Will hydrogen use in manufacturing be the best way to achieve the net-zero emissions target by 2050?

APAC CEO for SYSPRO Rob Stummer. Image credit: SYSPRO

Hydrogen has been widely touted as a viable alternative to fossil fuels and could form a key part of the energy strategy enabling the Australian Government to achieve the net-zero emissions target by 2050. But is hydrogen a realistic alternative energy source for heavy industries like manufacturing in Australia? SYSPRO Asia Pacific CEO Rob Stummer explains.

Currently cheap and reliable fossil fuels power our manufacturing industry. This is not going to change overnight, but the manufacturing sector needs to be working towards a future where their emissions are significantly lower than they are today. The Clean Energy Finance Corporation (CEFC) sees hydrogen as offering the most credible pathway to decarbonisation for high emitting sectors like manufacturing.

Whilst clean hydrogen is currently enjoying unprecedented political and business momentum around the world according to The International Energy Agency (IEA), now is the time to scale up technologies and bring down costs to allow hydrogen to become widely adopted.

The science behind hydrogen

Hydrogen is the lightest and most abundant element in the world. It is also an explosive and clean-burning gas that contains more energy per unit of weight than fossil fuels do. It could be used instead of fossil fuels that currently generate four-fifths of the world’s energy supply and produce most global greenhouse gas emissions.

Hydrogen could help us to achieve the emissions target, because it only emits water when burned and can be made without releasing CO2. It really depends on hydrogen availability, cost and performance compared to the alternatives. For hydrogen to become a viable alternative to fossil fuels would require a dramatic scaling up of its production and use. So it is currently a bit of a “chicken and egg” situation, because of the complexity of hydrogen supply and value chains, which makes gradual deployment more difficult.

Hydrogen can be stored, liquified and transported via pipelines, trucks or ships and can be used to make fertiliser, fuel vehicles, heat buildings, generate electricity and can help heavy industry to manufacture almost anything.

Industrial use of hydrogen

For the steel manufacturing industry, the direct reduction of iron ore could develop into an important industrial process because with the traditional blast furnace method, large amounts of carbon are emitted. Direct reduction of iron ore using natural gas is now widely used in steel production and new methods using hydrogen have been piloted in the steel industry, but it is still early days.

Hydrogen could help fuel both steel and cement production as well as long-distance transport in the short term, but if we are aiming towards net-zero emissions by 2050, we really need to be aiming for a fully decarbonised energy sector.

The problem with hydrogen as a clean energy strategy

The IEA says challenges include high costs, which make hydrogen uncompetitive today, with uncertainty over how costs will develop over time. It also come with safety risks, high upfront infrastructure costs and some of the industrial dynamics of fossil fuel supply and distribution.

Replacing fossil gas for building heat would rely on the availability of large quantities of low-carbon hydrogen and suitably upgraded infrastructure to distribute and safely burn the fuel. Low efficiency is another significant challenge, with more energy being wasted at each step in the production and use of hydrogen than for many alternatives.

Demand for hydrogen, which has tripled since the mid-1970s, continues to rise and is supplied almost entirely from fossil fuels, with six percent of the world’s supply of natural gas and two percent of coal globally being used to produce hydrogen. Consequently, hydrogen production is responsible for CO2 emissions of around 830 million tonnes of carbon dioxide per year.

Another significant issue is that hydrogen is inefficient to produce, which raises the costs and it also requires a larger energy supply overall, with even faster scaling up of clean energy production needed as a result.

Since hydrogen has a relatively low volumetric energy density, its transportation, storage, and final delivery to the point of use comprise a significant cost and results in some of the energy inefficiencies associated with using it.

Getting hydrogen widely adopted

The interest in hydrogen as an alternative energy source to fossil fuels is growing rapidly, but pilots need to be happening more regularly and on a much bigger scale across the manufacturing sector for it to be adopted industry wide.

It also remains to be seen whether it will be accepted by a society that is focused on clean energy future and for us to now achieve the net zero emission target that Australian Government has committed to.

Hydrogen is probably not going to be the silver bullet for the manufacturing sector, although solar, offshore wind and battery storage have not proven to be either. What is required is a wide range of energy technologies that will enable us to decarbonise manufacturing efficiently. The manufacturing sector should not miss this unique chance to make hydrogen an important part of our clean and secure energy future.

How production planning can be more energy efficient

The efficient and economic allocation of resources is a major goal in the field of production planning and control. Therefore, Enterprise Resource Planning (ERP) systems are used to support the production planning process. Energy and power demands of manufacturing executions systems are increasingly monitored within factories to enable energy-efficient operations. What is needed is a systematic approach to integrate energy supply information to the entire production planning process within an ERP system.