Hydrogen is increasingly recognized as a key player in the transition to clean energy, particularly for sectors that are difficult to decarbonize, such as heavy industry and long-distance transport. Despite its potential, the adoption of hydrogen as a mainstream energy source faces significant challenges. One of the primary obstacles is the lack of clear and consistent terminology, which creates confusion and hinders investment and international trade. This article explores the importance of unified hydrogen terminology, the existing challenges, and steps needed to develop a global low-emission hydrogen market.
The Promise of Hydrogen in Decarbonization
Hydrogen holds great promise for reducing emissions in sectors where decarbonization is particularly challenging. Heavy industry and long-distance transport are two areas where hydrogen can significantly reduce the carbon footprint. Currently, hydrogen demand is mostly limited to established applications such as refining and industrial processes. However, its potential in new applications remains largely untapped due to various barriers.
The growing interest in hydrogen is driven by its ability to serve as a clean energy carrier. When produced using low-emission methods, hydrogen can help achieve significant reductions in greenhouse gas emissions. This makes it an attractive option for countries and industries aiming to meet their climate goals. However, realizing this potential requires overcoming several challenges, including the need for clear and consistent terminology. To move beyond established uses and tap into new applications, the hydrogen industry needs to address these challenges head-on.
Innovation in hydrogen production and its use as an energy source is critical in sectors that are traditionally difficult to decarbonize. For example, in steel manufacturing, hydrogen can replace carbon-based fuels, significantly reducing emissions. Similarly, hydrogen-powered fuel cells offer a cleaner alternative to diesel engines in long-distance transport, including trucks, buses, and even shipping. The successful deployment of hydrogen in these sectors hinges not only on technological advancements but also on creating a conducive environment for investment and growth through clear, standardized terminology.
Challenges Hindering Hydrogen Adoption
Despite the promising outlook for hydrogen, several obstacles hinder its widespread adoption. One of the main issues is the unclear and inconsistent terminology used to describe hydrogen. Different countries and stakeholders use varying terms, which creates confusion and slows down trade and investment. This lack of clarity makes it difficult for investors to assess the potential of hydrogen projects and commit resources.
Another significant challenge is the uncertainty about future hydrogen demand. Investors are hesitant to invest in hydrogen projects without a clear understanding of the market’s future growth. This uncertainty is compounded by the lack of adequate infrastructure for transporting and delivering hydrogen, which further exacerbates the risks for investors and potential consumers. The fragmented regulatory and certification frameworks globally also add to the complexity and cost of developing hydrogen projects.
Regulatory clarity is a major issue that the hydrogen industry faces. The regulatory and certification frameworks for hydrogen are inconsistent and fragmented globally. This fragmentation makes it difficult for project developers to navigate different national certifications and regulations, adding to the complexity and cost of developing hydrogen projects. For hydrogen to reach its full potential and become a mainstream energy source, these regulatory hurdles must be addressed through international cooperation and unified standards.
The Need for Unified Terminology
A common, transparent methodology for calculating hydrogen emissions intensity is essential for unlocking investment and scaling up production. The existing terminology, which includes terms like “sustainable,” “clean,” and color codes such as “grey,” “blue,” “pink,” and “green,” lacks universal standards. These terms often mask the varying levels of emissions intensity, causing confusion among stakeholders.
A unified terminology would ease financing costs, attract investments, and enable economies of scale by harmonizing trade and regulatory frameworks globally. The International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) has made significant progress in this area by developing a standard methodology for calculating greenhouse gas (GHG) emissions intensity from various hydrogen production routes. Implementing such standardization would allow investors to make more informed decisions, reducing risks and uncertainties.
The introduction of a standardized approach to hydrogen terminology and emissions calculations is not only necessary for the market’s financial aspects but also to ensure public trust and acceptance. With transparent and consistent language, stakeholders across the spectrum—from policymakers to consumers—can better understand and support the development of hydrogen as an energy source. Clear terminology can also facilitate international cooperation by providing a common framework that aligns various national regulatory and certification systems, thereby reducing trade barriers.
Policy Momentum and International Cooperation
Policy support for hydrogen is increasing, with 28 governments having introduced hydrogen strategies by the end of 2022. About one-third of these strategies were launched within the past two years. Countries have different perspectives on hydrogen—some aim to become major hydrogen exporters, while others focus on importing large volumes. Despite these developments, global hydrogen demand rose only modestly (3%) in 2022, indicating that stronger action is required.
International cooperation is crucial for developing a global low-emission hydrogen market. The IEA’s collaborative work with IPHE, particularly a report for the G7 Climate, Energy and Environmental Ministerial meeting titled “Towards hydrogen definitions based on their emissions intensity,” seeks to offer a uniform way of calculating emissions intensities. This would provide clearer visibility for policymakers and investors, facilitating more confident investment decisions. This kind of international effort underscores the importance of collaboration and standardization for scaling up hydrogen adoption globally.
The momentum behind hydrogen policy needs to translate into concrete actions that align national targets and strategies with a unified global approach. Government commitments to hydrogen are a positive step, but to achieve a robust global market, these commitments must be backed by harmonized regulatory frameworks and consistent methodologies for emissions calculations. The development of ISO standards for hydrogen emissions intensity, expected by the end of 2024, represents a significant milestone toward this goal. By ensuring that all stakeholders operate within a standardized framework, the hydrogen market can achieve greater transparency and efficiency.
Addressing Bottlenecks in Hydrogen Projects
More than 1,200 low-emission hydrogen projects have been announced to date, but only 5% have secured firm investment decisions. This slow progress is attributed to uncertainties surrounding demand, insufficient infrastructure and logistics, and fragmented regulatory environments. A unified terminology and methodology for emissions calculation would significantly reduce these bottlenecks, allowing for more straightforward and confident investment decisions.
An internationally agreed-upon methodology for calculating hydrogen emissions intensities would streamline various certification systems and regulatory frameworks, ensuring compatibility. This consistency would facilitate project developers’ efforts, who otherwise face the cumbersome task of navigating different national certifications and regulations. Such a unified approach would lower the barriers to entry for new projects and enable faster scaling of hydrogen production and distribution networks.
Addressing these bottlenecks is crucial for turning announced projects into operational realities. Governments and industry leaders must work together to establish clear and consistent rules that support the timely development of hydrogen infrastructure. By removing uncertainties and introducing standardized practices, the hydrogen sector can attract more investments, enhance project viability, and expedite the transition to a low-emission economy. Ensuring that infrastructure and logistics are in place will be key to overcoming these hurdles and achieving sustained growth in hydrogen adoption.
Developing a Global Hydrogen Market
Hydrogen is gaining recognition as a key component in the shift towards clean energy, especially in sectors that are challenging to decarbonize, such as heavy industry and long-distance transportation. While its potential is promising, the widespread adoption of hydrogen as a primary energy source faces major hurdles. One significant barrier is the absence of clear and consistent terminology, which leads to confusion and impedes investment and international trade. This issue highlights the necessity of developing standardized hydrogen terminology to foster a global low-emission hydrogen market.
The current lack of uniform language about hydrogen creates misunderstandings and hampers efforts to scale its use. Investors, policymakers, and industry stakeholders need a common framework to make informed decisions and collaborate effectively. For hydrogen to fulfill its promise as a clean energy solution, it’s crucial to overcome these terminological challenges and establish clear definitions.
Developing a global low-emission hydrogen market requires coordinated efforts from governments, industry leaders, and international organizations. By standardizing the language and clarifying the different types of hydrogen—such as green, blue, and gray hydrogen—stakeholders can more easily navigate the market, make confident investments, and advance technological innovations. Unified terminology will also facilitate international trade and cooperation, accelerating the global transition to a sustainable energy future.
