In the first week of October 2021, Lux Research attended the 2nd World Hydrogen Congress held in Amsterdam, Netherlands. It was one of the first major industry events to be held in person following the global pandemic, and over the course of two days, more than 900 people presented their perspectives on the hydrogen economy and networked with each other. The crowd was in an uncharacteristically cheerful mood, likely because it was the first physical conference for many us since COVID-19 but also because there is no denying that the hydrogen economy is booming right now, and it was heartening to be among one's peers at such a time.
After sitting through as many presentations and panel discussions as humanly possible (there were several tracks running in parallel), here are the main takeaways from the event – we highlight both the good and the not-so-good from two days of events.
"Collaboration" was THE buzzword of the event. Whether it was a Shell, TotalEnergies, SNAM, or Equinor presenting, it was clear that no company, no matter how big or small, believes that it can succeed alone in the hydrogen economy. Throughout the event, companies took every opportunity to laud their growing partnership portfolio (and each other) as they embark on their hydrogen journey. Collaboration is essential for many of them, as expanding into the hydrogen economy often means entering previously unchartered territories – there are few other initiatives like hydrogen where the success of one project relies on the involvement of the oil and gas, utility, mobility, and heavy industrial sectors. While this cross-industry camaraderie forms the backbone of the hydrogen economy today, it does raise the question – how long until partners turn into competitors as companies vie to become vertically integrated hydrogen players? This question asked by an audience member drew a few chuckles from the crowd and received the predictably politically correct answer that there is enough space in the hydrogen economy for everyone – while Lux largely agrees, we also believe that there will be instances where the competition will be fierce due to a lack of solution providers. We already see this happening in the electrolyzer space, as developers are facing unprecedented demand for electrolyzer systems and responding by rapidly ramping up manufacturing capacity to the GW scale – however, the handful of electrolyzer companies are not enough to meet the projected demand for green hydrogen, which will likely lead to postponed or even canceled projects. This is why entering this growing space at an early stage is crucial, as partnership opportunities will become limited as technology developers are locked in competing partnerships or snapped up through acquisition.
"We want net-zero, but we need it in 2050, not now. So why be such perfectionists?" This (paraphrased) statement was made by a panelist during a discussion on blue hydrogen. While the words "blue hydrogen" often drew sneers two years ago (especially from our European counterparts), it was encouraging to see the tide turning. Blue hydrogen featured prominently at the conference, with presentations and panel contributions from Johnson Matthey, Haldor Topsoe, Shell, and Equinor, and there is growing, albeit reluctant, acceptance that blue hydrogen has its place in the hydrogen economy. While the crowd remained largely pro-green hydrogen (judging by the thinly veiled accusatory tone of comments during the Q&A sessions), the scale-up of the hydrogen economy will likely be driven by blue hydrogen in the near term, and vilifying blue in favor of green is not helpful. Lux itself is no stranger to acrimonious debates on blue vs. green, but it appears that the industry is now ready for a more nuanced conversation on the topic.
Enough with the color palette. As the debate on blue vs. green hydrogen raged on at the event, there was a small but loud faction that called for the abolition of the hydrogen color palette altogether. Their reasoning is that green hydrogen is not always "cleaner" than blue hydrogen and that labeling hydrogen with a single color allows some companies to get away with making misleading claims that could eventually harm public acceptance of the hydrogen economy. They are right, of course – "green hydrogen" made from fossil grid electricity has a higher carbon footprint than grey hydrogen, and yet people often disregard this fact. The hydrogen color palette is a flawed system that overlooks the actual emission profile of hydrogen and removes all nuances from discussions comparing various production methods for hydrogen. Lux itself is guilty of falling into this trap, and we sometimes use the terms "green hydrogen" under the assumption that the source of electricity is renewable, which is not always the case. Is it time for the industry to move on from the color palette? Perhaps, but only when we have a globally recognized and standardized system for qualifying the emission profile of hydrogen – e.g., low-carbon hydrogen in the U.K. may not qualify as low-carbon hydrogen in the EU if the two regions have different thresholds for allowable carbon intensity. Moving from one vague and undefined system to another similarly vague and undefined system is not the way forward.
"Why should we use hydrogen when batteries are cheaper?" This was unsurprisingly the most popular question at the conference and was asked even in tracks that had nothing to do with mobility. While the presenters and panelists were gracious enough to address the question, their strained smiles betrayed their obvious frustration with having to deal with the same question over and over again. Yes, batteries are cheaper. Yes, batteries are better than fuel cells for passenger vehicles. No, fuel cells are better for medium- and heavy-duty transport even if they are more expensive because they offer more range and faster refueling time. Unless we have a battery that offers the same energy density as hydrogen coupled with equivalent charging times, it is time for us to move on from this debate and stop pitting batteries against fuel cells because they target different segments of the mobility sector.
Where were the steelmakers? Steelmakers are set to play a key role in driving up the demand for low-carbon hydrogen, which is crucial for the industry to reach carbon neutrality. And yet, the only impression that steelmakers made on the conference was through their complete lack of presence – while we do not pretend to have met every single participant at the event, Lux could not find any presentations or even attendees from steelmakers like Tata Steel, ArcelorMittal, or SSAB. It is unclear why the steel industry did not see it necessary to participate in this event, but its absence was noteworthy, especially given that European steelmakers are heavily investing in hydrogen projects, and this would have been the ideal platform for them to showcase their progress.
The American and APAC perspective was lacking. This is no fault of the organizers, as the global pandemic and stringent travel restrictions severely limited attendance to those in the European region. However, it did lead to a very Euro-centric perspective of the hydrogen economy, which, while immensely valuable, overlooks the role that regions such as Australia, the Middle East, South America, the U.S., Japan, and Korea will play in the hydrogen economy. As the global hydrogen supply chain starts to take shape, an understanding of the global landscape, including the challenges and particularities of each region, is crucial for the successful scale-up of the hydrogen economy. While it was unfortunately not possible this year, we hope that next year's edition will provide a more diverse perspective.
The conference was an excellent and much-awaited opportunity for key stakeholders in the hydrogen economy to mingle and exchange their thoughts in person. Collaboration was a recurring theme throughout the conference, and the diverse backgrounds of the audience which included energy, chemicals, automotive, and other industrial companies, underlined the importance of hydrogen for these sectors to transition to carbon neutrality. As succinctly put by Paul Bogers, Vice President of Hydrogen at Shell, in his presentation: "Hydrogen is the Swiss Army knife of the energy transition."