There's a lot of talk about hydrogen's potential. But transportation costs represent a big challenge

The buzz astir hydrogen has gotten progressively large successful the past fewer years — galore spot it arsenic an important instrumentality successful reducing the biology footprint of dense manufacture and helping economies deed net-zero goals.

The greenish hydrogen sector, which is centered connected producing it utilizing renewable sources of vigor similar upwind and solar, has drawn peculiar involvement and boasts immoderate high-profile backers.

They see German Chancellor Olaf Scholz, who successful 2022 called it "one of the astir important technologies for a climate-neutral world" and "the cardinal to decarbonizing our economies."

In the satellite of business, multinationals from Iberdrola to Siemens Energy are besides looking to marque plays successful greenish hydrogen.  

But portion there's a immense magnitude of excitement astir the imaginable of hydrogen — the International Energy Agency describes it arsenic a "versatile vigor carrier" — determination are besides undoubted challenges.

For a start, the immense bulk of hydrogen production is inactive based connected fossil fuels, not renewables — a information intelligibly astatine likelihood with net-zero goals.

And erstwhile it comes to greenish hydrogen specifically, accumulation costs are a important issue, and volition request to beryllium reduced successful the years ahead.

Transporting hydrogen from accumulation sites to users is different arsenic important origin to consider.

"Hydrogen is beauteous costly to move," Murray Douglas, caput of hydrogen probe astatine Wood Mackenzie, told CNBC during an interview.

"It's much hard to determination than earthy state ... technically, engineering omniscient … it's conscionable harder," helium added.

Douglas is not unsocial successful highlighting immoderate of the hurdles successful delivering hydrogen.

The U.S. Department of Energy, for instance, notes cardinal challenges "include reducing cost, expanding vigor efficiency, maintaining hydrogen purity, and minimizing hydrogen leakage."

The DOE adds that much probe is required to "analyze the trade-offs betwixt the hydrogen accumulation options and the hydrogen transportation options erstwhile considered unneurotic arsenic a system."

In narration to the logistics surrounding greenish hydrogen successful particular, 1 area that volition request attraction is the determination of accumulation facilities.  

Often, these are earmarked for areas wherever sources of renewable vigor are abundant — specified arsenic Australia, North Africa and the Middle East — but galore miles distant from wherever the hydrogen volition really beryllium used.

Wood Mackenzie's Douglas referenced proscription options erstwhile reflecting connected the concern skyline for the adjacent 10 years.

"You nutrient the hydrogen, the greenish hydrogen, and past you would synthesize it into ammonia with nitrogen," helium said.

The shipping of ammonia was, Douglas noted, "a beauteous established exertion and manufacture — there's already a clump of receiving ports successful place."

This ammonia could past beryllium sold straight to extremity users, specified arsenic fertilizer producers.

An alternate enactment would beryllium to "crack the ammonia backmost into hydrogen," though this would not beryllium without its ain issues.

"As soon arsenic you commencement 'cracking' backmost into hydrogen use, you commencement to incur immoderate … rather large vigor losses," Douglas said.   

In a connection sent to CNBC, Jorgo Chatzimarkakis, the CEO of manufacture relation Hydrogen Europe, was bullish astir the prospects for greenish hydrogen.

He said it would "become a planetary commodity," earlier stressing the value of having "an businesslike transportation system."

Chatzimarkakis besides highlighted the request for a certification program, due to the fact that "green hydrogen needs to beryllium that it is sourced from renewable energy."

Despite immoderate intelligibly large obstacles, partnerships and programs related to the proviso and organisation of greenish hydrogen are starting to instrumentality shape.

Earlier this year, for example, Greenergy and Octopus Hydrogen — the second is portion of the Octopus Energy Group — announced they had started a "green hydrogen transportation partnership."

Elsewhere, German steadfast Enertrag says it's been "operating a tanker and transport trailer to present ample quantities of greenish hydrogen to customers" since 2021.

And backmost successful 2022, Madrid-headquartered vigor steadfast Cepsa said it would enactment with the Port of Rotterdam to make "the archetypal green hydrogen corridor betwixt confederate and bluish Europe."

Though the exertion and cognition for hydrogen accumulation and transportation are there, 1 sticking constituent remains.

"The manufacture knows however to transport hydrogen," Wood Mackenzie's Douglas said, adding that the vigor and chemicals sectors person been transporting it for "a agelong clip — it's not new, it's conscionable expensive."

Expanding connected his point, Douglas said getting accumulation costs down is key. The little those are, the much manageable proscription costs would become.

"I'm not definite if there's immoderate benignant of magical ... outgo simplification exertion that's going to travel into the proscription broadside of the equation," helium added.

"We're not abruptly going to find … a amended worldly to vessel hydrogen through," helium said.

"If you're liquefying it, you person to get it precise cold, and that's conscionable expensive," helium went connected to add. "If you're turning it into ammonia, there's a outgo successful there, and past there's a clump of challenges astir toxicity."

"They cognize however to bash each of these things," helium went connected to conclude. "It inactive conscionable comes down to cost."