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A host of energy companies and governments around the globe are backing green hydrogen as the next big renewable energy source. The fuel is highly popular as it can be used to decarbonise the transportation sector, which is notoriously hard to make clean. It could also be used in highly polluting industries. As 1kg of hydrogen contains around three times as much energy as 1kg of petrol, it is viewed by many as a super-fuel for the green transition. But despite much optimism around the energy source, some are now accusing companies of exaggerating the cleanness of green hydrogen when produced in certain settings.
Green hydrogen is typically made using clean energy from surplus renewable energy sources, like wind or solar power, to split water into hydrogen and oxygen through electrolysis. It differs from grey hydrogen, which is derived from fossil fuels. By the end of 2021, around 1 percent of global hydrogen production was green. The reason this figure was so low was due to the high costs associated with green hydrogen production, compared to grey or brown hydrogen production.
Following the recent COP climate summits, and the push from several governments around the world to move away from fossil fuels in support of a green transition, more and more companies are investing in green hydrogen projects. Energy firms are developing huge green hydrogen plants in various areas of the world, while governments and regional organisations are developing major transport corridors for the clean fuel.
While developing the green hydrogen industry sounds like a good way to cut carbon and produce clean energy, it is highly important to consider where this hydrogen is being made. Green hydrogen production requires vast amounts of water, which is fairly easy to supply in regions such as Europe and North America, but less so in areas of drought, such as the Middle East and parts of Africa. Producing green hydrogen in countries such as Saudi Arabia and Tunisia requires the large-scale desalination of seawater to provide water for the production process.
While Europe is currently leading in green hydrogen production, several countries in the Middle East hope to soon compete to become world leaders in clean hydrogen output. Meanwhile, energy companies are investing in projects in low-income countries, such as Tunisia, where they can produce the high-cost energy source for cheaper. This makes sense, apart from the fact that developing projects in arid countries may make the hydrogen less green.
The EU views Tunisia, one of the driest countries in Africa, as key to producing green hydrogen for export to Europe. It is easy to produce the solar power needed for electrolysis from the abundant sun rays available in the country, but it is less easy to source the water needed for the process. To acquire the water needed for green hydrogen production, companies must use and desalinate water from the Mediterranean Sea. However, a 2022 report for the Heinrich Böll Foundation showed that this is typically a dirty, energy-intensive, water-guzzling process. In Tunisia, it is thought that the degradation of marine ecosystems from the toxic sludge produced by desalination facilities would be irreversible. Further, it once again shifts reliance to some of the world’s poorest countries to provide energy for high-income countries.
At present, the EU’s green deal depends heavily on green hydrogen production in North Africa and Ukraine to deliver on its pledge to cut 55 percent of greenhouse gas emissions by 2030. Companies are setting up projects in low-income countries due to the high costs associated with producing green hydrogen. Until the EU or state governments can offer major subsidies to European projects, like those being seen under President Biden’s Inflation Reduction Act (IRA) in the U.S., firms are unlikely to be willing to invest in home-grown hydrogen projects.
While it is important to invest in renewable energy projects in low-income countries to help reduce reliance on fossil fuels, help develop their economies, and support a green transition, it is important to ensure that “green” projects promote strong ESG values and provide wholly clean energy. Calling a project green simply because it uses a green process to provide the end project when the earlier processes were polluting or detrimental to the environment or residents of a country, is a slippery slope to endorsing even more greenwashing in the energy industry.
To effectively develop the green hydrogen industry, governments across regions of the world with large freshwater sources must develop national policies that promote the development of the industry, as well as provide subsidies and favourable tax frameworks to encourage new green hydrogen projects. The rapid expansion of the sector and greater investment in innovative technologies will help drive down the high costs associated with green hydrogen, to ensure production is clean and make the clean fuel source more widely available.
