US seen lagging in hydrogen investment, deployment as long-term vision lacking

Hydrogen is increasingly being viewed as a key element to decarbonizing the most emissions-intensive industries, yet the US is falling behind the curve in growing this market compared with its European and Asian counterparts, panelists said during a March 9 webinar held by the Resources for the Future think tank.

"Other countries are moving forward aggressively to develop hydrogen economies," said Linda Dempsey, vice president of public affairs at CF Industries, a leading global manufacturer of hydrogen and nitrogen products. "We see hydrogen investment in Europe, Asia, and even Australia and New Zealand outpacing investment in the United States."

Those countries have put forth national roadmaps that provide certainty and specific policies for increasing hydrogen production and demand and made available substantial government funding to spur industry activity, Dempsey said. "The United States, however, is behind the curve."

The Department of Energy has laid out near-term and longer-term approaches for accelerating deployment of hydrogen technologies that span across the hydrogen value chain, including production, delivery, storage, conversion, and end-use applications, Sunita Satyapal, director of DOE's Hydrogen and Fuel Cell Technologies Office, said during the webinar.

She also pointed to specific targets DOE has set that would make hydrogen competitive with incumbent and emerging technologies. Those include achieving $2/kg for hydrogen production, delivery, and dispensing for transportation applications and $1/kg for industrial and stationary power generation applications.

Dempsey applauded those efforts but contended that, without "a government-wide roadmap, a long-term vision on which industry can rely," and a funding boost in line with other countries' spending and the resources the US itself put toward deploying wind, solar and electric vehicles, the hard-to-decarbonize industrial sectors of the US will continue to rely on natural gas and hydrocarbons for energy use.

Existing infrastructure

Although currently lagging, panelists agreed that the US is well-positioned to take advantage of the economic and environmental benefits that hydrogen could offer as a clean fuel and industrial feedstock.

Kristine Wiley, director of the Gas Technology Institute's Hydrogen Technology Center, asserted that an essential piece to enabling a low-carbon future will be leveraging the country's massive and existing energy infrastructure to usher in the more complex energy system of the future.

"So while there may be some challenges, repurposing natural gas infrastructure to transport hydrogen is feasible, and analysis by European transmission operators suggest that it will be much more economical than building new dedicated infrastructure," Wiley said.

She highlighted the need for more study into the potential for hydrogen embrittlement and other pipeline limitations that would need to be established, and urged the Biden administration to consider increased research and development funding, public and private partnerships, and "really laying a foundation for policies to help to de-risk investments being made to enable hydrogen-based solutions."

"I think we all recognize this isn't going to happen overnight or without some challenges, but it's really up to us to help do the necessary research and develop those solutions to take advantage of this massive, well-developed infrastructure with a high energy transportation capacity," Wiley said.

Opportunities

Dempsey cautioned against policies that could interfere with US manufacturers' ability to compete in the global arena, saying the US must be careful "so that decarbonization does not result in deindustrialization."

If US manufacturers, particularly those in energy-intensive, trade-exposed industries that are often "the most efficient of their type in the world," are lost, "the US would be effectively increasing global emissions, what we call leakage, not reducing them, all while suffering the negative jobs and economic impacts," Dempsey asserted.

"We believe the US has the opportunity right now to take additional steps necessary to accelerate hydrogen investment and be a leader in decarbonized hydrogen production and supply with the accompanying environmental and economic benefits," she said.

Those steps included providing the manufacturing space with certainty through a national hydrogen roadmap and related policies that instill hydrogen as a key part of the US' clean energy agenda, and an increased "focus on tax credits, which alongside [research-and-development] and financial support, is the minimum policy activity required to move US hydrogen growth forward."

She added that "an appropriately designed, market-based carbon-pricing approach, such as cap-and-trade, would send important market signals," but acknowledged that "this does not appear to be a short-term action in the current political climate."