Traction around the hydrogen economy is building as more companies look to become carbon neutral. We analyze corporate earnings transcripts to better understand the current outlook.
In the push for carbon neutrality, hydrogen is gaining momentum.
Hydrogen can be a clean source of energy — when used in a fuel cell to produce electricity, the only major waste product is water. Hydrogen can also be used for a variety of applications, including long-duration energy storage, fuel for transportation, and as part of industrial processes.
Furthermore, industry experts estimate that common decarbonization approaches — such as electrification, renewable energy, and battery energy storage — will only meet about half of the world’s projected energy needs. This provides room for hydrogen to act as a crucial complement to these technologies for applications, like commercial transport, that other approaches might be less well-suited for.
That said, the technology faces a number of significant challenges. For one, the process of first making hydrogen and then converting it into useful energy can introduce inefficiencies compared to other decarbonization methods. Moreover, most of the hydrogen used today is produced using fossil fuels — creating associated emissions — as “green,” emission-free hydrogen remains expensive to produce.
But the outlook for hydrogen is improving. Falling renewable energy costs and tech advancements are making green hydrogen production more affordable, which could help it gain a bigger share of the global energy mix and boost investment in the “hydrogen economy” — the cycle of production, storage, transport, and distribution of hydrogen as a source of energy.
Though the transition to a hydrogen economy will likely take a decade or more, the promise is compelling for many stakeholders. And corporates are paying attention.