Editing IPCC:AR6/WGIII/Chapter-12 (section)

=== Box 12.5 | Hydrogen in the Context of Cross-sectoral Mitigation Options ===

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Interest in hydrogen as an intermediary energy carrier has grown rapidly in the years since the 5th Assessment Report of WGIII (AR5) was published. This is reflected in this WGIII assessment report, where the term ‘hydrogen’ is used more than five times more often than in AR5. In [[IPCC:Wg3:Chapter:Chapter-6|Chapter 6]] of this report, it is shown that hydrogen can be produced with low carbon impact from fossil fuels ( [[IPCC:Wg3:Chapter:Chapter-6#6.4.2.6|Section 6.4.2.6]] ), renewable electricity and nuclear energy ( [[IPCC:Wg3:Chapter:Chapter-6#6.4.5.1|Section 6.4.5.1]] ), or biomass ( [[IPCC:Wg3:Chapter:Chapter-6#6.4.2.5|Section 6.4.2.5]] ). In the energy sector, hydrogen is one of the options for storage of energy in low-carbon electricity systems (Sections 6.4.4.1 and 6.6.2.2). But, also importantly, hydrogen can be produced to be used as a fuel for sectors that are hard to decarbonise; this is possible directly in the form of hydrogen, but also in the form of ammonia or other energy carriers ( [[IPCC:Wg3:Chapter:Chapter-6#6.4.5.1|Section 6.4.5.1]] ). In the transport sector, fuel cell engines ( [[IPCC:Wg3:Chapter:Chapter-10#10.3.3|Section 10.3.3]] ) running on hydrogen can become important, especially for heavy duty vehicles ( [[IPCC:Wg3:Chapter:Chapter-10#10.4.3|Section 10.4.3]] ). In the industry sector hydrogen already plays an important role in the chemical sector (for ammonia and methanol production) (Box 11.1 in Chapter 11) and in the fuel sector (in oil refinery processes and for biofuel production) ( [[#IEA--2019b|IEA 2019b]] ). Beyond the production of ammonia and methanol for both established and novel applications, the largest potential industrial application for low-carbon hydrogen is seen in steel-making ( [[IPCC:Wg3:Chapter:Chapter-11#11.4.1.1|Section 11.4.1.1]] ). Hydrogen and hydrogen derivatives can play a further role as substitute energy carriers ( [[IPCC:Wg3:Chapter:Chapter-11#11.3.5|Section 11.3.5]] ) and for the production of intermediate chemical products such as methanol, ethanol and ethylene when combined with CCU ( [[IPCC:Wg3:Chapter:Chapter-11#11.3.6|Section 11.3.6]] ). For the building sector, the exploration of the usefulness of hydrogen is at an early stage (Box 9.4).

An overview report ( [[#IEA--2019b|IEA 2019b]] ) already sees opportunities in 2030 for buildings, road freight and passenger vehicles. This report also suggests a high potential application in iron and steel production, aviation and maritime transport, and for electricity storage. Several industry roadmaps have been published that map out a possible role for hydrogen until 2050. The most well known and ambitious is the roadmap by the [[#Hydrogen%20Council--2017|Hydrogen Council (2017)]] , which sketches a global scenario leading to 78 EJ hydrogen use in 2050, mainly for transport, industrial feedstock, industrial energy and to a lesser extent for buildings and power generation. Hydrogen makes up 18% of total final energy use in this vision. An analysis by IRENA on hydrogen from renewable sources comes to a substantially lower number: 8 EJ (excluding hydrogen use in power production and feedstock uses). On a regional level, most roadmaps and scenarios have been published for the European Union, for example by the Fuel Cell and Hydrogen Joint Undertaking (Blanco et al. 2018; [[#EC--2018|EC 2018]] ; [[#FCH--2019|FCH 2019]] ; [[#Navigant--2019|Navigant 2019]] ). All these reports have scenario variants with hydrogen share in final energy use of 10% to over 20% by 2050.

When it comes to the production of low-carbon hydrogen, the focus of the attention is on production using electricity from renewable sources via electrolysis, so-called ‘green hydrogen’. However, ‘blue hydrogen’, produced out of natural gas with CCS, is also often considered. Since a significantly increasing role for hydrogen would require considerable infrastructure investments and would affect existing trade flows in raw materials, governments have started to set up national hydrogen strategies, both potential exporting (e.g., Australia) and importing (e.g., Japan) countries ( [[#METI--2017|METI 2017]] ; [[#COAG%20Energy%20Council--2019|COAG Energy Council 2019]] ).

As already reported in [[IPCC:Wg3:Chapter:Chapter-6|Chapter 6]] ( [[IPCC:Wg3:Chapter:Chapter-6#6.2|Section 6.2]] .4.1), production costs of green hydrogen are expected to come down from the current levels of above USD100 MWh –1 . Price expectations are: EUR40–60 MWh –1 for both green and blue hydrogen production in the EU by 2050 ( [[#Navigant--2019|Navigant 2019]] ) with production costs already being lower in North Africa; 42–87 USD MWh –1 for green hydrogen in 2030 and 20–41 USD MWh –1 in 2050 ( [[#BNEF--2020|BNEF 2020]] ); EUR75 MWh –1 in 2030 ( [[#Glenk--2019|Glenk and Reichelstein 2019]] ). For fossil-based technologies combined with CCS, prices may range from USD33–80 MWh –1 (Table 6.8). Such prices can make hydrogen competitive for industrial feedstock applications, and probably for several transportation modes in combination with fuel cells, but without further incentives, not necessarily for stationary applications in the coming decades: wholesale natural gas prices are expected to range from USD7–31 MWh –1 across regions and scenarios, according to the World Energy Outlook ( [[#IEA--2020a|IEA 2020a]] ); coal prices mostly are even lower than natural gas prices (all fossil fuel prices refer to unabated technology and untaxed fuels). The evaluation of macro-economic impacts is relatively rare. A study by [[#Mayer--2019b|Mayer et al. (2019b)]] indicated that a shift to hydrogen in iron and steel production would lead to regional GDP losses in the range of 0.4–2.7% in 2050 across EU+3, with some regions making gains under a low-cost electricity scenario.

The IAM scenarios imply a modest role played by hydrogen, with some scenarios featuring higher levels of penetration. The consumption of hydrogen is projected to increase by 2050 and onwards in scenarios likely limiting global warming to 2°C or below, and the median share of hydrogen in total final energy consumption is 2.1% in 2050 and 5.1% in 2100 (Box 12.4, Figure 1) (Numbers are based on the AR6 scenarios database). There is large variety in hydrogen shares, but the values of 10% and more of final energy use that occur in many roadmaps are only rarely reached in the scenarios. Hydrogen is predominantly used in the industry and transportation sectors. In the scenarios, hydrogen is produced mostly by electrolysis and by biomass energy conversion with CCS (Box 12.5, Figure 1). Natural gas with CCS is expected to play only a modest role; here a distinct difference between the roadmaps quoted before and the IAM results is observed.

It is concluded that there is increasing confidence that hydrogen can play a significant role, especially in the transport sector and the industrial sector. However, there is much less agreement on timing and volumes, and there is also a range of perspectives on the role of the various production methods of hydrogen.

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'''Box 12.5, Figure 1 | Fraction of hydrogen (light blue) in total final energy consumption, and for each sector.''' Hinges represent the interquartile ranges and whiskers extend to 5th and 95th percentiles. Source: AR6 scenarios database.

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