# Infosys POV 
Title: Energy Transition: Hydrogen for Net Zero 
Author: Infosys Consulting 
Format: PDF 1.7 

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 An Infosys Consulting Perspective By Sundara Sambasivam & Shivank Saxena Consulting@Infosys.com | InfosysConsultingInsights.com Energy Transition Hydrogen for  Net Zero 

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 Energy transition: Hydrogen for Net Zero | © 2022 Infosys Consulting 2 Energy transition: Hydrogen for Net Zero The pressure to reduce carbon emissions to achieve the target of net zero emissions by 2050  is ever-increasing. There is no silver bullet, no ‘one-size-fits-all’ solution to address this  challenge. At this point in time, there are many different energy sources with varying levels of  investment that are being explored and tested to enable our transition towards net zero.<|endoftext|>Hydrogen (H2) is one of the most abundant elements found in nature. For decarbonization of  the industry, it is considered a key component; opening new frontiers and complementing  existing solutions. This series of papers aims to share some interesting perspectives on this  sector, the associated challenges, and why it could play a significant role in the decarbonisation  agenda. Current limitations in tech, scaling challenges, and feasibility concerns are just some of  the reasons it has not yet been harnessed fully. However, hydrogen has significant potential to  manage this challenging journey towards net zero.<|endoftext|>

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 Types of Hydrogen Both the production source and process used define the hydrogen type. Below is a list of diverse hydrogen types produced today based on production method and source (The hydrogen colour chart, 2022).<|endoftext|>Energy transition: Hydrogen for Net Zero | © 2022 Infosys Consulting 3 

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 Energy transition: Hydrogen for Net Zero | © 2022 Infosys Consulting 4 MARKET OUTLOOK - Production & Economies  Production and demand outlook According to the 2021 Report of International Energy Agency on Hydrogen, only 0.49 Mt of  hydrogen was produced via electrolysis. Although this was only 0.5% of overall global  production, the outlook on green and blue hydrogen is promising. It has become an essential  element for any state policy on energy transition for net zero. By 2050, more than 80% of  production is estimated to be of green or blue hydrogen. Demand will primarily be driven by  power, transport, and industry where demand for green hydrogen has the potential to grow  200% by 2050.<|endoftext|>Figure 2: Global hydrogen production and demand outlook (Harnessing Green Hydrogen: Opportunities for Deep Decarbonization in India, 2022) 

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 Economic outlook The current hydrogen production costs from different methods are listed in Figure 3 (Hydrogen  Strategy: Enabling a low-carbon Economy, 2020). Coal and other fossil fuel-based production  is inexpensive at around 2 USD/kg. Prices increase by 10 to 20% when using carbon capture  and storage (CCS). Electrolysis powered by renewable energy (RE) is the most expensive at  5 to 10 USD/kg and is not currently a competitive price. This needs to decrease to at least 2  USD/kg or lower in the next decade to directly compete with fossil fuels as an energy source.<|endoftext|>There are several elements that would play a critical role in driving the cost of the end-to-end  supply chain of production and distribution. These include higher levels of innovation through research and development (R&D) and the right investment through disruptive digital  technologies like artificial intelligence, the Internet of Things, blockchain smart contracts,  certificates, and digital twin.<|endoftext|>Energy transition: Hydrogen for Net Zero | © 2022 Infosys Consulting 5 Figure 3: Hydrogen production costs by source and method  (Hydrogen Strategy: Enabling a low-carbon economy, 2020) 

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 Economic outlook Renewables and electrolyser costs drive green hydrogen prices and are both showing declining  trends. Electrolyser costs are expected to fall by 30% in the next ten years (Harnessing Green  Hydrogen, 2022). Industrial manufacturers like Siemens Energy and Linde have already started  setting up some of the world’s biggest electrolyser production facilities in line with the European  Union’s (EU) strategy (REPowerEU plan May 2022) for fuel diversification, which will need a 27  billion EUR direct investment in domestic electrolyser and distribution of hydrogen in the EU,  excluding the investment of solar and wind electricity (REPowerEU Plan, 2022).<|endoftext|>The US, on the other hand, has announced future investments of up to 9 billion USD from 2022  to 2026 through its ‘Infrastructure Investments and Jobs Act’ (García-Herrero et al, 2022). The  key difference is that US policy plans to use both blue and green hydrogen in the fuel mix, while  the EU views blue hydrogen as a temporary solution only. Based on policy support and market conditions, the industry will decide on a future roadmap.  Green credits and green hydrogen trading can turn many fossil fuel-dependent countries into  future energy suppliers. Various states and corporates are funding green and brown field  projects which have created finance opportunities for venture capital, underwriters, and  insurance firms.<|endoftext|>Energy transition: Hydrogen for Net Zero | © 2022 Infosys Consulting 6 Figure 4: Renewables and electrolyser cost outlook (Harnessing Green Hydrogen, 2022) 

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 Economic outlook Energy transition: Hydrogen for Net Zero | © 2022 Infosys Consulting 7 Figure 5: Renewables and electrolyser cost outlook (Harnessing Green Hydrogen, 2022) 

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 Figure 6: Hydrogen value chain opportunities Hydrogen Value Chain Opportunities Figure 6 outlines the end-to-end value chain from production and electrolyser plant setup, operations  in conjunction with RE parks, storage (long- and short-term), distribution (liquified or gaseous), and  consumption applications (power, transportation, and industries). It gives an overview on the current  usage of Hydrogen in industry applications. New emerging areas where significant opportunities exist  for growth are primarily transportation (heavy duty vehicles and shipping), long-term energy storage  (sub-surface), and green ammonia (production and energy carrier).  Hydrogen can contribute directly to decarbonising the biggest polluters like steel, refineries, and  ammonia production. Although Hydrogen has a clean burn, its production is not clean. Hydrogen  production from fossil fuels resulted in 900 Mt CO2 emissions in the year 2020 (Global Hydrogen  Review 2021, 2021). High demand for green and blue hydrogen and hydrogen-based fuels could  reduce up to 60 Gt of CO2 emissions between 2021 and 2050, accounting for a reduction of 6% of  total cumulative emissions (Hydrogen, 2022).<|endoftext|>Some of the biggest polluters in the transportation sector include long-haul freight, heavy-duty  vehicles, maritime, and jet fuel. Decarbonizing them is not easy. By 2050, green ammonia can meet 25% of shipping fuel demand to meet the International Maritime Organization’s goal of reducing CO2  emissions by 50% from 2008’s levels. Hydrogen fuel cells can gear up short distance rides such as  ferry journeys (Harnessing Green Hydrogen, 2022). With air travel growth, a significant carbon  footprint increase is expected in aviation which already has the highest carbon emission intensity.  Options like hydrogen fuel cells, hydrogen turbines, and hydrogen-based electrolytic synthetic fuel  exist to decarbonize aviation, but each option has its merits and demerits. Big corporations like Airbus  or start-ups like ZeroAvia have already presented their roadmaps for a hydrogen-based carrier in the  next decade.<|endoftext|>For building, hydrogen can be blended into existing gas networks for both residential and commercial  complexes. It can also be used by boilers and fuel cells. Its biggest promise is in long-term energy  storage. This will impart stability to renewables-based generation and grid operations. Today, new gas  turbines can also use hydrogen as a fuel component.<|endoftext|>Energy transition: Hydrogen for Net Zero | © 2022 Infosys Consulting 8 Opportunities for the industry 

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 What’s next? In our next articles, we will discuss  the challenges of this emerging  sector, some exciting industry  projects underway around hydrogen,  support, and digital solutions  needed to help pave the way to net  zero.  Infosys Consulting