Hydrogen can help decarbonize the UK economy but isn’t panacea, MPs say

Hydrogen has a part to play in the U.K.’s shift to a net-zero economy but its role will likely be restricted to certain sectors, according to a report from an influential committee of U.K. lawmakers.

The House of Commons Science and Technology Committee concluded that although hydrogen possessed “several attractive features, most of the evidence we have received was clear that with current technologies, it does not represent a panacea.”

“As the UK looks to transition to a Net Zero economy, hydrogen will likely have specific but limited roles to play across a variety of sectors to decarbonise where other technologies — such as electrification and heat pumps — are not possible, practical, or economic,” the report, which was published Monday, said.

Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in a wide range of industries.

One method of producing hydrogen uses electrolysis, a process through which an electric current splits water into oxygen and hydrogen.

Some call the resulting hydrogen “green” or “renewable” if the electricity used in the electrolysis process comes from a renewable source such as wind or solar. The vast majority of hydrogen generation today is based on fossil fuels.

Monday’s report sought to temper expectations about the role hydrogen could play in slashing emissions and the transition to a net-zero economy.

“To make a large contribution to reducing greenhouse gas emissions in the UK, the production of hydrogen requires significant advances in the economic deployment of CCUS [carbon capture, utilization and storage] and/or the development of a renewable-to-hydrogen capacity,” it said.

“The timing of these is uncertain, and it would be unwise to assume that hydrogen can make a very large contribution to reducing UK greenhouse gas emissions in the short- to medium-term.”

Committee chair Greg Clark said that there were “significant infrastructure challenges associated with converting our energy networks to use hydrogen and uncertainty about when low-carbon hydrogen can be produced at scale at an economical cost.”

“But there are important applications for hydrogen in particular industries so it can be, in the words of one witness to our inquiry, ‘a big niche’,” Clark added.

Industry group Hydrogen Europe did not immediately respond to a CNBC request for comment.

Big plans, big challenges

Over the past few years, major economies and businesses have looked to the emerging green hydrogen sector to decarbonize industries integral to modern life.

During a roundtable discussion at the COP27 climate change summit last month, German Chancellor Olaf Scholz described green hydrogen as “one of the most important technologies for a climate-neutral world.”

“Green hydrogen is the key to decarbonizing our economies, especially for hard-to-electrify sectors such as steel production, the chemical industry, heavy shipping and aviation,” Scholz added, before acknowledging that a significant amount of work was needed for the sector to mature.

“Of course, green hydrogen is still an infant industry, its production is currently too cost-intensive compared to fossil fuels,” he said. “There’s also a ‘chicken and egg’ dilemma of supply and demand where market actors block each other, waiting for the other to move.”

Also appearing on the panel was Christian Bruch, CEO of Siemens Energy. “Hydrogen will be indispensable for the decarbonization of … industry,” he said.

“The question is, for us now, how do we get there in a world which is still driven, in terms of business, by hydrocarbons,” he added. “So it requires an extra effort to make green hydrogen projects … work.”