It’s Monday morning, we’re in the year 2030. I’m sitting in my EY office in Zurich, looking out of the window, a (very) strong coffee in front of me. I smile – EY has just announced achieving its climate neutrality commitment set in 2020 without carbon offsets. I notice the Migros truck making its way back down into traffic, heading to its next delivery location; fully carbon neutral, running solely on green hydrogen fuel cells.
It seems we are on the right path and even the most conservative investors and companies have finally joined the climate fight (Maybe the business case has finally crystallized for them too?).
I look at the calendar and I realize it’s 2021
Nine years to meet some of the most ambitious goals and commitments ever made? Looking at current developments, I’m not so sure. Yet, climate action is a central part of most government agenda today, led by the Europe’s recently passed Green Deal (2019). At the heart of this deal? Decarbonization spearheaded by a renewable energy transition. But renewable energies currently face severe limitations in terms of reliability to achieve a full transition. In particular, the ability to store generated energy during peak production cycles i.e., when the wind is blowing, and the sun is shining) and pull from storage during down cycles. The proposed solution? A EU hydrogen strategy published in July.
Green hydrogen: the renewables hero?
Due to its various qualities, hydrogen has found its way into industrial processes some time ago and new areas of application are continuously discussed. Add to this that hydrogen has nearly three times the energy content of gasoline  and its high burning point, which makes hydrogen the first viable alternative to coal and fossil fuels in industrial processes, you have a promising alternative energy source. Now introduce green hydrogen, which is emission neutral, to the equation and you have a new renewables hero. My kinda hero!
The impact green hydrogen is expected to have on industry and energy intensive sectors will be key to a decarbonized economy. In mobility and transport, hydrogen batteries are considered one of the few feasible alternatives in long-range transportation and logistics as large trucks have the capacity to store the required batteries. Green hydrogen transportation is not a far-off dream anymore: in 2018, seven Swiss companies, including the retail giants Migros and Coop, founded an association to build a national filling station network for hydrogen-powered vehicles and have launched a fleet of green hydrogen powered trucks.
So why has green hydrogen not yet scaled?
Green hydrogen is currently where solar, and wind were some 30 years ago. While it benefits from the successes of other green technologies, green hydrogen is not yet cost competitive (5 Euro/kgH2, vs. 2 Euro/kgH2 for hydrogen sourced from coal: “grey hydrogen”) and the infrastructure is still in its early stages. As a result, today only about 1% of global hydrogen is “green hydrogen”, meaning that is was created through electrolysis using renewable energies. This process needs about 1-2x the energy to produce than the hydrogen will provide, basically requiring an abundance of renewable energy, which we don’t have. To illustrate this challenge: to turn their entire steel production green, the R&D Head from an Austria Steel industry company told me on the phone, that they would need 500-600 windmills running full-time. In comparison, there are currently 1300 windmills in Austria, not factoring in periods of wind stillness.
Blue Energy to solve a chicken and egg situation
We are faced with a chicken-and-egg situation when it comes to adoption: to scale green energies sufficiently to achieve the renewables transition and the European 2050 goal of net-zero, hydrogen storage cells are indispensable. Yet, we need green energy to produce green hydrogen, while enough demand for hydrogen must be created so green hydrogen can become cost competitive to alternative solutions. To solve this problem, the European Green Deal provides that in the medium-term “blue hydrogen” will be used – a solution where CO2 emissions are captured and stored so they are not emitted into the atmosphere. A highly controversial solutions that has as many proponents as it has opponents.
Hydrogen is not a solve-it-all solution
The proposed hydrogen economy heavily depends on the provision and release of required funds. Investments of over €300bn are needed to install a sufficient number of electrolyzers and scale green hydrogen, not taking into accounted the upgrading of renewable energy production. But it’s money we can’t afford to be stingy about. And you know what? I’m excited. Because I’m convinced that with the right business models and approaches, we will turn hydrogen into a feasible long-term option over the next 30 years – the same way we did with renewables.
My research says we can!
 Staiger, R. and Tantau, A. (2020): Geschäftsmodellkonzepte mit grünem Wasserstoff, Springer Gabler
 Information from a personal interview