As countries tout their net-zero goals to decarbonize economies and mitigate the impacts of climate change, many in government and industry have assessed what meeting such pledges will take, and hydrogen has emerged as a promising energy solution.
Europeans and Japan view hydrogen as an essential tool to attain their decarbonization goals in the power, transport and heavy industry sectors. Still, they will struggle to meet their projected hydrogen demand if the energy transition scales up. To meet future demand, they will need to import hydrogen from other regions with abundant hydrogen production assets.
This hydrogen supply gap will present the biggest economic opportunity for energy exporters like Russia, Saudi Arabia and Australia. These nations are already centering their decarbonization strategies on the exportation of low- and zero-carbon hydrogen.
Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman al-Saud, has said that his country seeks to become the biggest hydrogen supplier in the world. The kingdom announced that a large segment of the $110 billion Jafurah development would be used for hydrogen production via steam methane reformation and carbon capture, utilization and sequestration (CCUS). The world’s biggest oil exporter (Saudi Arabia) projects hydrogen exports could reach 4 million tons by 2030.
The U.S. is currently the pre-eminent global energy leader through its vast natural gas, oil and coal reserves, and nuclear energy technology. To maintain and extend our leadership, the United States must turbocharge its innovative prowess to compete in the energy transition. Hydrogen will be a key pillar.
American policymakers are waking up to this reality and creating a comprehensive framework to deploy hydrogen across sectors. The Department of Energy announced that its first Energy Earthshot aims to reduce the price of one kilogram of hydrogen to $1 within one decade. Congress also stepped up to support the U.S. hydrogen industry in the infrastructure bill by establishing four regional hydrogen hubs and $9.5 billion for infrastructure development.
In particular, the hydrogen hubs will establish the U.S. as a hydrogen leader and help scale production to meet the growing global demand for clean hydrogen. These hubs can harness vast resources across regions, including zero-carbon electricity like solar, wind, nuclear and hydropower for electrolysis and organic feedstocks like natural gas, biogas, municipal solid waste and low-value biomass for small modular reactors and gasification paired with carbon capture. Every region in the U.S. has access to at least one of these feedstocks, if not more, enabling broad participation in the hydrogen industry.
While the early federal policies and geographic potential in the U.S. are encouraging, policymakers can take additional steps to boost American competitiveness concerning hydrogen. They can provide long-term certainty by adopting a national strategy that emphasizes production growth and clean hydrogen exports. Additionally, leaders should encourage widespread hydrogen adoption through tax incentives for energy producers and other efforts that reduce costs over time. As production increases, it will be essential to establish trade relationships focused on hydrogen and leverage existing assets at ports.
Federal and state governments must establish hydrogen domestically, from production to all feasible end uses, to achieve mid-century carbon reduction goals. The United States’ economic and environmental hydrogen benefits can be extended to those at home and abroad, which will ensure America’s global energy leadership into the decades to come.
While the transition to decarbonized energy is really just getting started, we must ask what will keep the U.S. a global energy leader. The early U.S. policy signals are encouraging. However, our traditional energy competitors are advancing plans to seize a leadership stake in the global energy market. Let’s not throw away our shot to continue leading.
• Rich Powell leads ClearPath, a Washington, DC-based non-profit that develops and advances policies that accelerate breakthrough innovations to reduce emissions in the energy and industrial sectors.