UK Lawmakers Cautious About Hydrogen's Role in Achieving Net-Zero Emissions

A report from a prominent committee of British legislators has suggested that hydrogen may have a limited role in the U.K.'s transition to a net-zero economy. It is likely that hydrogen will only be used in certain industries.

The House of Commons Science and Technology Committee determined that, while hydrogen has some appealing qualities, the evidence they received suggested that, with current technologies, it is not a cure-all.

The report, which was released on Monday, suggested that as the UK works to become a Net Zero economy, hydrogen could be used in certain areas to reduce carbon emissions when other technologies such as electrification and heat pumps are not feasible, practical, or cost-effective.

The International Energy Agency has labeled hydrogen as a "versatile energy carrier" due to its many uses and its ability to be used in a variety of industries.

A way to generate hydrogen is through electrolysis, a technique that utilizes an electric current to separate water into oxygen and hydrogen.

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Hydrogen produced through electrolysis is often referred to as "green" or "renewable" if the electricity used in the process is sourced from renewable energy sources like wind or solar. However, the majority of hydrogen production today is still derived from fossil fuels.

A report released on Monday attempted to manage expectations regarding the potential of hydrogen to reduce emissions and facilitate the shift to a carbon-neutral economy.

In order to make a major impact on reducing greenhouse gas emissions in the UK, there needs to be significant progress in the economical implementation of CCUS (carbon capture, utilization and storage) and/or the growth of renewable-to-hydrogen capacity, according to the report.

It is difficult to predict when hydrogen will be able to make a significant impact on reducing greenhouse gas emissions in the UK, so it would be unwise to assume that it will be able to do so in the near future.

Greg Clark, the chair of the committee, noted that there are "substantial infrastructure issues related to changing our energy systems to use hydrogen and doubt about when low-carbon hydrogen can be produced in large quantities at a reasonable cost."

Clark noted that hydrogen has significant uses in certain industries, and as one witness to the inquiry put it, it can be a "big niche".

Hydrogen Europe, an industry group, did not provide an immediate response to a request for comment from CNBC.

In recent times, large economies and companies have been turning to the developing green hydrogen industry to reduce the carbon footprint of industries that are essential to our daily lives.

At the COP27 climate change summit last month, German Chancellor Olaf Scholz declared green hydrogen to be a critical technology for achieving a carbon-neutral world during a roundtable discussion.

Green hydrogen has the potential to reduce carbon emissions in many industries, particularly those that are difficult to electrify, such as steel production, the chemical industry, heavy shipping, and aviation, according to Scholz. He also noted that a lot of work is necessary for the sector to reach its full potential.

He noted that green hydrogen is still in its early stages and is too expensive to produce when compared to fossil fuels. Additionally, there is a "chicken and egg" problem where market participants are waiting for one another to make the first move.

Christian Bruch, CEO of Siemens Energy, was also present on the panel. He expressed that hydrogen will be essential for the decarbonization of industry.

He posed the inquiry of how we can reach a world that is still largely powered by hydrocarbons in the business sector. To make green hydrogen projects successful, it will take an extra effort.