Blog: ‘Roadmap to a US Hydrogen Economy’ Study Launch
By Mike Giovanniello, CHBC Clean Energy Fellow
Hydrogen is complicated. It’s an element, a mobility fuel, an industrial feedstock, and a long-term storage option. It can be made using renewable electricity, natural gas, agricultural byproducts, and municipal waste. It is the simplest and most abundant element in the universe, but with seemingly endless clean energy applications. The often espoused ‘hydrogen economy’ is far from easy to wrap your head around.
Whether you’re a cleantech professional or recently discovered hydrogen technology, you’ve likely heard this: according to some of the world’s smartest minds, hydrogen will play an instrumental role in building a clean and sustainable energy future.
But how? And how quickly? In what sectors? Prioritizing which application? And at what cost?
Like hydrogen, the answers are… complicated. But now, thanks to McKinsey’s new study ‘Roadmap to a US Hydrogen Economy,’ understanding the core benefits, timeframes, and mechanisms behind developing a hydrogen economy are not.
Conducted in collaboration with the Fuel Cell and Hydrogen Energy Association, as well as 20 companies and organizations in the hydrogen industry, the Roadmap clearly outlines what a hydrogen economy means for the United States and how we can get there.
With a strategic approach, hydrogen could reduce national CO2 emissions by 16% and NOX emissions by 36% by 2050. Hydrogen could account for 14% of total energy demand while supporting 3.4 million US jobs and generating $750 billion in revenue. And it could be 100% domestically produced, meaning a hydrogen economy isn’t just good for business and the environment, it’s good for US national security and energy independence.
The transition could be achieved in four phases with specific policy and deployment milestones. In the immediate future (2020-2022), the Roadmap calls for establishing “dependable and technology-neutral decarbonization goals in more states and at the federal level” and focusing on “commercially viable applications in early adopter markets,” namely forklifts and fuel cell electric vehicles (FCEVs) in California. In the next phase, early scale-up (2023-2025), renewable hydrogen production starts expanding, bringing down costs and enabling end-user applications to scale beyond early adopter states.
Then comes diversification (2026-2030). Building on early adopter segments, new hydrogen production pathways, and end-uses begin to reach the market. Medium and heavy-duty trucking develop nationwide. Established hydrogen markets, like ammonia production and petrochemical refining, transitions to renewable hydrogen, spurring cost reductions that allow hydrogen’s introduction into difficult to decarbonize industries, including shipping and aviation. By 2030, there are 1.2 million FCEVs on the road, supported by 4,300 refueling stations and $8 billion in annual investment.
That brings us to broad roll-out (2030 and beyond). During this period, “hydrogen is deployed at scale in the US” and “most applications achieve cost parity with fossil fuel alternatives through sufficient pricing of externalities, and public support for market introduction can be phased out.” With cross-sector synergies further driving down costs, production and end-uses rapidly expand, and it is from this point that we begin to develop a true ‘hydrogen economy.’
Achieving hydrogen’s potential relies on “setting the north star” with technology-neutral decarbonization goals, “kickstarting markets with incentives and support,” and “making systemic changes pave the way for a hydrogen economy.” Under this framework, the Roadmap outlines nine key actions and provides a comprehensive analysis of the relevant technologies and markets.
The full report can found here: Roadmap to a US Hydrogen Economy. It includes a 13-page Executive Summary that is of value to anyone involved or interested in the hydrogen sector.
Our thanks to McKinsey, FCHEA, and partner organization for their invaluable insight and perspective.