Timo Snoeren: Hydrogen’s “Net-Zero” Future

The fact that hydrogen is a naturally occurring element that can be produced in a clean and green way is no secret. Although it cannot be the only solution, hydrogen has great potential to reduce carbon dioxide emissions in industry, as well as to power vehicles, heat homes, etc. Current production methods of green hydrogen, compared to blue, pink or gray hydrogen, are still expensive today, and there is still a lack of hydrogen fueling station infrastructure as well as vehicles. Consequently, hydrogen will become even more valuable when its production methods are more energy efficient. On the way to green and 100% sustainable hydrogen, various alternative and intermediate production methods have emerged, each trying to reduce CO2 intensity. Thus, in addition to green hydrogen, there is a difference between gray hydrogen (also: black, brown), turquoise hydrogen, pink hydrogen (also: yellow) and blue hydrogen.

The production of hydrogen is difficult without sufficient power supply; therefore, it is critical to build power generation facilities for this process. In 2012, 98% of the hydrogen produced worldwide came from fossil natural gas, and the steam reforming process causes CO2 emissions and entails costly carbon capture. Fortunately, research with more efficient and clean energy sources such as solar and wind power continues to develop at a rapid pace – just in time to support growing industrial applications for hydrogen. In this area, policymakers are called upon to act urgently when it comes to accelerating approval procedures for investments in the expansion of renewable energy generation. Only in this way can Austria reduce its dependence on fossil fuels more quickly.

Austria’s National Hydrogen Strategy, presented in June 2022, came rather late and was not thought through to the end. Rightly, the energy-intensive industries were identified as the top priority for decarbonization, but hydrogen mobility – especially distribution trucks, passenger cars, long-distance trucks and coaches – was identified as lacking efficiency (see below Figure 1: Source FFG). In our opinion, this is too short-sighted. The global organization “Hydrogen Council” has a similar view and has identified major advantages for the transportation sector in hydrogen. However, these advantages first become viaable in 2030 (see Figure 2: “Hydrogen Supply Chains / Hydrogen Demand” below). As a result, Austria could potentially miss out on billions of dollars of investment, as there are few incentives for companies to invest in hydrogen refueling stations and vehicles. Without investment security, and especially without uncomplicated access to subsidies, Austrian companies will not develop an appetite for hydrogen.

Johannes Schneider, an expert for industrial goods and energy supply companies at Strategy & Austria, has a similar view (see profile article): “With the volumes that can currently be safely sold, green hydrogen cannot yet be produced at competitive prices. This in turn discourages large-scale consumers from converting their plants and also prevents investments in large-scale electrolysis plants. Solving this chicken-and-egg problem is a prerequisite for helping the hydrogen economy achieve a breakthrough in Austria,” says Schneider.