Introduction

Despite being the most common element in the known universe, realising the true value of hydrogen remains problematic. To be used as a fuel, heat source or feedstock, hydrogen must typically be synthesised from a chemical reaction - these include greenhouse gas emitting processes to produce "brown" (gasification of brown coal) or "grey" (steam reformation of natural gas) hydrogen, capturing and storing carbon dioxide from grey or brown hydrogen to produce "blue" hydrogen and creating "green" hydrogen through electrolysis powered by renewable energy sources.

When burned, hydrogen produces zero carbon emissions - this characteristic makes the element an obvious choice in the global fight against climate change, prompting many commentators to label it the key missing ingredient to a credible net zero pathway. It is this same characteristic which make hydrogen an obvious candidate for reducing or even eliminating emissions in the world's fossil fuel - intensive industries, and in so doing create a new 'hydrogen economy'.

Despite recent and rising global interest in hydrogen, the concept of a hydrogen economy is not new. Hydrogen was promoted as a replacement for hydrocarbons like oil and gas following the oil crisis in the 1970s, and again in the 1990s and early 2000s as global awareness of climate change and the urgent need to reduce greenhouse gas emissions has grown. Versions of what might constitute the ideal hydrogen economy vary, but all feature the significant scaling up of green hydrogen as a substitute for fossil fuel use. Such scenarios show real promise for hard-to-abate industrial sectors historically dominated by fossil fuels usage.

If hydrogen is to play a key role in the global clean energy transition, its most attractive uses lie in sectors for which the abatement of greenhouse gases has (at least historically) proven to be difficult - these include industrial manufacturing (such as steel fabrication, cement production and ammonia synthesis), heavy transport and fuel cells (as an evolving alternative to battery - powered electric vehicles) and power generation (as a feedstock for hydrogen-fired turbine power stations, and when combined with large-scale geological storage and renewable energy to produce green hydrogen).

Gas industry stakeholders argue that a staged approach to developing the hydrogen economy is appropriate, beginning with carbon capture and storage (CCS) to enable blue hydrogen production. Similarly, resources companies advocate that there are significant synergies with hydrogen to be explored before a full transition to green hydrogen, given their existing reserves of gas, evolving CCS and CCUS (carbon capture, utilization and storage) capabilities, together with opportunities to repurpose existing technology and facilities to accommodate blue hydrogen.

A fully formed and functioning hydrogen economy is undoubtedly still some way off. The International Energy Agency has estimated the number of electrolyser projects and installed capacity for green hydrogen projects has increased from less than 1 MW in 2010 to over 25 MW in 2019. Renewable energy prices and the cost of electrolysers have declined significantly over the same period. Inevitably, the high costs of scaling up hydrogen infrastructure means that governments have a critical role in supporting industry investment and in creating a supporting regulatory framework. Early signs show real promise: energy hungry but resource poor jurisdictions like Japan have made hydrogen a cornerstone of their long-term energy strategies and have issued well-publicised invitations to overseas hydrogen production bases (like Australia) which can service their import requirements. Germany has announced a €130 billion pandemic recovery budget dominated by green initiatives, including a fully-funded target of 5GW of electrolysers by 2030. Australia, with its abundant natural and renewable resources, is poised to become a key global player in hydrogen export markets over the long term.

On the supply side, significant demand already exists for hydrogen producing projects. Nonetheless, current costs mean that if blue and green hydrogen projects are to be deployed and accelerated, large-scale investment and other fiscal support from governments will be crucial. Australia provides a useful example: in April 2020, the Australian Renewable Energy Agency (ARENA) announced a funding round of up to $70 million to support the nascent green hydrogen market in Australia. Following an oversubscribed initial stage, seven companies were shortlisted for further consideration. However, ARENA received over 30 expressions of interest for the available $70 million, totalling over $3 billion in value.

The move to a viable global hydrogen economy is likely to involve synergies between the renewable energy and gas industries, with projects involving an international group of sponsors, lenders, and offtakers. To materialise, any version of the hydrogen economy must realise and more importantly take advantage of the increasing connectivity between and across international energy markets. This Special Issue on the Hydrogen Economy attempts to address this opportunity by presenting a detailed discussion of the hydrogen opportunity (from both demand and supply - side perspectives) across several jurisdictions, including the European Union, Germany, the United Kingdom, Russia, Australia, Japan, Canada and the United States. Given the nascent stage of the global hydrogen economy together with unprecedented interest in the sector, the Issue is a timely addition to a globally significant topic in international energy markets.