LatAm H2 - The Growing Importance of Low-Carbon Hydrogen in Latin America

Issue link:

Contents of this Issue


Page 1 of 11

LatAm H2: The Growing Importance of Low-Carbon Hydrogen in Latin America | September 2022 2 THE COMING HYDROGEN RENAISSANCE As the world increasingly commits to climate action, and governments and companies pledge net-zero emissions by or before 2050, it is clear that the demand for hydrogen – an essential element of a low- carbon economy – is going to dramatically increase in industrial and consumer sectors across the globe. As both an energy storage mechanism and a fuel source, hydrogen has long had its supporters, but for decades they have been on the margins of energy system futurism. A number of factors have held off the global market from maturing, including the cost differential of hydrogen compared to fossil fuels (on an equivalent calorific value basis), the need for a significant infrastructure build-out, and the repeated cycles of hydrogen hype throughout the 20 th century that failed to gain traction. Furthermore, the development of renewable hydrogen (e.g., blue, green, aqua, red) is reliant on the scaling of adjacent renewable technologies, such as wind, solar and nuclear power. Globally, a number of advances over the past decade indicates a coming hydrogen renaissance with significant staying power, supported by strong demand. These advances are particularly evidenced by a reduction in renewable power production costs, an increasing pressure to decarbonize economies, and a global diversification of energy supplies due to geopolitical supply/security concerns. Demand is expected to grow exponentially in the coming years, especially for hard-to-abate industrial sectors. Heavy polluting, fossil-fuel reliant industries such as mining and production of steel, cement, aluminum, fertilizers and petrochemicals, account for 30% of total global carbon dioxide emissions and 34% of total global methane emissions, according to the latest data from McKinsey & Co. The steel sector alone accounts for 7-9% of all fossil fuel emissions. It is in these sectors that hydrogen is gaining the most momentum. Hydrogen also has a considerable role to play in energy storage and in the transportation sector, in particular with heavy duty vehicles. In the near future, hydrogen will complement lithium-ion batteries. Batteries will be used for short-term needs and where the mobility and compact form factors of the technology are of paramount consideration. Meanwhile, hydrogen will be used for long-duration energy storage, whether for the next week or the next season. Some hydrogen use cases will likely transcend the time gaps, particularly in the long-haul transportation sector. Pushing the envelope are firms like the European aircraft manufacturer Airbus, which intends to have hydrogen-fueled aircraft in service by 2035. HYDROGEN DEMAND IS EXPECTED TO GROW RAPIDLY (Million tons (Mt)/year)

Articles in this issue

view archives of Energy - LatAm H2 - The Growing Importance of Low-Carbon Hydrogen in Latin America