Bring hydrogen out of the shadows of the green transition

When Americans think of renewable energy, it is solar and wind power that comes to mind. Although few think of it, hydrogen is quietly becoming no less of a key part of our energy future — one on which the private sector and the Biden administration are making a very big bet. 

It has been one of Washington’s best-kept secrets. 

Hydrogen is the most abundant element in the universe. It is energy-dense, very light, easily stores energy and produces no polluting emissions, only water. Hydrogen fuel cells produce electricity and heat.

Hydrogen is currently used mainly for refining oil and producing fertilizers, and niche transportation such as pilot fleets of hydrogen-powered buses in some locales. Private investors and governments are ramping up efforts for large-scale uses such as industrial production of steel, cement and chemicals, energy storage and mass transportation.

Most hydrogen today is produced from natural gas, so it is not carbon neutral. But it can be produced from electricity or by electrolysis, separating the hydrogen from water. The former is known as gray hydrogen. The latter is zero-emission green or clean hydrogen produced from renewable energy sources, but it is expensive to produce.

Clean hydrogen is the big bet of Biden’s climate initiatives. Hydrogen initiatives are designed to incentivize investment and research and development to dramatically reduce costs of green hydrogen, reportedly by 80 percent to $1 per kilogram (currently $4.5/kilogram) initially, with up to $3 per kilogram tax credits to scale up production. This would be a similar trajectory to more widespread green technologies, as declining costs have scaled up solar and wind power.

Already, businesses worldwide have announced investment plans for 1,000 hydrogen projects worth $320 billion. To catalyze the larger investments needed to meet climate targets (estimated at $700 billion by 2030 or higher), the Biden administration has committed nearly $9.5 billion to the Bipartisan Infrastructure Act and some $10 billion to the Inflation Reduction Act. The infrastructure bill creates seven clean hydrogen production hubs in all regions of the country; the Inflation Reduction Act provides tax credits and other subsidies for clean hydrogen production.

The public obscurity of hydrogen is all the more remarkable as it is not an invention of Team Biden but has been a work-in-progress 20 years in the making. It is one positive legacy of George W. Bush, who, grappling with the climate change issue, put the U.S. government on the hydrogen path with a $1.2 billion investment.

This led me, then a counselor to the undersecretary of State for global affairs, to be assigned to form an inter-agency task force with the Department of Energy to build a global coalition called the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE).

IPHE has 24 member states including Europe, India, China and Japan. Working with respective private sector partners, it has played an important role in catalyzing the surging growth in the use of hydrogen globally. Some 30 nations now have hydrogen programs. IPHE remains a major player in developing cooperation in regulations, standards and safety measures as well as certification metrics to enable widespread trade in hydrogen.

As technology improves and investment expands, hydrogen accelerating the green transition is the promise and vision the administration has fostered. Its possibilities for decarbonizing major sources of greenhouse gas emissions are seductive.

Heavy industry accounts for almost 40 percent of greenhouse gas emissions. What if industries like steel, cement and chemicals were emissions-free? Hydrogen storing energy from solar and wind power could further scale up those clean energy sources. Residential and commercial buildings account for 29 percent of emissions. Retrofitting them with green hydrogen heat and electricity could mean net-zero emission buildings. Airplanes flying on hydrogen fuel and ramping up fleets of hydrogen-powered trucks and buses are also within the realm of the possible.

That said, the challenges are daunting. Lowering the costs of green hydrogen requires more efficient electrolysis, fuel cells, refueling equipment and transmission and storage. Costs will almost certainly come down as hydrogen production and use continue to boom.

But as with the battle to control climate change writ large, it is a question not just of performance, but of timing. By some estimates, multi-trillions of dollars for investment will be needed by 2050. Building more hydrogen infrastructure, as Biden’s seven hubs intend, is a much-needed springboard for boosting its use.

Devising a sensible legal and technical framework for the business of hydrogen, not least, government/private sector and national/local partnerships in formulating regulations and standards, are immediate challenges. It is not hard to envision NIMBY-type local pushback as hydrogen expands across the nation. More broadly, safety standards for transportation and storage, and certification measures are a near-term obstacle to developing trade both in the U.S. and globally.

Can hydrogen build out at a pace consistent with emissions targets? No question it is a tall order. Yet, momentum is building globally. Few would have predicted the swift drop in solar and wind price or their respective technological leaps forward that have spurred their rapid deployment.

Biden’s climate goals are ambitious: a 50 percent reduction in emissions from 2005 levels by 2030 and zero-emission electricity by 2030. Difficult as it will be to reach those goals, absent a major contribution from hydrogen, particularly in regard to industrial production, it will be significantly more challenging.

There is little question that the possibilities of hydrogen in a post-petroleum economy are enticing. That helps to explain the enthusiasm and investment of both the private sector and the administration. 

Establishing hydrogen’s role in the public imagination would add to current progress and help to make realizing its potential a larger part of the global conversation.

Robert A. Manning is a distinguished fellow at the Stimson Center. He previously served as senior counselor to the undersecretary of State for global affairs, as a member of the U.S. secretary of state’s policy planning staff and on the National Intelligence Council Strategic Futures Group. Follow him on Twitter @Rmanning4.