Things hasn’t been the most positive for hydrogen the past 2 years or so. Hyzon Motor is on the verge of ‘giving up’, while When one look back, it is a wonder why we felt comfortable ignoring some of the bigger problems associated with hydrogen. It is definitely less ‘trendy’ to tout hydrogen as the solution for the energy transition these days.
One of the challenge about the climate and energy transition is that it is a transition. And that means there is going to be change happening over time; and the challenge is that we don’t really know what the end point is in terms of the technology and pathways even when we know that we’re trying to have a go at net zero.
In the meantime, as we struggle to determine what we’ll use to fuel our aircrafts or vessels, we are making decisions on replacing these equipment, and trying to project cashflows over an asset lifespan or 20-30 years. These all without the certainty of the fuel being available is extremely challenging. So instead, we are more likely to bet on things not changing rather than things changing.
Hydrogen continues to face an uphill battle when it comes to the science, the technology and economics. But there is still good reasons for us to continue refining the technology we have. In the mean time, while we are still trying to decarbonise what we can, we try to leverage the resources that are available more immediately. We can optimise our biofuel supply chains more to achieve lower carbon intensity. Along that journey, we can improve our traceability of feedstocks and biofuel supply chains.
Now, biofuels or any of the new fuels will never be as ‘cheap’ as fossil fuel. And just because they are chemically almost equivalent to the hydrocarbons we dig from the ground doesn’t mean they are the same. This means we will have to continue working at pricing carbon and allowing the real price of carbon to hit all of us. Governments can protect the economically vulnerable not by blocking the transition but ensuring that more and more of that carbon revenues gets directed to support the vulnerable who may not be able to deal with the cost from the transition.
Biofuels could even be a commercialisation pathway for green hydrogen as the hydrogen can contribute to boosting the biofuel yields of organic feedstocks in the FT-Gasification pathway and improve the overall economics of the project when there is access to cheap renewable electricity. It’s almost like blending e-fuels into the mix already. This is a plausible intermediate step for us to encourage more green hydrogen production to sufficiently create more scale to bring down the costs.
The technology surrounding logistics for hydrogen then needs to improve before the end-use equipment would transform. Changing end-use equipment is still the hardest to do. Even if it’s just the heavy industrial users who have to change.
So the good news is that we may still eventually land on hydrogen in some shape or form. It may not be what we are envisioning now, but it’s vital to recognise that the time horizon is probably a lot more stretched out than we think.