The widely shared goal of reaching net zero by 2050 may have become, for some, too comfortable—far enough away to feel that no immediate or decisive action is required. A recent finding by the UN’s environmental agency stated there is no credible pathway to 1.5°C in place. But as we look ahead to next year, we can expect a shift in mindset with the recognition that delivering on climate ambitions needs action and needs it now.
The use of hydrogen for heavy-duty transport is a case in point. According to analysis by the IEA, transportation accounts for more than 20pc of global carbon emissions. Of course, significant advances have been, and continue to be, made in the use of hydrogen as a transportation fuel. However, 2023 will require an acceleration across the sector to ensure that green hydrogen can be delivered at scale.
For Air Products, as we are the world’s largest hydrogen supplier, this is a market that we are focused on. We have more than 60 years of experience of safely supplying customers around the world and have been involved in more than 250 hydrogen refuelling projects in 20 different countries. Drawing on this global experience and insight, we have identified three core areas of focus in the year ahead: supply, infrastructure and support.
Let us start by considering supply. There is universal recognition that we are facing an energy supply shortage. This is felt particularly keenly in Europe, with plans including RepowerEU, the European Green Deal and the European Green Hydrogen Strategy all setting targets for both domestic and imported green hydrogen. Specifically, RepowerEU’s ambition is to produce 10mn t/yr of green hydrogen while importing the same amount. These two sources of hydrogen should not be seen as in competition—the one complements the other, ensuring reliability of supply.
For the market to be truly viable, it needs to have confidence that the supply of hydrogen is both safe and reliable. This is something that we are investing heavily in. Our goal is to be the world’s safest industrial gas company, and we offer decades of experience in the safe delivery of hydrogen production and supply. To date, we have made an industry-leading commitment of at least $15bn for clean energy and hydrogen megaprojects. Thanks to those projects, we will be able to deliver more than 3,000t/d of renewable and low-carbon hydrogen—enough to fuel 100,000 trucks and buses—to the market within the next four years.
Our joint venture project in Saudi Arabia with Neom and state-affiliated Acwa Power is particularly exciting in this regard. It is based on 4GW of renewable electricity capacity from solar and wind sources. The energy will be used to produce renewable hydrogen that will be transported to terminals around the world. This may include Immingham in the UK (in partnership with Associated British Ports) and Rotterdam in the Netherlands (in conjunction with Gunvor Petroleum). These terminals can store large amounts of imported renewable energy in the form of green ammonia, complementing domestic production by ensuring green hydrogen is available ‘on demand’, regardless of local weather conditions.
But focusing on hydrogen supply next year will not be enough. In parallel, and to support full fleet decarbonisation, we must see a real drive to get widespread refuelling infrastructure in place that takes the hydrogen from central storage locations to the point of use.
What does this supply chain look like? We need look no further than diesel and petrol supply to know what we are aiming for—a reliable and dependable network of refuelling stations capable of supplying a large number of vehicles. This is what we need in place for hydrogen fuel.
Of course, this infrastructure development will not happen overnight. We have already seen progress in the hydrogen bus market; our hydrogen bus refuelling stations in the municipality of Hurth in Germany and for the Go-Ahead Group near Gatwick in the UK are good examples. It is particularly encouraging to know that the latter represents the largest renewable bus deployment to date in the UK.
The coming year needs to see continued progress in the bus market, but we also foresee a step change in the truck market which has, to date, lagged buses due to the timescales involved in vehicle development. We are confidently developing a high capacity, public-access truck refuelling station in Rotterdam along with a further station in Tarragona in Spain.
As interest from both bus and truck operators continues to grow, part of the conversation must be about the right mode of hydrogen supply. Here, our experience with projects, such as that with the Go-Ahead Group, is that liquid hydrogen technology brings significant advantages in terms of reliability, footprint and scalability. For the project near Gatwick, for example, we will initially be providing fuel to 54 buses, but the equipment can, in time, support a full depot conversion to serve more than 140 buses.
There is no doubt then that 2023 will be a pivotal year in terms of hydrogen supply and infrastructure investment, but the third and final piece of the jigsaw depends on policymakers. Without effective action from them, the picture will remain incomplete. This is where ‘support’ comes in.
We fully expect the focus to be on stimulating demand of clean transportation fuels if we are to meet our ambitious climate objectives and make a meaningful impact by 2030. If hydrogen is to become well established in heavy-duty transport, it needs support from governments.
Behaviour does not change without intervention, and so it is critical that regulators provide strong policies to encourage fuel switching, allowing for confident investment in clean hydrogen production and zero-emission vehicles. Strong mandates would, in our view, eliminate the need to subsidise production as potential suppliers would have assured offtakers. Nonetheless, we recognise the enthusiasm of governments is also needed to support production. We would, however, urge governments to ensure that production subsidies are constructed in a way that avoids market distortions. In particular, if local production is to receive subsidy support, imports should be eligible for the same support to ensure a level playing field. Failure to do this will result in market distortion, inefficiencies and higher costs.
We will also need a much more robust certification system. Users need to be fully confident that green hydrogen coming to market meets the highest standards. This system must be transparent, easy to understand and count towards national renewable energy obligations.
Deadlines are upon us, and the challenge ahead is all too real. However, with greater collaboration between governments, producers, OEMs and transport operators, hydrogen can, and will, provide a critical part of the solution. Work is under way, and the goal for 2023 remains the same—to drive and support the energy transition and ensure the vision of a fully decarbonised heavy-duty transport fleet is realised.
Caroline Stancell is the general manager of the industrial gases company, Air Products.
This article is part of our special Outlook 2023 report, which features predictions and expectations from the energy industry on key trends in the year ahead. Click here to read the full report.