Is hydrogen the fuel of the future? There are deep-pocketed players who believe so, and national governments are providing the carrot-and-stick incentives to potentially make it happen.
For hydrogen to take off in the 2020s, it will have to overcome a dark past. The Hindenburg disaster of 1937 was one of the most famous aviation accidents of all time, and hydrogen was the culprit.
The Hindenburg was an 804-foot Zeppelin, also known as a German Airship. Zeppelins were cutting-edge technology in the 1930s — seen by many as the future of air travel — and the Hindenburg could cross oceans at speeds of up to 84 miles per hour.
The Hindenburg, in its second year of service, had already made multiple trips between Germany and the United States when it disastrously attempted to land at Naval Air Station Lakehurst in Manchester Township, New Jersey, on May 6, 1937.
Because of U.S. export restrictions on helium, the Hindenburg was filled with highly flammable hydrogen as a substitute. An apparent spark near a gas leak caused the hydrogen to catch fire, creating a catastrophic spectacle.
If you’re a classic rock fan, you may remember the Led Zeppelin I album cover showing a black-and-white photo of a burning airship; that was the Hindenburg as it sank in a ball of flame. The whole concept of airships for passenger travel sank with it.
Today, more than 80 years later, hydrogen is getting a real shot at redemption. It even has a role in the future of air travel, though zeppelins aren’t in the picture this time.
Airbus, the European aircraft giant, has announced plans to develop a commercially viable, zero-emission, hydrogen-powered airplane by 2025.
“Hydrogen is the most promising energy type to allow us to power aircraft and aviation with renewable energy,” Airbus engineer Glenn Llewellyn told Bloomberg. “Battery technology is not evolving at the pace required for us to achieve our ambition.”
Battery-powered planes are a nonstarter because the batteries are too heavy relative to the amount of energy they carry. Cars and buses can easily pull into charging stations, but you can’t recharge on a transatlantic flight.
Airbus turned to hydrogen after an exhaustive study of zero-emission alternatives. If they work out all the details — like how to transport and store the hydrogen safely — the production of hydrogen-powered aircraft could begin in the late 2020s, and the nearly $3 trillion aviation industry could be largely emission free by the late 2030s.
The zero-emissions target is being pushed by governments with increasingly aggressive anti-pollution mandates. The U.K. government has said it will ban the sale of new gas and diesel vehicles by 2030, for example, and Japan is poised to require all new vehicles to be hybrid or electric by 2035.
Hydrogen has long been used for various industrial manufacturing processes. For the most part, though, industrial hydrogen is derived from fossil fuels, which means hundreds of tons per year in carbon emissions (a big no-no for governments committed to reaching carbon-free status by 2050).
The hydrogen of the future comes in two forms, green and blue.
- “Green” hydrogen uses renewable energy processes, like solar and wind, to generate hydrogen through water electrolysis (separating out the “H” in H2O).
- “Blue” hydrogen is produced from natural gas in conjunction with carbon capture and storage. Even though a fossil fuel (natural gas) is used, the process is still considered carbon-free.
Blue hydrogen advocates point out how easy it could be for consumers to switch from gas-powered heat to hydrogen-powered heating solutions. In theory at least, it only requires a small modification to an existing natural-gas-powered boiler to make it work with hydrogen, and existing natural gas networks could still be used along with a carbon capture process.
Skeptics of hydrogen note that the stuff is still highly flammable, that hydrogen molecules are smaller than gas molecules (increasing the risk of leaks), and that most of this is still experimental.
Still, the hydrogen train is rolling down the track — literally.
On Sept. 17, 2018, Germany unveiled the world’s first hydrogen-powered train, with the ultimate goal of replacing diesel-powered trains. Following the successful completion of an 18-month testing phase for the new hydrogen train technology, Germany began construction on the world’s first hydrogen train filling station in Bremervörde, Lower Saxony, in July 2020.
The economics of hydrogen are still questionable, but that is where government muscle comes in.
A political commitment to the phasing-out of gas and diesel vehicles, coupled with ambitious “net zero” carbon emission targets over the next 20 to 30 years, are spurring governments to see hydrogen as the bridge to a zero-carbon future.
Bloomberg New Energy Finance estimates that, on a global basis, hydrogen will require $150 billion worth of government subsidies between now and 2030 in order to reach critical mass, with private-sector investment at many multiples of that (the subsidies are meant to prime the pump).
That sum is not a big stretch, however, given the increasing dominance of environmental issues (the Millennial generation, larger in size than the Baby Boomer generation, is particularly green-minded) and the new era of fiscal dominance we have entered (in which multi-trillion-dollar stimulus packages come with sequels).
Possible investment plays related to hydrogen include Linde (NYSE: LIN), a U.K.-based industrial gas company; L’Air Liquide (AIQUY), a French industrial gas company; and Cummins (NYSE: CMI), a maker of specialized engines. There are also up-and-coming start-ups pushing the envelope for hydrogen-powered car technologies, particularly in China.
It’s still early days, but hydrogen is definitely an up-and-coming fuel to watch, and possibly invest in — as long as there aren’t more Hindenburgs.
