Fuels of the future, the hydrogen prospect


Hydrogen is one of the solutions to think about for the energy mix we will have to adopt in the coming years and has the potential to make a decisive contribution to meeting European targets for reducing climate-changing gas emissions. The industrial sector can consider these possibilities that are already technologically feasible albeit on a step-by-step path.

In terms of combating climate change, one of the most urgent and challenging goals concerns the abatement of emissions of climate-altering gases, or so-called greenhouse gases (GHGs). Over the past three decades, initiatives taken in Italy, for example, have brought down the emission of about 100 million tons of CO2 equivalent, with an average of 3 million tons per year, but much remains to be done. Especially considering the targets of the PNIEC (national integrated energy and climate plan)-which currently calls for a 37 percent abatement of CO2 emissions and thus to have an additional 90 million tons to beat compared to 2019-to which are added the more ambitious targets of 55 percent of the «Fit for 55» package and 51 percent of the NRRP (national recovery and resilience plan). All this implies an additional effort to 2030 with an emission reduction of 160 million tons of CO2 eq. This is explained by Andrea Pisano, head of hydrogen initiatives at ENI, in reporting this data at the Miac Energy 2021 conference. He calls it a feasible but very challenging target, in which industry is also involved-primarily sectors such as paper, steel and chemicals. And indeed, he points out that the challenge lies mainly in the industrial sector, which, out of total emissions of 418 MtonCO2 eq, accounts for about 20 percent, split between emissions from energy consumption (12 percent) and directly related to industrial processes (8 percent).

The levers of change

Two primary levers can be identified: energy efficiency and electrification from RES (renewable energy sources). The former because it allows the best and most rational use of an essential but very expensive raw material for companies such as energy, the latter because it represents the most efficient way to produce energy.

However, there is a need to diversify, and alongside these primary levers, other avenues toward reducing climate-changing emissions have been identified: the circular economy, CO2 capture and utilization, i.e., CCS (carbon capture and storage), the use of low-carbon gases, such as biomethane, and, of course, hydrogen.

The watchword for the future is energy mix: to believe that any one solution alone will be sufficient to achieve the targets set would be a mistake.

The colors of hydrogen

Hydrogen can offer us important opportunities precisely in view of the 2030 targets. It is an energy carrier, a compound that can carry energy from one form to another, and, as Riccardo Bernabei, head of origination and project delivery, BU Hydrogen at Snam, also speaking at the Lucca conference, explains, it can have various colors that are used to identify the carbon intensity or primary energy needed to produce it. Currently, hydrogen is mainly used in heavy industry as a reducing agent and is a gray energy. But it is also used in other sectors to replace gas or diesel, as, for example, in the paper industry. The goal is to convert it to green energy. The current issue is related to its costs, which, according to data reported in October 2021 by Bernabei-therefore excluding the high increases in gas and electricity prices that have occurred in recent months-were between 5 and 6 €/kg, which in energy translates into about 100 or 105 €/MWh. A lot depends, of course, on how well the energy sources to produce it will develop in the future as well and how competitive they will become. The hydrogen production process for electrolysis also has a lot of room for optimization, and this, coupled with its increased scalability, will contribute to reducing the cost of hydrogen. Not to mention further improvements on the technological side to achieve even higher efficiencies.

So to bring, as Bernabei says, hydrogen to the end user, there is still a long way to go and a step-by-step approach will be needed.

Step-by-step path

The first and quickest to implement is that of local green hydrogen production, meaning that it is close to demand. Bernabei explains that clusters of different types of hydrogen users are being sought, from mobility to industry, mainly alongside energy sources. There are already projects around the world for renewable resource installations, and infrastructure connections will be made. Initially there will be a mixed situation of using natural gas and hydrogen, but by 2030 it is envisioned that infrastructure will be built exclusively on hydrogen. It will require substantial investment but also strong political support from national and European institutions. As for Italy, the goal is to reach 2 percent of hydrogen’s share in the final energy consumption mix by 2030, with the prospect of increasing it to 20 percent in 2050. While the installed capacity of hydrogen production from electrolysis is expected to reach 5 GW by 2030.

Precisely to succeed in promoting the transition to these forms of energy will also require the collaboration of all players involved in various capacities, with partnerships along the value chains, both on the renewables side and on the technology side, both upstream and downstream. Snam for example is working together with some turbine manufacturers in order to increase hydrogen utilization rates and thus implement a roadmap. Similarly, it has initiated strong investments in electrolysis.

A collaboration that Eni also emphasizes, explaining how the acceleration on hydrogen use and, more generally, on decarbonization must involve the entire value chain. You cannot move production alone, but you have to dialogue, understand and define well the development needs of each sector, the technological risks, the impact in terms of product quality. Only then can a path to decarbonize the industry be established together.

All the colors of hydrogen

This will be a gradual transition, which is why even in the Preliminary Hydrogen Guidelines that Italy has – another gap to be filled, Pisano adds, given the lack of an official strategy present instead in many other countries – reference is made both to importing hydrogen and to producing hydrogen from natural gas with carbon capture, the so-called blue hydrogen. This is an option that should not be underestimated, because it manages to cover some consumption and needs that green hydrogen cannot cover to date and is an option in the short term to ensure the switch while maintaining a stable supply. In essence, blue hydrogen to date is an enabler both in terms of cost and continuity of production. This does not mean not investing in green, Pisano points out, but rather doing so in parallel, especially as long as green hydrogen is still so expensive; cost reduction is assumed but at 2030. Blue hydrogen also represents an additional element in reducing CO2 emissions and reducing risks, as it helps in the diversification of energy sources to draw on. Also in Italy, the production capacity of hydrogen is currently about 871 thousand tons per year (2019 figure).

Certainly, that of hydrogen is a market that needs to be stimulated and supported-like all low-carbon or zero-emission carriers and fuels-both demand-side and production-side. Demand must be stimulated by encouraging the industry to invest in switching, for example, from the use of natural gas to hydrogen; but these are investments that often require a great deal of risk exposure, and for this reason government support and assurance on the feasibility of these operations is needed.

On the other hand, production must also be stimulated with incentives, at least in the initial phase, and especially until the market recognizes the environmental benefit of the product being brought to market. Incentivizing a mass production phase will enable a market that then becomes self-sustaining and capable of standing on its own, with its own economic sustainability, Pisano explains. At the moment for example, the main component of operating expenses, especially for gray hydrogen, is the cost of electricity; these need to be addressed with supports.

Paper and hydrogen

Industrial clusters, such as the paper industry, by their very nature lend themselves to being the ideal contexts for the transition to hydrogen as they can exploit their geographic concentration for this purpose and have economies of scale, sharing a collective effort and acting with partnerships within the sector. To this end, Bernabei reminds us, there are several opportunities, some of them represented by the recovery plan that has set aside 3.2 billion euros for applications in hydrogen, including 2 million euros for the so-called «hard to abate» sectors, or energy-intensive sectors where it is more difficult to cut GHG emissions. Then there are sources dedicated to technology start-ups, to the application of hydrogen to rail and road mobility, with several funding opportunities at the government and European level, not only within the recovery plan.

From the creation of initial cores of self-consumption where production and consumption converge, we will gradually move to a more interconnected and global market with an infrastructure network, Pisano adds. So-called «hydrogen valleys» represent an ecosystem that is an enabling element in this transition.

Decarbonizing with biomethane

Still on the topic of decarbonization but dealing with a different energy source of great interest to the paper industry, on Feb. 10, 2022, Assocarta and the Italian Biogas Consortium (CIB) signed a collaboration agreementaimed at supporting the conversion of existing biogas plants to biomethane and developing new initiatives for biomethane production from the agro-industrial supply chain. The aim is to boost the decarbonization of energy-intensive production cycles, in line with the RED 2 directive and the NRRP (national recovery and resilience plan).

«Biomethane represents a great opportunity to meet environmental goals and reduce dependence on fossil fuels. Only by joining forces can we help start an ecological transition process for the country that is quick, efficient and inclusive, while preserving the competitiveness of companies» said Angelo Baronchelli, vicepresident of CIB, emphasizing the closeness of intent to meet decarbonization goals between biomethane-producing farms and the paper industry.

The paper industry, Assocarta President Lorenzo Poli recalled, has improved its energy efficiency by 20 percent over the past 15 years through the use of gas in cogeneration. «Therefore, increasing the use of Made-in-Italy biomethane in our cogeneration plants means moving forward on the road to ecological and energy transition».