Lighter-than-air hydrogen could help decarbonise heavy industry – a prospect that is fuelling investment from energy giants, the mining sector and others.

Boyden's perspectives on the news and trends that are transforming industries

Industries such as steel, concrete and chemicals are labelled “hard to abate” in terms of reducing carbon emissions. As more investment goes into decarbonizing heavy industry, a variety of sectors want to take the lead with hydrogen, which is believed to have high potential in decarbonisation and energy storage. While most hydrogen is currently produced from fossil fuels using carbon-intensive processes, it is forecast to become much cleaner and grow into a trillion-dollar industry in the next few decades.

Governments and companies are investing fortunes to accelerate the process. Maheep Mandloi of Credit Suisse draws a comparison to how the liquefied natural gas industry evolved. Chiefly, it was powered by energy giants, uniquely capable of pooling the necessary capital and expertise. The energy sector wants to do the same for hydrogen. Earlier this year Chevron announced a new business unit focussed on “commercialization opportunities in hydrogen, carbon capture, and offsets”. In September the U.S. oil giant said it will invest $10 billion in lower-carbon technologies, including hydrogen energy.

Other supermajors including BP, ExxonMobil, Royal Dutch Shell and TotalEnergies have also announced investments in hydrogen clusters and technologies, according to The Economist. Saudi Aramco, the world’s largest oil producer, aims to be the world leader in low-carbon hydrogen production in the 2030s, says Chief Technology Officer Ahmad al-Khowaiter. Hydrogen is thus part of its strategy to maintain supremacy in energy as oil falls out of favour.

Other sectors which have historically been primary contributors to greenhouse gas emissions are also tapping into hydrogen. Andrew Forrest, Chairman of Australian mining giant Fortescue Metals Group, recently announced that his firm’s Fortescue Future Industries division will build the world's largest green hydrogen manufacturing facility. It would primarily use the water electrolysis production method. Processes such as water electrolysis earn the “green” descriptor because they can be done directly with any source of electricity, including renewables like solar and wind, rather than fossil fuels.

Apart from energy and mining, other industries are focusing on hydrogen as well. Seifi Ghasemi, Chairman of industrial gas supplier Air Products, believes his company can overtake supermajors which have rested on their laurels. “They think hydrocarbons are here forever and don’t think anybody can disrupt them,” he says. Air Products is making a huge effort, developing hydrogen megaprojects around the world. James West, who directs research in oil services, equipment and drilling for Evercore, sees the potential of industrial gas firms to lead the hydrogen era. Still, they are up against giant competition.

This website uses cookies to ensure you get the best experience on our website.  Learn more