Hydrogen has a wide range of applications and can be used in a variety of industries.

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Hydrogen use by the G-7 could jump four to seven times by the middle of this century compared to 2020 to “satisfy the needs of a net-zero emission system,” according to a new report from the International Renewable Energy Agency.

In the foreword to the report, IRENA Director General Francesco La Camera said it had “become clear that hydrogen must play a key role in the energy transition if the world is to meet the 1.5°C target of the Paris Agreement.”

Despite these statements, IRENA’s analysis – published on Wednesday, during the COP27 climate change summit in Egypt – paints a complex overall picture that will require a delicate balancing act going forward.

Among other things, it was noted that “although hydrogen has great potential, it must be remembered that its production, transportation and conversion require energy, as well as significant investment.”

“Indiscriminate use of hydrogen can slow down the energy transition,” he added. “This requires setting priorities in policy making.”

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The first priority, said IRENA, relates to decarbonizing “existing hydrogen applications”. The second focuses on the use of hydrogen in “hard-to-reduce applications” such as aviation, steel, shipping, and chemicals.

The energy transition can be broadly seen as a shift away from fossil fuels to a system dominated by renewable energy. Given that it depends on many factors – from technology and finance to international cooperation – how the transition pans out remains to be seen.

A spokesperson for Hydrogen Europe, an industry association, told CNBC that IRENA “is true that large-scale infrastructure deployment and energy production requires large-scale investment, and it is true that it requires energy to produce, store and transport hydrogen.”

The spokesperson said Hydrogen Europe agreed “that any hydrogen-related project development must be undertaken in a responsible manner and certain use applications must be prioritized over others.”

“As for how to prioritize, we believe this should be done as much as possible through market instruments that properly value CO2 emission savings and other aspects (such as security of supply) so that consumers can make an informed choice,” they added.

Top-down dogmatic restrictions on certain sectors, such as hydrogen for heating, should be avoided, they said.

Hope for hydrogen

Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a wide variety of applications and can be used in a variety of industries.

It can be produced in several ways. One method involves electrolysis, in which an electric current separates water into oxygen and hydrogen.

If the electricity used in this process comes from a renewable source like wind or sun then some call it “green” or “renewable” hydrogen. Currently, most of the generation of hydrogen is based on fossil fuels.

In a statement published alongside its report, IRENA said the G-7 goal of net-zero emissions by mid-century would “require a significant deployment of green hydrogen.”

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Over the past few years, large economies and businesses have sought to capitalize on the burgeoning green hydrogen sector in an effort to decarbonize the way sectors integral to modern life operate.

During a roundtable discussion at last week’s COP27, German Chancellor Olaf Scholz described green hydrogen as “one of the most important technologies for a climate neutral world.”

“Green hydrogen is key to decarbonizing our economy, especially for hard-to-electrify sectors such as steel production, chemical industry, heavy shipping and aviation,” added Scholz, before acknowledging that a large number of jobs were needed for the sector. become an adult.

“Of course, green hydrogen is still an infant industry, its current production is too cost-intensive compared to fossil fuels,” he said.

“There is also a ‘chicken and egg’ supply and demand dilemma where market participants block each other, waiting for the other to make a move.”

Also present on the panel was Christian Bruch, CEO of Siemens Energy. “Hydrogen will be indispensable for the decarbonization of … industries,” he said.

“The question is, for us now, how do we get there in a world that is still being driven, in terms of business, by hydrocarbons,” he added. “So it takes extra effort to make the green hydrogen project… successful.”

Green hydrogen can help us reduce our carbon footprint, if we overcome some major hurdles