Hydrogen is a crucial element in the effort to reduce carbon emissions and create a more sustainable global energy system. Its physical and chemical properties, such as high energy density and flammability, make it a promising source of energy, which can be used for various purposes, such as powering vehicles and heavy industry, as well as heating homes. Hydrogen as an important element of a net-zero future receives significant attention at Shell. The company studied the current state of hydrogen technologies and the potential and prospects of hydrogen as an energy source in the Shell Hydrogen Study. This article offers its most interesting and valuable insights.

A unique element serving different areas

Today, there are two main areas of hydrogen application: material and energy. Considering the first one, hydrogen is used in large quantities as an auxiliary material in chemical product synthesis. The most common is the production of ammonia, which accounted for about 55% of global hydrogen as of 2023. Ammonia is an essential element for the production of fertilizers used in the agricultural industry all around the world. Ammonia synthesis is followed by the refining of oil products, which currently consumes 25% of global hydrogen production. As a result of refining crude oil, products such as naphtha, petrol and diesel fuels, heating oil, and aviation fuels are made.

“The demand for hydrogen at refineries around the world is expected to continue to grow. One of the reasons for this trend is the growing worldwide requirements for fuel quality, especially in emerging markets; better fuels are needed to meet stricter engine standards and more stringent exhaust emission regulations”, stated in the Shell Hydrogen Study.

At the same time, the world must find ways to change hydrogen production for the commercial sector. Today, the main source of energy for hydrogen production is natural gas, accounting for 70%, and coal, 30%. Low-emission hydrogen production from renewables accounted for only less than 1% in 2022 and 5% in 2021. According to the International Energy Agency (IEA), by 2030, about 50 million tons of hydrogen should be produced from electrolysis, while fossil fuel-based production using CCUS should amount to only 30 million tons.

“Replacing unabated fossil fuel-based hydrogen with low-emission hydrogen in existing applications (namely refining and industry sectors) is a short-term priority. Given that it presents relatively low technical challenges as it is a like-for-like substitution rather than a fuel switch”, says IEA.

Shell helps to accelerate a crucial energy transition. The company is building Holland Hydrogen 1 in the Netherlands, Europe's largest renewable hydrogen plant. Once operational, the 200 MW electrolyzer will reportedly produce up to 80 tons of renewable hydrogen daily, enough to meet up to 10% of the company's annual hydrogen demand.

Hydrogen is also used in the refining of vegetable oils to produce hydrogenated vegetable oil (HVO), an interchangeable paraffinic fuel that is analogous to diesel fuel. Moreover, the same process can be applied in food chemistry to harden oils and fats, and in the plastics industry for polymer production. Besides the food processing industry, hydrogen is a part of flat glass production, the electronics industry and applications in electricity generation – for example for generator cooling or corrosion prevention in power plant pipelines, and other spheres.

Another area of material hydrogen application is related to the synthesis of methanol, which is a key chemical feedstock for the production of important chemical intermediates such as formaldehyde (CH2O), acetic acid (C2H4O2) and others.

When it comes to energy application, hydrogen and hydrogen-based fuels are expected to help reduce emissions from hard-to-abate sectors by 6%, according to the Net Zero 2050 Scenario. Energy applications include converting the energy contained in hydrogen into heat, power, or electricity and then used in thermally operating heat engines or in fuel cells. Although hydrogen is generally a clean and potent fuel with high energy content and attractive combustion properties, it is now rarely used as an energy source in heat engines. However, the technology of using hydrogen as a fuel, founded in the 18th century, has made significant progress in recent years. Today, hydrogen is used for energy purposes almost exclusively in fuel cells. Let's take a closer look at hydrogen-based fuel cell technology and see how widely it can be applied today.

Hydrogen-based fuel cells – the backbone of empowering changes

Fuel cells can convert chemically bound energy into electrical and heat energy directly, i.e. without detouring via a thermal power process. People know this mechanism from batteries, which convert energy in the same way. But unlike batteries, a fuel cell can continuously generate electricity as long as it receives fuel. Such a principle of action makes fuel cells much more sustainable than heat engines, which operate with fossil fuels and emit both air pollutants and greenhouse gases. As reported, heat engines cannot convert the entire heat of the combustion process into mechanical energy, only a part of it. While in theory, fuel cells can reach cell efficiencies of over 80%, the actual indicators can be lower due to voltage losses. Nevertheless, their electrical and overall effectiveness seems as obvious as their sustainability.

According to Shell Hydrogen Study, there are different types of fuel cells:

“The world market for fuel cells is currently dominated by the low-temperature polymer electrolyte membrane fuel cell (PEMFC), which because of its power density, flexibility and cost reduction potential is most suitable for mobility purposes. The solid oxide fuel cell (SOFC) has developed into the second most important fuel cell type. This high-temperature fuel cell is used for continuous domestic energy or electricity supply and in the power plant sector”.

Stationary energy application

As mentioned earlier, fuel cells generate electricity and heat, so they are increasingly used in combined heat and power (CHP) units for electricity and heating supply in the power plant sector and the building sector. They are more often applied as an alternative to generators and rechargeable batteries as a backup power supply. Considering specifically domestic energy supply, the first projects for domestic fuel cell systems supported by local governments have already been introduced and scaled in Japan, Germany, and 12 other EU member states. For example, the Japanese “EneFarm'' project has already installed over 400,000 gas-fuelled fuel cell systems for domestic energy supply and plans to scale up to 5.3 million systems by 2030.

The advantages of a fuel cell system for domestic use include high efficiency at all load points, quietness, low maintenance costs, and emission-free operation. Among the drawbacks so far is the uncompetitive price compared to condensing boilers. However, the cost-effectiveness of micro- or mini-CHP on fuel cells in the construction sector correlates with retail prices for electricity and natural gas.

Mobility applications

It all started with space. Hydrogen was first used as a rocket propellant and fuel cells – as auxiliary power units in space, in the 1950s-1960s. This inspired people and gave impetus to developing the technology of using hydrogen and fuel cells as fuel for various types of transportation. Already in the 1960s, the first samples of engines for passenger cars equipped with fuel cells appeared. In the meantime, the usage of hydrogen in internal combustion engines had not yielded significant results – the efficiency of hot hydrogen combustion was no higher than that of traditional gasoline and diesel engines. Therefore only cold combustion is now used in fuel cell systems in the mobility sector today, which is suitable for all means of transport. The only exception is space travel, where pure hydrogen is still used on a par with fuel cells.

Hydrogen fuel cell electric vehicles (FCEVs) are powered by electricity and produce water vapor as a tailpipe emission. The hydrogen fuel cell converts compressed hydrogen from the fuel tank into electricity, which powers the vehicle's electric motor. The range is the same as that of cars with internal combustion engines running on gasoline or diesel fuel. Hydrogen fuel cell trucks, for example, can cover long distances and take only about 15 minutes to refuel.

Hydrogen passenger cars today are also not inferior to those driven by internal combustion engines in terms of performance, refueling time, or comfort. Compared to battery electric vehicles, which are much more scaled on the roads today, fuel cell electric cars show longer range and shorter charging times – a few minutes compared to a standard 12-hour charging for EVs. The main factor hindering the scale of these types of personal transportation is their lack of competitiveness in terms of price - the costs associated with buying and maintaining a car are an important factor in deciding whether to buy or keep it. To illustrate: as of the end of 2022, there were 72,193 fuel cell vehicles on the road, while sales of battery electric vehicles in 2022 amounted to 7.3 million. Shell's experts predict that fuel cell electric vehicles will eventually become much more cost-effective, primarily when the system is improved and the necessary infrastructure for hydrogen transportation and storage is in place, which is currently lacking. There are other factors behind it as well:

“Internal combustion drive systems are becoming more expensive, and in urban areas, they are often subjected to local usage restrictions as a result of stricter air quality regulations. Compared to battery electric vehicles, fuel cell electric vehicles offer advantages, however, if battery electric vehicles are improved, they will become more expensive and will lose any economic advantages they may have over fuel cell electric vehicles”, explained Shell.

Buses and industrial trucks are already at their early, but fast-scaling stages of commercialization. As of January 1, 2023, a total of 370 fuel cell buses were in operation in Europe as of 1 January 2023, and more than 5500 units worldwide – more than 90% of which are based in China. Experts estimate that a hydrogen bus can save up to 800 tons of CO₂ emissions over a 12-year life cycle compared to a vehicle powered by an internal combustion engine. It is best aligned with the European Commission's ambitious plan to make all new city buses zero-emission as of 2030.

As for other means of transport, there is a potential opportunity for hydrogen in the aviation sector, however, this idea is in the development stage right now and its success, as well as the other means of FCEVs, will depend on the financial and legislative support from stakeholders and policies. It is reported by Shell that in 2020, the company invested in ZeroAvia, a hydrogen start-up which has been conducting test flights in the United Kingdom and working towards hydrogen fuelling for commercial flights of up to 500 miles using 10- to 20-seat aircraft and commercial jets able to carry up to 200 passengers 3,000 miles. On August 1, 2023, Shell launched Hydrogen Pay-Per-Use, an affordable way to evaluate hydrogen as a heavy-duty vehicle fuel with reduced investment, complexity, and risk.

Given all the benefits of hydrogen, the world expects to see an expansion of its research, low-emission production, and use in various industries and everyday life. Government policies and international agreements play an important role in ensuring progress. However, there are high expectations that energy companies will contribute to achieving the ambitious climate goal. Following Shell’s example, it is crucial for businesses not only to offer products and services but also contribute to the development of modern technologies that help achieve zero emissions.