H-word… the panacea? Well, it doesn’t emit carbon, the much-dreaded chemical element

To achieve zero emission by 2050 or 2070, hydrogen is on the radar. The news that Saudi Arabia is eyeing hydrogen production on its soil as the cleanest renewable energy is a piece of welcome news

LOGISTICS MONITOR/By Ramesh Kumar

Before you jump to conclusions, let me dispel any doubts for the readers of this column, the letter ‘H’ in the title denotes Hydrogen and not what you imagined it to be!

The global climate change debate will be incomplete with no reference to hydrogen as an alternative fuel. According to the UN Framework Convention on Climate Change, currently, the CO2 emissions in the transport sector are about 30% in the case of developed countries and about 23% in the case of the total man-made CO2 emissions worldwide. There is widespread agreement to reduce CO2 emissions from transport by a minimum of 50% at the latest by 2050. A tall order.

Why hydrogen? Because it does not emit carbon, the much-dreaded chemical element that pollutes the environment and affects living standards irrespective of skin color, nationality, or language spoken. Like tax and death, carbon is unsparing.

No wonder, to achieve zero emission by 2050 or 2070 or whatever deadline set, Hydrogen is on the radar. The news that Saudi Arabia is eyeing hydrogen production on its soil as the cleanest renewable energy is a piece of welcome news. By 2050, experts predict the global demand for clean, renewable energy will be around $600 billion. Maybe more. At least 12% of global energy need is what hydrogen would take care of by 2050. Hopefully so.

Saudi plans both green hydrogen and blue hydrogen. This is part of Saudi’s desire to reduce its dependence on fossil fuel (60% of 2021 Budget was from oil bonanza) and capture the sizeable global market. Anyone can produce hydrogen. That’s the catch. Saudi plans to produce automotive running on hydrogen cells too.

The biggest challenge for hydrogen producers will be storage and transport more than production. Expensive, no doubt. All said and done, the polluting oil –Saudi’s big earner– is unlikely to evaporate overnight. Of course, there is a race among global auto giants to jump into the electric vehicle bandwagon.

Time-tested breadwinner

Despite promises, none of them will write off their time-tested breadwinner, viz., the internal combustion engine (ICE) vehicles. The 2050 deadline under the UN Climate Control banner, the matured economies, significantly the biggest polluters of the world thus far, promised to achieve net-zero carbon emission. But a sizeable chunk, including China and India, does not agree with this deadline. India, for instance, is canvassing for 2070.

Even by 2070, it would be churlish to visualize the entire world shifting to renewable energy. Coal, among other things, will continue to be in use everywhere. Countries, both developed and developing, with adequate coal deposits are unlikely to sing hosannas in praise of climate control and shut down coal mining for domestic and export.

Hydrogen’s share by the 21st century might be in double digits. Lowest or middle rung is the question. Assuming all challenges –production, storage, and transport– are tackled well, the price will be key in hastening the shift. Vehicles may embrace hydrogen, but that does not constitute the entire universe. Energy has multiple usages. The biggest user, viz., the industry may not be enthusiastic about switching to hydrogen or any other renewable and non-polluting energy to ensure livelihood.

The world is awash with much drama over the climate issue. “The rise of ESG investing and the stigma faced by publicly listed energy firms is having an unintended side-effect. The western world’s dirty assets are heading into shadows. Public firms, including European oil majors such as Shell, and large listed mining outfits, are selling their most polluting assets in order to please ESG investors and meet their carbon-reduction targets. But those oil wells and coal mines are not being shut down. Instead, they are being bought by private companies and funds that have alternative sources of capital and stay out of the limelight,” reports The Economist (1) in a recent dispatch. Much eyewash. Greenwashing is the latest game the global corporate is playing.

India does produce hydrogen, but it is grey because grey hydrogen is produced from fossil fuels such as natural gas and naphtha. Reliance, Adani, and others announced their plans to set up green hydrogen plants in India. Hydrogen is currently used for petroleum refining and fertilizer plants in India.

In 2021, India announced the National Hydrogen Mission to promote the generation and adoption of cleaner energies, including green hydrogen. India is eyeing the export market. India is not shying away from collaborating with other nations. Since January 2022, India has signed an agreement with Australia and Denmark.

Indian industry sees a new opportunity in green hydrogen. Rahul Munjal, Managing Director of Hero Future Energies, foresees India is “well-placed to emerge as a manufacturing hub for Green Hydrogen” (2). Of course, he sees a huge potential of 8 million tonnes in the domestic market itself by 2030. Of course, he lays down several sops to realize the “manufacturing hub” dream. The storage and transportation of the odorless, flammable, explosive, volatile, and lighter-than-air-green Hydrogen occupy one of the prominent slots in his five-point agenda.

Economically feasible?

While on the point of expensive, today the green hydrogen a kilo costs US$6. If it can bring down to US$2/kg, it will be economically feasible, opine domain experts. Surprisingly and good for India at that, Mukesh Ambani of Reliance, who has thrown his hat into the ring, hints at producing it at a solitary dollar. (3) Will he or won’t he? Is it hype?

Going by what his Jio has done on the mobile phone segment and gaining a massive foothold in the Indian mobile phone market in the shortest possible time sheerly through a clever pricing strategy, Ambanis selling green hydrogen at a dollar a kilo cannot be ruled out.

As knowledgeable observers point out that Reliance has chosen renewable or clean energy as one of its key verticals for growth in the years to come. Ambani may do what he does say. If that is so, as the National Hydrogen Mission policy is being unbundled, he may get relevant policy sops from the government.

While on the topic of future energy and the role of renewable energy in the years to come, it is pertinent to draw attention to Mark Mills, the author of The Cloud Revolution: How the Convergence of New Technologies Will Unleash the Next Economic Boom and a Roaring 2020s (available on Amazon).

Even if all the countries fulfill current promises to deploy more renewables (and for the record, none have so far kept those promises), two decades from now, not much more than one-fifth of global energy will come from renewables, says Mills.

So, what about the hot topic of electric vehicles across nations? Sure, Mills concedes, there is growing consumer interest in EVs and more being produced and sold. Yet, “even if the total number of EVs were to reach 300 million by say 2030, that would constitute just 20% of all the 1.5 billion cars that will be on the world’s roads by then. … So, petroleum will remain a significant energy material in transportation machines for a long time.”

So, all that the OPEC and the non-OPEC group are engaged in is showcasing their bets with a talk on hydrogen fuel and hedging. Nothing beyond that. Given the hypocrisy of the global leaders of politics and business, the pollution-free environment we witnessed during the COVID-19 lockdowns with clean skies and fresh air and nature in its splendor will be only possible if a similar total shutdown of all activities on a global scale is imposed. A near impossibility. Change sure is a certainty. Circa 2030 or 2050, or 2070 will be different from today.

• Main/Featured picture on top provided by the author of the article

[Also read by the same author: A ‘novel’ American strategy to reduce road fatality! Not a bad idea at all – THE NEWS PORTER]

• Ref:
  (1) https://www.economist.com/leaders/2022/02/12/the-truth-about-dirty-assets
  (2) Greenlighting Green Hydrogen, Rahul Munjal, The Economic Times, February 16, 2022
  (3) The Business Standard Podcast, What is Green Hydrogen? Can India Make It Affordable? November  25, 2021

The author is a business journalist specializing in logistics and supply chain. He has traveled 200,000 km on the Indian highways, met over 100,000 long-haul truck drivers across India since January 2010. He has authored three books: 10,000KM on Indian Highways, Naked Banana! and An Affair With Indian Highways. He is a Life Member of the Chartered Institute of Logistics & Transportation (CILT-India Chapter). He can be reached at konsultramesh@gmail.com. In this column, ‘Logistics Monitor’, he presents a global perspective on logistics and supply chain. The views are the author’s own and The News Porter bears no responsibility for the same.