Hydrogen Technology in industrial processes – High-intensity heat generation
Industrial heat accounts for two-thirds of industrial energy demand and nearly one-fifth of global energy consumption
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. High-intensity heat generation directly and indirectly drives numerous processes such as fluid heating, distillation, drying and facilitating chemical reactions.
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Currently, the primary energy sources for high-temperature industrial heating are fossil fuels —approximately 30% from coal, 35% from natural gas, and 15% from oil— contributing to about 10% of global greenhouse gas emissions.
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The use of low- and zero-carbon fuels, such as hydrogen, could significantly reduce emissions.
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In an ambitious high adoption scenario, it has been estimated that hydrogen could provide approximately half of the energy required to power the UK’s industrial, heating and transport sectors by 2050.
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The production of hydrogen-based fuels has grown significantly. In 2022, global low-emission hydrogen production reached 0.3 million tonnes, primarily driven by ammonia production. Additionally, with over 20 million tonnes of hydrogen equivalent expected to be operational by 2030, hydrogen is increasingly being integrated as a feedstock across a broader range of industries, reflecting its expanding role in decarbonising industrial heat.
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Opportunities and barriers for hydrogen use in industrial processes
Low-emission hydrogen production is currently dominated by hydrogen
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produced from natural gas with the associated carbon dioxide captured, transported and stored. Electrolytic hydrogen, produced from renewable electricity such as wind and solar through localised electrolysis, is gaining prominence, having reached almost 520 GW globally in 2023
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. However, low-emission hydrogen still accounted for only 0.7% of global production in 2022
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. To increase adoption, some countries’ approach has been to focus on industrial clusters to stimulate large-scale demand and attract investment.
Replacing fossil fuel feedstocks with hydrogen is complex due to the diversity of heat-generation technologies across industrial sectors. For instance, in the steel industry, switching to hydrogen-based production presents significant challenges. The high temperatures required for steelmaking, along with hydrogen's different combustion properties compared to those for traditional carbon-based fuels, necessitate modifications to existing infrastructure and processes. For example, the blast furnace-basic oxygen furnace route would need to transition to a direct reduced iron process using hydrogen, which poses technical and economic hurdles.
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While some hydrogen infrastructure exists, significant investments are still required to support large-scale hydrogen production and transport. Initiatives such as the European Hydrogen Backbone, which aims to develop a 28,000 km hydrogen pipeline network across Europe by 2030, represent significant progress toward reducing the cost of transporting hydrogen and making it a more cost-effective option for industries.
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A key tool for policymakers is the creation of new regulatory frameworks that facilitate the development and uptake of low-carbon hydrogen technologies
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. For example, Romania has mandated that industrial hydrogen users meet 50% of their demand with low-emission hydrogen by 2030, demonstrating how national policies can drive the transition to cleaner hydrogen technologies.
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Ultimately, significant policy support is required if there is to be a significant uptake in hydrogen technology across heat-intensive industrial sectors. Although industrial heat demand is projected to grow by 6% from 2022 to 2027, and modern renewable heat consumption is expected to increase by almost one-third during the same period, these developments are insufficient to fully offset fossil fuel-based heat consumption. Without additional policy intervention, it remains difficult to foresee a significant increase in low-carbon hydrogen adoption.
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As the hydrogen economy becomes more global, it is anticipated that locally produced hydrogen will increasingly be complemented by cross-border shipments from regions with abundant renewable energy resources and CO2 storage capabilities. In line with the Net Zero Emissions by 2050 Scenario, more than 20% of merchant demand for hydrogen and hydrogen-based fuels is projected to be met through international trade by 2030.
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While the economics of such projects remain uncertain, if trans-border hydrogen can be competitively priced against local sources, it could open up new opportunities for industrial users.
The contractual frameworks for these projects are still evolving. In some cases, their structure resembles that of LNG or large-scale cross-border gas transportation and petrochemical projects, where the economics are already established. For others, the contracts may need to follow offtake structures more commonly seen in renewable energy projects, such as power purchase agreements. Alternatively, a hybrid approach may emerge as the market continues to mature.
The challenges with trans-border shipment of hydrogen are primarily technical. To transport hydrogen in liquid form, it must be cooled to minus 253 degrees Celsius, just 20 degrees above absolute zero (the lowest level of the thermodynamic scale), and 100 degrees cooler than LNG. Additionally, the volatility of liquid hydrogen presents complications. However, liquid hydrogen carriers and stabilising catalysts are being developed and tested and expected to be deployed in full-scale projects in the near future. In the meantime, green ammonia, composed of nitrogen and hydrogen, offers a less technically challenging and commercially viable alternative for hydrogen transport.
As of now, export-oriented hydrogen projects are growing, with announced plans suggesting up to 16 Mt of hydrogen equivalent (Mt H2-eq) could be exported globally by 2030, and this figure could increase to 25 Mt H2-eq by 2040
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. Despite this, progress in pre-existing projects has been slow.
Towards an Effective Framework for Hydrogen in the Industrial Sector
Developers, investors and advisers in the energy sector will recognise that navigating the regulatory regime for energy projects is complex. Numerous regulatory bodies and key stakeholders, including offshore seabed owners, marine management authorities, oil and gas authorities, government departments, shipping authorities, environmental bodies and health and safety executives, oversee low-carbon hydrogen projects, requiring careful coordination among them.
Integrating hydrogen technologies into existing energy systems for use as an industrial feedstock requires a coordinated effort among stakeholders.
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This includes aligning different countries’ domestic regulatory frameworks to support critical infrastructure, particularly for hydrogen transportation and storage.
Some jurisdictions covered by this guide, notably Japan, South Korea and some EU jurisdictions, have already taken steps in this regard. As another example, in the UK, the North Sea Transition Authority had acknowledged the need for regulatory clarification for hydrogen technologies and the rationalisation of stakeholder roles.
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Since then, key developments have occurred, including the creation of the Hydrogen Regulators Forum in 2021, which has facilitated knowledge-sharing and coordination among regulators, focusing on challenges in planning, environmental, and safety regulations. Notably, the forum has contributed to environmental regulation guidance for CCUS-enabled hydrogen production and revisions to the Energy National Policy Statements to prioritise hydrogen projects in the planning process
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. However, these initiatives are still in the early stages, as highlighted by the Hydrogen Planning Barriers research project that was completed in December 2023, which identified resource challenges for local authorities and the absence of specific policy guidance as barriers delaying hydrogen projects and increasing costs. Addressing these hurdles will be essential for accelerating hydrogen adoption and ensuring that the UK's hydrogen economy grows efficiently
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Similarly, the Netherlands expressed its intent to regulate hydrogen networks in a similar way to existing gas and electricity networks.
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The Dutch authorities have acknowledged the gaps in current regulations for the storage of hydrogen. While preferring to have European or international safety guidelines and standards developed, they have begun establishing general principles relating to the safety risks of hydrogen storage with the ultimate aim of developing a bespoke framework specific to hydrogen.
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