Hydrogen Industry Leaders Issue 24

ISSUE 24

COMING UP

How the North East is Establishing Itself as a Vital UK Hydrogen

The European Hydrogen policy landscape

Exploring the Role of the North of England Hydrogen Mobility Visualiser

Is Innovation the Answer to Boosting the UK’s Hydrogen Economy

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FOREWORD

“Hydrogen dots are being connected on a regional and international scale”

Welcome to the latest edition of Hydrogen Industry Leaders, a magazine dedicated to the pioneers and visionaries shaping the future of the hydrogen economy. In this issue, we explore the innovations, challenges, and triumphs of an industry that stands at the forefront of the global energy transition.

This edition we delve into the latest technological advancements, from electrolysers and fuel cells to storage and distribution innovations. We also examine the policy frameworks and market dynamics driving investment and growth in hydrogen infrastructure worldwide.

Our featured articles highlight successful projects and collaborations that are setting benchmarks for the industry. We hear from leaders who are navigating the complexities of scaling up production and ensuring the sustainability of the hydrogen value chain. These stories of determination and ingenuity underscore the pivotal role of industry leaders in steering us toward a greener future.

Floyd March Editor f.march@peloton-events.co.uk

Hannah Wintle Multi Media Journalist

Paul Rose Graphic Designer

Hydrogen for

‘Low Hanging Fruits’ of South America

HOW THE NORTH EAST IS ESTABLISHING ITSELF AS A VITAL UK HYDROGEN HUB

With net zero efforts taking shape across the nation, the North East is poised to establish itself as a key player in the UK’s burgeoning hydrogen economy.

At the HIL 100 Breakfast Hub in Darlington, Hydrogen Industry Leaders welcomed representatives from bp, Northern Gas Networks (NGN), Arup, Kellas Midstream, and Tees Valley Combined Authority, to share their expertise and insights and paint a picture of the emerging hydrogen economy in the North East.

In the region, bp is aiming to deliver one of the biggest blue hydrogen projects in the UK. H2Teesside, as well as generating economic prosperity within the area, will produce approximately 160,000 tonnes of low carbon hydrogen per year.

In addition, their green hydrogen project, HyGreen Teesside, which aims to be one of the biggest green hydrogen production facilities in the UK, will produce 80MWe of green hydrogen capacity by 2025, growing to 500 MW by 2030.

Between the two projects, which combined boast a capacity of 1.5GW, bp would enable Teesside to deliver 30% of the UK government’s target of developing 5GW of hydrogen production by 2030.

Speaking of the region’s attractiveness to developers, Matt Sims, Project Operations Manager at bp, said: “The main reason is there’s a large customer base potentially for hydrogen in this area.

“Also, the area has a proud industrial heritage, so the development of major industry in this area is welcomed by the public, and also by bp. There’s also an appetite for regeneration in the area, which is pretty important.”

He added that on the back of bp’s two projects, the region stands to gain substantial further investment. “It’s all about bringing industry back to the area,” he said.

HYDROGEN HIGHLIGHTS AN OPPORTUNITY FOR INDUSTRIAL AND ECONOMIC GROWTH IN THE NORTH EAST

Hydrogen, therefore, has an important role within the North East which builds upon the region’s rich industrial history to date, and could inject further prosperity into the region.

Chris Rowley, Head of Net Zero, Tees Valley Combined Authority, said: “You’ve got significant organisations that have chosen to come to Tees Valley to do their hydrogen projects.

“You’ve got technology that underpins hydrogen, technology that’s being developed to deliver hydrogen, and technology that’s only possible because of hydrogen, all of which contribute to sustaining the UK’s industrial base and economic development off the back of that, especially in places like here in the Tees Valley.

“Industry is the future of highly paid jobs in the Tees Valley, and hydrogen is a really, really important part of that.”

At the HIL 100 Breakfast Hub in Darlington, Hydrogen Industry Leaders welcomed representatives from bp, Northern Gas Networks (NGN), Arup, Kellas Midstream, and Tees Valley Combined Authority

HOW READY IS THE NORTH EAST TO EMBRACE HYDROGEN?

When it comes to the adoption of hydrogen into industry, Chris Verity, Hydrogen Senior Projects Manager at Northern Gas Networks, who through the East Coast Hydrogen project are aiming to connect up to 4 Terawatt hours of hydrogen storage by 2030 and aid in securing around 360,000 jobs across Teesside, the Humber region, and the East Midlands, explained that there’s a variance in preparedness throughout the region.

This ranges from those with a desire to decarbonise their operations and a vague consideration of hydrogen as a method to get there, to those with hydrogen-ready equipment already in place.

Importantly, Chris noted: “The thing to highlight is that there’s thousands of kilometres of hydrogen network existing in industry, there’s lots of hydrogen plants that already exist.

“In some countries in the world like Singapore and Hong Kong, they are still using town gas which is predominantly hydrogen, so people see it as new, but it’s not new, it’s just expanding it into areas that it’s not currently working in. There are things to build on.”

THE NORTH EAST’S GEOGRAPHICAL ASSETS ARE ESSENTIAL FOR HYDROGEN STORAGE

Storage wise, the North East is reportedly blessed with the appropriate geographical assets to take on the hydrogen challenge, though investment is required to utilise these to their fullest potential, according to Arup’s James Todd, Associate Director of Energy Geotechnics.

If we can’t store energy for long durations, we can’t reach net zero.

Emphasising the time factor at play, he said: “It’s a now problem. If we haven’t got spades in the ground now then there’s an issue here that needs to be addressed with investment in this area, because without that storage, we’re not going to be able to use the hydrogen in the way that we envisage it.”

Arup’s recent Industrial Decarbonization Research Innovation Center (IDRIC) funded study established that by 2035, the East Coast Cluster is looking to provide 48TWh of hydrogen storage, meaning work must commence presently to achieve this goal.

Despite the length of time it can take to build up storage capacity, James unscored that the North East is blessed with established salt caverns which can be repurposed for the use of hydrogen while alternative storage means are developed.

A FUNDAMENTAL CHANGE IN ATTITUDE IS REQUIRED TO REACH NET ZERO

Ultimately, conversations around hydrogen often lead back to the underlying mission to decarbonise and achieve net zero not just in the North East, but in the UK and indeed, the wider world.

Speaking on this broader mission and where the North East fits into the narrative, Matt Sims, Project Operations Manager at BP, said: “The future for Teesside in general is to look at how it uses hydrogen in a different way, because today most hydrogen is used to improve oil quality feedstock today and it’s used and things like tablecloths and clothes and varnishes and all the stuff you can see.

“So, if you look at the way the industry is going to develop, if we produce low carbon hydrogen in this area, both blue and green and have low carbon energy, those industries will come because if there’s a demand for a product which is not oil based, then where they’re going to manufacture is here.

“And that’s what when you start thinking about everything that we wear from artificial clothes and tires and insulation, that all comes from crude oil today and that cannot continue indefinitely.”

As hydrogen efforts in the North East continue to pick up pace and discussions such as these become increasingly important, all eyes are on the evolution of the wider UK hydrogen sector.

To engage with the ongoing story and keep up to date with the regional hydrogen efforts shaping the industry, join us at our future HIL 100 Breakfast Hubs in Nottingham and Hull later this year. Click for for more information

To get to net zero, that has to change, and that’s only going to change by having a low carbon hydrogen industry and having access to other sources of carbon which aren’t crude oil, that’s the reality.

A growing number of governments are acknowledging the importance of the hydrogen sector and are implementing policy support measures, which are required to ensure technology readiness, enhance market penetration, and stimulate market growth.

Policies and standards collectively shape the landscape for hydrogen technologies and infrastructures. They provide a regulatory framework, financial support, and strategic direction to promote the sustainable deployment of hydrogen across European countries.

EHO PLAYS IMPORTANT ROLE IN COVERING EU POLICIES

For context, the EHO database covers a total of 29 EU policies and legislations that directly or indirectly affect the development and deployment of hydrogen technologies. To achieve its net zero ambitions, the EU started with crosscutting strategies, such as the EU Green Deal and the EU Hydrogen Strategy, setting forward roadmaps and targets that are to be achieved in the near future.

Policies and standards collectively shape the landscape for hydrogen technologies and infrastructures.

Encapsulating this in a recent report titled: ‘The European hydrogen policy landscape’, the European Hydrogen Observatory and Clean Hydrogen Partnership aimed to summarise the status of the European hydrogen policies and standards landscape.

It is based on the information available at the European Hydrogen Observatory (EHO) platform, the leading source of data and information on hydrogen in Europe (EU27, EFTA and the UK), providing an overview of the European and national policies, legislations, strategies and, codes and standards which impact the deployment of hydrogen technologies and infrastructures.

As a next step, the EU has developed legislations, such as those bundled in the Fit for 55 package, to meet the targets they have put forward. The implemented legislations, including funding vehicles and initiatives, have an impact on the whole value chain of hydrogen including production, transport, storage and distribution, and end-uses.

At national level, as of July 2023, 63% of the European countries have successfully published their national strategies in the hydrogen sector, while 6% of the countries are currently in the draft stage.

QUANTITATIVE INDICATORS WITHIN THEIR NATIONAL STRATEGIES MORE COMMON THAN EVER

Several European countries have strategically incorporated quantitative indicators within their national strategies outlining their targets and estimates across the hydrogen value chain. This deliberate approach reflects a commitment to providing clear and measurable goals within their hydrogen strategies.

A target often used in the national strategies is on electrolyser capacity as an effort to enhance the domestic renewable hydrogen production. Germany took the lead with an ambitious goal of achieving 10 GW by 2030, followed by France (6.5 GW) and Denmark (4 - 6 GW).

Other targets that some of the countries use in their strategies are on the number of hydrogen refuelling stations, fuel cell electric vehicles and total (renewable) hydrogen demand. A few countries also have targets on renewable hydrogen uptake in industry and hydrogen injection limit in the transmission grid.

To monitor the policies and legislation that are adopted on a national level across the hydrogen value chain, a survey was launched with national experts, which was validated by Hydrogen Europe.

IN TOTAL, 28 EUROPEAN COUNTRIES HAVE PARTICIPATED IN THE SURVEY

On production, the survey revealed that 61% of country specialists report that their country provides support for capital expenditure (CAPEX) in the development of renewable or low-carbon hydrogen production plants. Moreover, 7 countries also provide support for operational expenditure (OPEX).

Furthermore, 8 countries have instituted official 5 permitting guidelines for hydrogen production of hydrogen technologies and infrastructures, a projects, while 5 countries have enacted a legal act or established an agency serving as a single point of contact for hydrogen project developers. For transmission, only two countries reported to provide support schemes for hydrogen injection.

Several countries have policies in place that clearly define the hydrogen limit in their transmission grid for now and in the future, ranging from 0.02% up to 15%, while a few countries define within their policies the operation of hydrogen storage facilities.

On end-use, the majority of countries, totalling 71%, reported to have implemented support schemes aimed at promoting the adoption of hydrogen in the mobility sector. Purchase subsidies stand out as the predominant form of support for fuel cell electric vehicles (FCEVs), with implementation observed in 17 countries.

In the context of support schemes for stationary fuel applications, for heating or power generation, only two countries have adopted such measures. A slightly larger group of four countries do provide support for the deployment of residential and commercial heating systems utilizing hydrogen.

For hydrogen end-use in industry, a total of 9 countries reported to provide support schemes with a major focus on ammonia production (8) and the chemicals industry (7). On the topic of technology manufacturing, 7 countries, have reported to have support schemes of which grants emerge as the mainly used method (4).

Exploring the latest advancements into European total of 11 standards have been revised and developed between January 2022 and September 2023.

THIS INCLUDES STANDARDS COVERING THE FOLLOWING AREAS:

6 for fuel cell technologies, 2 for gas cylinders, 2 for road vehicles and 1 for hydrogen refuelling. Moreover, 5 standards were published since September 2023, which will be added to the EHO database in its next update.

This includes ISO/TS 19870:2023, which sets a methodology for determining the greenhouse gas emissions associated with the production, conditioning and transport of hydrogen to consumption gate.

This landmark standard, which was unveiled at COP28, aims to act as a foundation for harmonization, safety, interoperability and sustainability across the hydrogen value chain.

Building on the executive summary, the full report can be found here: https://observatory. clean-hydrogen.europa.eu/sites/default/ files/2024-04/Report%2002%20-%20The%20 European%20hydrogen%20policy%20landscape. pdf

DECARBONISING HARD-TO-ABATE SECTORS

HYDROGEN FOR THE ‘LOW HANGING FRUITS’ OF SOUTH AMERICA

Hydrogen produced with minimal or no carbon emissions is often expected to become an important tool for meeting climate objectives and decarbonising national economies that currently mostly rely on fossil fuels.

That’s the topline from the latest Oxford Institute for Energy Studies looking into the ‘low hanging fruits’ for the growth of hydrogen across South America and despite initial expectations in the area, it seems unlikely that clean hydrogen will be used by all industries that require decarbonisation.

“However, many researchers, policymakers, and energy practitioners anticipate that some hardto-abate sectors, such as producers of oil and gas/ petrochemicals, nitrogen fertilizers, steel, and electricity, and heavy-duty and long-distance land transport, will be among the first to adopt this substance, paving the way for others” the abstract concludes.

While considerable attention has been given to the role of clean hydrogen in the decarbonisation efforts across Europe, Japan, South Korea, and the United States, the potential role of this substance in South America – a continent largely associated with significant potential for the cost-competitive production of decarbonised hydrogen – has not received substantial attention.

Furthermore, besides favourable geographical and geological conditions that could enable the countries of the region to develop the manufacturing of clean hydrogen and its derivatives for export, South American nations also face challenges posed by hard-to-abate sectors that could potentially use hydrogen to decarbonise their operations.

Therefore, this paper focuses on Brazil, Argentina, Colombia, and Chile – the four largest economies of the continent with ambitious plans to develop national hydrogen sectors – and analyses the opportunities and challenges posed by clean, domestically sourced hydrogen for the decarbonisation of their ‘low hanging fruits’.

BRAZIL WITH UNIQUE OPPORTUNITIES BUT SOME CHALLENGES REMAIN UNSOLVED

While the report focused on these four key regions of South America, there are key constraints and further opportunities that stood out in Brazil and Argentina.

The report explained: “One of the key barriers relates to Brazil having a limited infrastructure of natural gas pipelines that could be used for the delivery of hydrogen by land. In fact, historically, they evolved primarily along the coastal areas and the transportation and distribution grids constitute only 9,400 and 37,000 km, respectively (Transporte Moderno, 2023).

“In these circumstances, it would be logistically complicated to produce hydrogen in centrally located hubs and then transport it as a gaseous fuel to industrial plants, refuelling stations, and so forth in the interior of the country, even if the whole natural gas pipeline infrastructure were to be repurposed, in addition to technical constraints.

North America stays in the spotlight, but South America has unique opportunities

“Geographically speaking, most of the nation’s solar and wind energy is currently generated in the northeast of the country, respectively 42 and 92 per cent (Chicano, 2022). At the same time, most of the potential domestic demand for green hydrogen would be located either in the southeast or midwest, which are respectively the largest industrial and agricultural regions in Brazil.

“That is why large flows of renewable energy from the northeast to the southeast and mid-west will face some serious bottlenecks in transmission infrastructure connecting potential supply with demand, and will require substantial investment.”

SIMILAR STORY ACROSS THE CONTINENT WITH ARGENTINA FACING CONSTRAINTS

Key measures and policies are needed to facilitate domestic use of locally produced hydrogen in Argentina. As evident, while numerous sectors and niche industries in Argentina exhibit potential for the widespread adoption of locally produced, decarbonised hydrogen, their implementation should be fostered and facilitated by supportive policies and regulations.

From the OIES: “Policies should address some of the country’s key specific domains. First and foremost, Argentina should have a sound regulatory framework overseeing operations at each stage and element of the clean hydrogen value chain.”

With this in mind, in May 2023, the Argentine Energy Secretariat unveiled plans for a comprehensive encompassing renewables-based green hydrogen, nuclear-derived pink hydrogen, and blue hydrogen produced via SMR with CCS (Secretaría de Energía, 2023b).

This bill aims to establish fiscal stability for three decades, along with tax benefits, certification of origin, and the integration of local value chains. Additionally, a roadmap for the certification of origin of green and low-emission hydrogen is expected to be created by the National Institute of Industrial Technology, or INTI (INTI, 2021).

The report continued: “However, with a new administration taking office in December 2023, uncertainties surround the continuity of current and future incentive mechanisms for specific technologies amidst the imminent energy sector deregulation.

In principle, the formulation and introduction of these mechanisms could promote the uptake of Argentina’s clean hydrogen not only by hard-to-abate sectors but by other related industries as well.

“Apart from a well-functioning regulatory framework supporting the operations of the Argentinean clean hydrogen value chain, an efficient value chain involving local suppliers of goods and services should be created.

“Currently, efforts are being applied to enhance or establish capabilities across sectors that could engage competitively in local clean H2 development, such as those of wind towers, equipment for energy conversion and control, electrolyser components and balance of plant, power electronics, storage and transportation infrastructure for hydrogen, operational practices for hydrogen plants, predictive maintenance, logistics, and traceability (CONICET, 2020).”

Like in most other countries that aim to expand their national hydrogen production, renewable and electrolyser capacities of Argentina should be substantially augmented. In pursuit of national decarbonised hydrogen targets by 2050, plans call for the addition of 30 GW of electrolysers and an additional 55 GW of renewables (Secretaría de Asuntos Estratégicos, 2023). It is projected that investments totalling around $90 billion by 2050 will be necessary to meet the established production objectives (Secretaría de Asuntos Estratégicos, 2023).

So as the spotlight continues to shine on the US and Europe for the production of hydrogen, it is becoming more evident that South America will play a significant role in production, should the barriers to entry be overcome.

EXPLORING THE ROLE OF THE NORTH OF ENGLAND HYDROGEN MOBILITY VISUALISER

One of the most difficult aspect of growing a new economy such as hydrogen, is being able to track and trace where the developments are happening.

The ability to do this can help highlight progress being made in the sector but also where there are bottlenecks, particularly in transport.

Despite both sides of the EV and Hydrogen sector Refuting the point that they are in competition with one another, the physics of hydrogen refuelling and electric vehicle charging are fundamentally different.

The levels of certainty and industry development for both hydrogen production and hydrogen vehicles are several years behind the electric vehicle market.

It’s this uncertainty that has driven interest by TfN’s local authority partners and freight industry stakeholders to highlight the need for greater clarity on the potential for the use of hydrogen for transport in our region.

It’s also led to the need for a pan-northern hydrogen transport refuelling study featuring as a priority activity for TfN within the Transport Decarbonisation Strategy, published in 2021.

SYSTEMS APPROACH TO HYDROGEN IS BECOMING A COMMON THEME

Responding to this challenge, they employed a systems approach, working with Northern Gas Networks (NGN) and Environmental Resources Management (ERM), in developing the North of England Hydrogen Mobility Visualiser.

The visualiser takes a cross-sectoral approach to visualising the potential for hydrogen refuelling in the North and is available at Hydrogen Mobility Visualiser (ermapps.com).

Joining the hydrogen dots to create a bigger picture of hydrogen in the North West

THROUGH USING THE VISUALISER TOOL, USERS CAN:

f Highlight the areas across the North where the potential for hydrogen refuelling for heavy duty transport is greatest.

f Identify the locations which are ripe for building cross sectoral partnerships to further define potential projects.

f Explore the potential transport modes most likely to offtake hydrogen from those locations over time e.g. bus, Heavy Goods Vehicle (HGV).

As a result of the uncertainty surrounding the application of hydrogen for transport uses, the visualiser should not be used for pinpointing potential hydrogen refuelling sites, but rather to identify the approximate areas where the potential for hydrogen refuelling is greatest.

Early indications are that the tool is already returning value in this respect, with the East Coast Hydrogen project indicating that they plan to use the tool to aid the future development of their network, when assessing where potential hydrogen demand from transport may occur.

PROACTIVE ‘LAYERS’ HELP FUTURE-PROOF THE TOOL

Speaking to Hydrogen Industry Leaders, Peter Cole, Head of Decarbonisation, and Callum Reddington, Policy and Strategy Officer, at TfN explained: “Users can also add ‘layers’ to understand the proximity of likely transport hydrogen demand to existing gas networks and to where future gas pipelines are proposed.

“This is important, as piped hydrogen solutions have the potential to supply the fuel at reduced costs and in the quantities that may ultimately be needed.”

One of the most important factors of the tool is the cross-sectoral development of with NGN and ERM, with Peter adding: “Importantly, the tool is also cross-sectoral, developed with Northern Gas Networks (NGN) and Environmental Resources Management (ERM), and includes potential demand from HGVs, buses and trains.”

Callum added: “It doesn’t assume that all heavyduty transport will be hydrogen fuelled, but rather applies a probability-based approach where only local vehicles with very challenging duty cycles or longer distance very heavy-duty transport uses (such as aggregates freight trains) are considered.”

The tool is available publicly for anyone to use, and can be found on TfN’s website or you can access the tool directly by clicking here.

Currently, the tool includes the high-level indicative locations of the East Coast Hydrogen project’s core, Stage 3 and Stage 5 proposals. Other pipeline proposals were considered for inclusion but there’s always a confidentiality trade off with what can be presented in a publicly accessible visualiser tool.

The tool currently doesn’t look at sources of hydrogen supply, although this is certainly information that could be added in the future.

The main purpose of the tool is to identify locations where transport may add to the case for hydrogen supply plant. Interestingly, Trafford, Bradford and Tees Valley have relatively large clusters of potential hydrogen transport demand, which correlates well with hydrogen supply projects, such as those proposed by Trafford Green Hydrogen, Hygen and N-Gen in Bradford, and the Tees Green Hydrogen project.

HOW CAN WE EXPECT THIS TO BUILD THE HYDROGEN ECONOMY?

The tool indicates where the potential for hydrogen refuelling for heavy duty transport is greatest and therefore those locations which are ripe for building cross-sectoral partnerships to further define potential projects.

TfN hopes that it proves useful to a range of potential users, including:

Local Authorities – in gaining an understanding of the potential for hydrogen use in their areas, and to stimulate conversation with hydrogen users and suppliers.

Freight, bus and train operating companiesin understanding where refuelling locations are most likely to be located, where partnerships can be formed with hydrogen suppliers and increase certainty for fleet renewal strategies.

In the same way, the tool should prove useful for hydrogen suppliers in identifying where potential demand is likely, when it’s likely to appear and who to start engaging with to form partnerships.

Finally, gas distribution network operators can draw information from the tool when building the case for hydrogen pipelines.

The tool indicates where the potential for hydrogen refuelling for heavy duty transport is greatest.

REALISTIC CERTAINTY CRITERIA ADDED TO EACH MODE AND DUTY CYCLE

Speaking on the development of the tool, Peter explained: “We engaged widely with stakeholders when developing the tool, and there was an expectation by some that the visualiser would be able to pinpoint exact candidate site locations for hydrogen refuelling sites.

“However, given that the levels of certainty and industry development in terms of both hydrogen production and hydrogen vehicles are several years behind the EV market, we felt that if was important that the visualiser was not used for delineating potential hydrogen refuelling sites, but rather to identify the approximate areas where the potential for hydrogen refuelling is greatest.”

It’s about identifying those areas with the greatest potential for forming the partnerships that can then go on and assess sites utilising an appropriate level of planning due diligence.

Callum explained the decision making around the assumptions made through the tool around: “Cost, vehicle availability and technological innovation. To maintain a level of robustness, we’ve applied realistic certainty criteria to each mode and duty cycle. The assumptions we’ve used when creating the tool can be found in full within our modelling method document, linked from the tool.”

Success for the project partners would be a future where hydrogen for mobility is a serious part of the decarbonisation solution discussion for places where it makes sense.

Meaning those place that have:

f Potential for cross sectoral offtakes in that area;

f Proximity to abundant future supply of low carbon hydrogen;

f Proximity to proposed future hydrogen pipelines;

f Relevant existing workforce skills, particularly from high carbon industries;

f And challenging local vehicle duty cycles or very heavy duty transport uses operating, originating or finishing in that place.

Going forward there are opportunities for considering future industrial synergy within the tool to develop partnerships between transport and industrial users of hydrogen, not just between modes of transport, along with further exploration of the role of hydrogen for coach travel and in places where existing electricity grid constraints exist.

IS INNOVATION THE ANSWER TO BOOSTING THE UK’S HYDROGEN ECONOMY?

Around the world, more and more industries are looking to the opportunities hydrogen presents to decarbonise, and the global hydrogen economy is projected to grow significantly as a result.

Where the UK fits into this picture has yet to be fully determined, but according to a recent report by the Hydrogen Innovation Initiative, the route to maximising the nation’s market potential could lie in innovation.

Launched at the end of April at a reception at the Institution of Mechanical Engineers to a room full of industry leaders, Government officials, politicians, and academic, the report projected that the global hydrogen economy could experience a growth of up to $8 trillion annually by 2050, with a global hydrogen technology market of up to $1 trillion.

If the UK is able to capture a 10% share of this technology market, it could lead to economic growth and job creation, further progress in the decarbonisation journey including delivering 10GW low carbon hydrogen production by 2030, and secure a leadership position with the power to influence where value will be anchored.

THE UK MUST MITIGATE RISKS AS IT EXPLORES THE AVAILABLE OPPORTUNITIES

The report paints hydrogen as an attractive endeavour for the UK, and acknowledges the strides made in embracing the industry to date, including the publication and delivery of the UK hydrogen strategy, the creation of the Hydrogen Delivery Council, and the hydrogen supply chain study.

When both direct and indirect economic benefits are considered, the global hydrogen economy has the potential to be worth $8 trillion by 2050.

While early support mechanisms are in place, it is acknowledged that these have become fragmented and siloed within industrial sectors, where a more holistic approach is needed to consider long term investment opportunities.

The report stipulates that: “Connecting the three phases of discovery, development and deployment will be critical to build competitive UK technology at the scale required.”

Critically, due to the nature of the hydrogen industry being nascent and technology driven, the importance of focussing on the development phase of innovation is emphasised.

“This is a critical phase where competitive capability is established, market leadership is secured, supply chains are grown, and deep-rooted capital investment is anchored into the domestic economy,” the report states.

“Without addressing this, the UK risks becoming reliant on imported technology, products and services from overseas markets. This would result in reduced economic benefit and could restrict access to critical technology as global competition increases.”

The UK has established strong foundations for a domestic hydrogen economy, positioning the UK as an early mover.

HOW CAN THE UK EMBRACE OPPORTUNITY?

With the projected growth of the global hydrogen economy, significant opportunities for UK businesses become available.

However, reaping the full extent of the economic rewards won’t be possible if the focus falls solely on the UK hydrogen economy, and not the wider global market.

“Without sufficient focus on the global market opportunity and the steps required to connect the key phases of technology innovation, the UK risks being left behind by its global competitors.

“As it stands, there is a risk that the investment required to create the hydrogen economy in the UK will flow overseas to procure technology that is not available domestically. This could compound the issue for UK industry further stifling UK growth and global competitiveness.”

To prevent this, the right support mechanisms must be in place to enable the growth of UK industry through the global export market, and a holistic view of the hydrogen economy will provide the insight into which hydrogen technologies will be in demand.

By 2050, it is forecast that the four technologies representing the largest proportion of the hydrogen technology market are production technologies, propulsion systems for transport, industrial hydrogen for feedstock, heat, and power, and end-to-end hydrogen storage.

Utilising the established innovation network in these four strategic areas of opportunity could enable the UK to secure a significant proportion of these industries and technologies market share, but to get there, the right strategic investments must be made.

The report states: “With the right support mechanisms in place, the UK can accelerate the growth of world-leading companies and globallycompetitive supply chains, able to win contracts both in the UK and in overseas markets.

“This will stimulate a step change in domestic and foreign direct investment into the UK to help UK supply chains scale rapidly, securing an ambitious share of the global market.”

TARGETING THE TECHNOLOGY MARKET COULD DELIVER WIDER ECONOMIC AND SOCIOECONOMIC BENEFITS

If the UK targets a 10% share of the global hydrogen technology market, the return could be up to £46 billion by 2050, and unlock the potential to secure an equivalent share of the global hydrogen economy, which could increase the total economic benefit ten-fold.

Furthermore, establishing market leadership could also protect UK leadership in existing strategic markets that will undergo transition, such as the automotive and aerospace industries, pivoting capabilities from adjacent markets like oil and gas into a high growth market, growing the innovative supply chain, and securing resilience in UK industry to produce essential net zero technologies.

In terms of socio-economic benefits, the amount of green jobs that would be created could contribute to the rebalancing of the UK economy, with 90% of job creation expected to be outside of London and the South East, based on the current UK manufacturing sector’s existing supply chains’ geographical distribution.

THE REPORT IDENTIFIES FOUR STRATEGIC AREAS OF NEED

In order to achieve these outcomes, the UK must target the four aforementioned areas of the global hydrogen technology market, though ensuring that robust supply chains are in place will be essential.

As such, the report identifies four strategic areas of need:

1. Distribution and control: Components required to safely distribute and deliver hydrogen, covering both infrastructure and on-vehicle.

2. Conditioning: Preparation of hydrogen for distribution and use, including compression, liquification and purification.

3. Electrical/thermal management: Electrical and thermal management required for hydrogen across end-to-end.

4. Monitoring and measurement: Using sensors and monitoring systems to ensure the safe and efficient operation of hydrogen systems.

Additionally, the four underpinning dependencies of materials, skills, digital technology, and batteries, “will be key to ensure the needs of the hydrogen economy are recognised and delivered.”

As the UK continues on its hydrogen and wider decarbonisation journey and explores the routes to capture a share of the market, it is clear that technology will form a part of the equation.

Should the nation grasp the opportunity as laid out in the report, the knock-on effects in terms of decarbonisation and economic prosperity could propel the UK into a hydrogen fuelled future based on their strong, early investments into the sector, and help to secure wider economic benefits going forward.

PODCAST WRITE UP

HYDROGEN HOTEL

Can you tell me a little bit more about your wider decarbonisation efforts at Iberostar Group, and how it was decided to include hydrogen within this?

Álvaro: As a species, I would say we have a tremendous challenge to reduce emissions, and we clearly see green hydrogen playing an important role in this mix of solutions. It’s not the only solution at all, but it’s clearly part of the mix.

Being more specific, why we are in this project and why we have adopted green hydrogen in one of our hotels, I would say it is because of two reasons.

we clearly see that green hydrogen is going to play a role and looks very promising

One of the reasons is the responsibility that we share to be part of the efforts to make such a solution competitive. As you might know, one of the main challenges of green hydrogen is basically production, so we want to be part of the efforts to reduce the cost of generation of this green hydrogen. We need to learn and we want to contribute to this learning process.

And the second reason why we are in this trade, is because we clearly see green hydrogen as an important solution in some challenging locations that we might have. If the hotel is connected to the grid, green hydrogen, in our opinion, and for us, for Iberostar, is not such a great solution.

But of course we have hotels and resorts that are completely isolated from the grid, and in those cases we want to decarbonise. We clearly see green hydrogen as an alternative for us.

What potential do you see in hydrogen to decarbonise the travel and tourism sector?

Álvaro: Regarding the travel and tourism sector, we clearly see that green hydrogen is going to play a role and looks very promising, a promising vector for decarbonisation in ferries, cruises, and long haul coaches. In this kind of transportation, we see that it has great potential.

More in line with hotels, which is our core business at Iberostar, we really see that for those resorts that are isolated, that are running on standalone energy systems, green hydrogen, together with battery storage and with renewable electricity, is clearly one of the main solutions.

This is the world’s first hydrogen hotel - how will you bring it to fruition?

Álvaro: The main goal of introducing green hydrogen in this hotel is to decarbonise the operations of this hotel, to have a zero emissions hotel. We’re going to be achieving this in two ways.

The first is that we’re going to be installing, we are already in the process of installing, this green hydrogen fuel cell. This fuel cell is going to be providing roughly 50% of the energy consumption of the hotel in an emission-free manner.

And for the remaining part of the emissions of the hotel, through our participation in the Green Hysland project, we’re going to be acquiring renewable gas certificates because green hydrogen is also going to be injected into the distribution grid and we’re going to be purchasing these certificates to offset the remaining emissions from the energy consumption of this hotel.

On a human level, what behaviour changes need to take place to bring the best out of this technology?

Álvaro: Yeah, it is a critical and very important question, because the risk is that you might invest money in state-of-the-art technologies, but if you don’t train your personnel to operate those machines in a good manner, then you might not be getting all the benefits that you expect.

So in the case of the green hydrogen fuel cell, we really need the technical personnel to get familiarised in the operation and maintenance of the equipment because it’s very innovative equipment, it’s very new, and of course, they don’t know how to operate it and to maintain it, and this of course, this requires training, as I said.

The main goal of introducing green hydrogen in this hotel is to decarbonise the operations

So regarding operation, the technical personnel need to operate the fuel cell to maximise its lifetime, and also to produce electricity in those hours where the market prices are higher, so we also reap some economic benefits there.

How can others then learn from what Iberostar Group is doing to decarbonise the travel and tourism sector?

Álvaro: We are learning a lot during this process of decarbonising our operations, and we want to inspire others. We want to really share and be open with the learnings.

It is for that reason that we have partnered with the World Travel and Tourism Council and Harvard to produce a case study outlining our approach to decarbonisation and the lessons learned and challenges that we have faced.

To summarise really quickly, what I would say here regarding what we can share with other companies, is that it is critical to create a corporate environment that facilitates decarbonisation, and this means working more horizontally, just going beyond the silos and the typical silos that you can find in corporations, and also having the right sustainability governance in place.

Álvaro Sánchez Sustainability Product Director, Iberostar

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