Hydrogen Could Clean Up Iron, Steel, And Chemicals – If It’s Truly Clean

Industry’s Clean Energy Transition and the Role of Clean Hydrogen

Introduction

Co-written with Nik Sawe, a Policy Analyst, Industry at Energy Innovation, a nonpartisan energy and climate policy think tank.

Industry will be the United States’ largest greenhouse gas-emitting economic sector by 2030, but the sector’s clean energy transition has received less attention, lagging behind the transportation and power sectors. Clean hydrogen could be the solution to some of industry’s biggest emissions challenges, but only if judiciously produced and used. If not, it could delay or reverse progress on cleaning our economy.

The Role of Iron, Steel, and Chemicals Industries

Two industries – iron and steel, along with chemicals – are the sector’s leading sources of carbon emissions, accounting for around 8 percent and 5 percent of total global emissions respectively. Because they are considered technologically challenging places to reduce emissions, iron, steel, and chemicals have frequently been glossed over despite their considerable impact.

Policies and Incentives for Clean Hydrogen

Thanks to increased federal and state incentives, advocate attention, and policy support for clean hydrogen, reducing greenhouse gas emissions from these industries is finally becoming economically and technologically feasible.

The Inflation Reduction Act’s 45V clean hydrogen production tax credit intends to promote the production of clean hydrogen by offering a robust subsidy of up to $3 per kilogram of hydrogen. The Internal Revenue Service and Treasury Department have proposed regulations that follow the European Union’s “three pillars” approach to clean hydrogen production.

Ensuring Truly Clean Hydrogen Production

Electrolyzers must use power from new clean energy resources that can physically deliver their electricity during the same hours when it’s being generated. This ensures the production of truly clean hydrogen, rather than relying on fossil fuel power plants to meet the added demand from hydrogen electrolyzers.

The Challenge of Suboptimal Uses of Hydrogen

The $3/kg subsidy for clean hydrogen production has drawn attention and resources towards suboptimal uses of hydrogen, such as powering vehicles or heating buildings. These applications can be more efficiently decarbonized through electric alternatives. Without a high subsidy, hydrogen cannot compete with electric alternatives in these applications, delaying the deployment of better solutions.

The Importance of High-Value Uses in Iron, Steel, and Chemical Production

Focusing on meeting the needs of high-value uses in iron, steel, and chemical production can create a long-standing and sustainable hydrogen industry. Clean hydrogen can help clean up processes that are difficult or impossible to electrify in these industries.

Reducing Investment Risks and Ensuring Market Opportunities

Policymakers can reduce investment risks by requiring steel and chemical producers to make cleaner products over time. Government actors can also create a market for greener materials by setting limits on carbon emissions from the production of materials used in public works projects. Programs like advance market commitments can provide certainty to investors and cut costs for the entire sector.

Conclusion

Clean hydrogen is a key piece of tackling the industry sector’s most difficult challenges. However, securing its emissions reduction benefits requires careful application of policies and incentives to ensure that hydrogen production is truly clean and applied to uses where it will be competitive long term. Otherwise, hydrogen risks worsening climate pollution and delaying our transition to a clean economy.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 13: Climate Action

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7.2: Increase substantially the share of renewable energy in the global energy mix.
• SDG 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
• SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for SDG 7.2: Share of renewable energy in the total energy consumption of the industry sector.
• Indicator for SDG 9.4: Adoption rate of clean hydrogen technologies in the iron, steel, and chemical industries.
• Indicator for SDG 13.2: Number of policies and regulations implemented to promote clean hydrogen production and use in the industry sector.

Table: SDGs, Targets, and Indicators

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Fuente: forbes.com

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