The World Business Council for Sustainable Development (WBCSD) and 20 member companies today unveil a set of essential policy recommendations to accelerate the deployment of hydrogen with the lowest possible carbon intensity and create a global hydrogen market.
The policy recommendations have been developed to help policymakers create enabling policies and a stable investment environment for hydrogen with the lowest possible carbon intensity.
Hydrogen is widely used in the fertilizer, refining and chemical sectors, with 70 million tons produced annually. Additional uses of hydrogen to support the decarbonization of the energy system could grow to 800 million tons annually, meeting an estimated 15-20% of final energy demand by 2050.
Therefore, hydrogen has a vital role to play in driving forward the energy transition to a net-zero carbon future and fulfilling the 1.5-degree scenario by 2050, as outlined in the Paris Agreement.
There is strong momentum behind the global effort to rapidly increase uses for clean(er) hydrogen. Despite this, the costs remain high, making it difficult for businesses to commercially justify the use of decarbonized hydrogen. In addition, the existing uses of “grey” hydrogen, which is derived from unabated steam methane reforming and produces significant greenhouse gas emissions, also need to be decarbonized.
To address these issues, the WBCSD and 20 leading businesses propose the following policy frameworks to governments worldwide to overcome the initial cost and implementation barriers, and support the acceleration of decarbonized hydrogen:
- Set clear targets and a prioritized roadmap for hydrogen deployment, associated renewable energy and, where opportunities exist, carbon removal options to enable net-zero emissions (such as carbon capture and storage or nature-based solutions).
- Put a price on carbon to ensure the pricing of externalities (such as greenhouse gas emissions) into more carbon-intensive fuels, improving the relative economic attractiveness of hydrogen.
- Support the emerging market and both the production and the demand side until projects become economically attractive. Those support mechanisms should reward hydrogen projects according to their capacity to enable both the targets and the pace of decarbonization required to meet a 1.5-degree scenario, as well as economic viability, scalability, and long-term sustainability. This relies on understanding the full life-cycle carbon intensity of hydrogen production and consumption, and WBCSD proposes in the full report a taxonomy of steppingstones towards net-zero consistent hydrogen.
Claire O’Neill, Managing Director at the WBCSD, commented: “The deployment and rapid scaling up of decarbonized hydrogen will be crucial to helping countries and businesses alike meet their net-zero emissions commitments by 2050. This will involve a transformation of the energy system, with increased deployment of renewable energy and carbon removal mechanisms to enable decarbonization on a pathway consistent with a 1.5-degree scenario.
“It will also require unprecedented collaboration between the industrial, transport and power sectors, as well as between private and public entities, to overcome challenges. It will also require policymakers to take steps to create a stable investment framework that will accelerate hydrogen deployment and uptake, creating numerous opportunities for employment and economic development along the way. The time to transform is now to achieve the goal of all people living well and within planetary boundaries by mid-century.”
The full report outlining the detailed policy recommendations for governments can be accessed here.