Position paper: Invest in hydrogen for robust, resilient and sustainable growth as a response to the COVID-19 pandemic

What is at stake

The COVID-19 pandemic has caused a massive contraction in many industries, in addition to the devastating global health impact. The response to this unprecedented economic and societal shock will be a defining moment for the energy transition and international efforts to combat the climate crisis.

To limit global warming to 1.5 degrees Celsius and prevent the most serious potential impacts of climate change, including increased vulnerability to pandemics^[1], we need long-term thinking and massive investments in game-changing, systemic solutions such as hydrogen.

Governments are increasingly recognizing hydrogen’s ability to decarbonize sectors that are otherwise impossible or difficult to abate – such as intensive personal or collective transport, freight logistics, industrial heating and industry feedstock – and its role in improving energy security. Meanwhile, industry leaders across the automotive, chemicals, oil and gas, and heating sectors look to low-carbon hydrogen as a serious alternative to reach their increasingly ambitious sustainability objectives.

What we recommend

The Hydrogen Council joins the International Energy Agency and other leading organisations in a call to accelerate clean energy innovation and firmly place the energy transition at the heart of all recovery measures[2].

As a global advisory body, we stand ready to share the Council’s extensive knowledge and expertise and serve as a partner to governments working to design economic recovery plans with hydrogen as part of their strategy. 

We fully acknowledge that different countries have their own unique set of circumstances, priorities and approaches. However, the following principles can serve as general guidance world-wide:

1. As a basis, we recommend that hydrogen be part of any national or international recovery efforts and stimulus measures, as its systemic role will be key to completing the massive transformation required to deliver a truly sustainable, secure and resilient energy system.
2. Economic recovery measures should support large scale initiatives that can accelerate cost competitiveness of hydrogen with a focus on the 18 applications identified in the “Roadmap to Hydrogen Competitiveness”[3].
3. All renewable and low-carbon hydrogen production pathways should be considered and supported, as this will enable a competitive market between technologies and ensure that existing assets are used and converted to increase system resilience.
4. Transport is responsible for a quarter of direct global CO2 emissions from fuel combustion. Investment to scale up hydrogen used in transport-related applications is needed to reduce costs and ensure there is sufficient downstream infrastructure available. Along with direct electrification, hydrogen solutions (such as fuel cell vehicles and hydrogen-derived e-fuels) will be needed to fully decarbonise the transport sector.
5. Renewable and/or low-carbon hydrogen can contribute to decarbonisation of industry now and should be supported by a mix of low-carbon hydrogen value support schemes and dedicated support for scale projects for the use of hydrogen as a new fuel or feedstock for hard-to-abate sectors such as steel and chemicals.
6. Specific new support schemes are needed to overcome remaining challenges. These tools may include public-private partnerships to overcome market failure situations on the infrastructure side, contracts-for-difference or dedicated multi-annual mechanisms (such as grants and tax incentives) to offset the premium of renewable and/or low carbon hydrogen to end consumers.
7. Global collaboration is a key prerequisite to enabling a robust marketplace that spurs competition and innovation, especially when it comes to harmonisation of codes, standards and regulations. Similarly, seeing ambitious strategies put in place in a handful of leading geographies is encouraging; however, this may not be enough to scale hydrogen to the level needed to achieve our shared climate targets. A comprehensive global action is required.

The Hydrogen Council estimates that hydrogen could deliver 18% of global energy demand, abate 6 Gt of CO2 annually and create 30 million jobs by mid-century. For many industry sectors, that is just one investment cycle away. By investing today, governments can stimulate employment throughout the value chain, from construction and utility workers, office support functions and highly skilled engineer and university resources to address the challenges that a complex sector build-up presents. Innovative small businesses through large multinational finance and energy companies are investing in this space, and government support to foster growth will ensure the benefits are felt throughout the value chain and the entire economy.

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About the Hydrogen Council

The Hydrogen Council is a global CEO-led initiative that brings together leading companies with a united vision and long-term ambition for hydrogen to foster the clean energy transition. Using its global reach to promote collaboration between governments, industry and investors, it provides guidance on accelerating the deployment of hydrogen solutions around the world. The Council believes that hydrogen has a key role to play in the global energy transition by helping to diversify energy sources worldwide, foster business and technological innovation as drivers for long-term economic growth, and decarbonise hard-to-abate sectors. The Council acts as a business marketplace, bringing together a diverse group of 109 companies based in 20+ countries and across the entire hydrogen value chain, including large multinationals, innovative SMEs, and investors. The Hydrogen Council serves as a resource for safety standards and an interlocutor for the investment community, while identifying opportunities for regulatory advocacy in key geographies. To find out more visit www.hydrogencouncil.com and follow us on Twitter @HydrogenCouncil and LinkedIn.

[1] (Belova, et al., 2017)

[2] Special Report on Sustainable Recovery, IEA, 18 June 2020

[3] Roadmap to Hydrogen Competitiveness, Hydrogen Council, 2020