huge: 1,600 large wind turbines and a 78-km2 array of solar panels working to power 14 gigawatts of hydrogen electrolyzers. Depending on consumption patterns, this may be sufficient to power over 5 million homes for a year.

Decentralisation of Infrastructure

Combining renewable energy and green hydrogen to decentralize generation and storage infrastructure in the energy sector can bring many direct and indirect benefits. The ability to coordinate generation, storage, and use in terms of both time and space offers direct economic benefits, such as transport cost savings, avoidance of losses, and the ability to ensure availability as required, which limits the need for intermediate or excessive storage or transport infrastructure.

As an important indirect benefit, distributed energy infrastructure makes the energy sector much less sensitive overall to the impact of natural disasters, human intervention through sabotage or war, or technical failures. In a word, it increases the resilience of the energy system as a whole, which is a key consideration in this age of climate change and political instability. 

Good news… 

The transition to a renewable energy-driven, green hydrogen-fueled economy brings with it many advantages. It has become an urgent tool in the toolkit for fighting man-made climate change, but it seems likely that using it will leave the world a better place in general. As such, driven by need and growing by popular demand, green hydrogen appears to represent a singular investment and business opportunity.