Hydrogen: a crucial issue for climate transition


In 1874, in his famous novel The Mysterious Island, Jules Verne prophesied the advent of hydrogen in response to the exhaustion of coal: "I believe that water will one day be used as a fuel, that hydrogen and oxygen, which constitute it, used alone or simultaneously, will provide an inexhaustible source of heat and light of an intensity that coal cannot have." 145 years later, at a time when the climate emergency has never been so urgent, this energy vector is at the heart of all attention and is enjoying unprecedented acceleration.


Carbon frugality: a global objective

As a follow-up to the Paris Agreement, the European Commission has set a target for offsetting its CO2 emissions by 2050. This objective necessarily involves the creation of a carbon-free energy production and distribution sector. Carbon frugality has become a key focus of economic policy in Europe and around the world. While the old continent seems to be a step ahead, last September China announced ambitious carbon neutrality targets for 2060 and, in the United States, the elected candidate Joe Biden has already unveiled his intention to return to the Paris Agreement.

Hydrogen, an atom with a high green potential

Florida, with 29 of the 270 electoral votes needed to win the election, has often been the most contested "swing" state. Repealing election laws made it possible to count ballots election date, and Florida was one of the first states to release partial results in favor of D. Trump overnight. The loss of this key state makes it difficult for J. Biden to win and precludes the possibility of winning a majority in the Senate and the House of Representatives. Biden's political agenda is therefore largely blocked, as we seem to be moving towards a status quo in Congress with a Republican Senate and a Democratic House of Representatives.

The need to create an ecosystem

"Green" hydrogen is a central element of the European Commission's climate strategy. The hydrogen plan is deployed in three phases over the period 2020-2030 and aims to decarbonise a majority of industrial and transport processes. It is by adopting an approach that the choice of hydrogen takes on its full meaning. Indeed, the production of hydrogen by electrolysis and then its use in fuel cells as an electricity generator reduces the efficiency of this energy source compared to that of fossil fuels. However, when combined with renewable energies such as solar or wind power, hydrogen makes it possible to store and defer the use of energy, thus improving the efficiency of the system as a whole. The development of fuel cells will also make it possible to significantly increase the autonomy of electric vehicles, with a charging time comparable to that of a combustion vehicle.

The idea is therefore the creation of a holistic ecosystem and value chain: hydrogen producers, community services, car and rail manufacturers and the emergence of new entrants.

So it seems Jules Verne was right about the potential of hydrogen. But if the shipwrecked people of The Mysterious Island were able to escape in time before the explosion of the island, there is no other way out for humanity than to learn how to tame the climate and the impact of our actions on our ecosystem. In the face of the climate emergency, hydrogen is emerging as a vector for the future energy transition.

Chief Investment Officer Société Générale Private Wealth Management