Allianz SE

05/16/2023 | Press release | Distributed by Public on 05/16/2023 02:03

Emission possible: How hydrogen and insurance can shape a greener future

We have been here before - many times. Hydrogen powered the first internal combustion engine in the 1860s and the element has been regularly touted as a solution during emergencies, such as the energy crisis of the 1970s. The problem is that hydrogen is rare in nature as a gas. Usually, it is bound up with other molecules, and has to be extracted.

The laws of thermodynamics state that extracting hydrogen will always require more energy than you get when the hydrogen is used. This is one reason, up until today, hydrogen has mainly been used in processes where it is chemically essential, such as in the manufacture of ammonia (used in artificial fertilizers), explosives and methanol for use in plastics.

Another problem is that 95% is currently produced by 'dirty' means, that is, by burning coal (black hydrogen), lignite (brown hydrogen) or methane (grey hydrogen). This means almost all hydrogen produced in 2019 contributed 830 million tons of carbon dioxide into the atmosphere. This was about two percent of the total carbon emitted and around the same as produced by global air traffic.

However, there are other colors on the hydrogen color chart, including that produced by nuclear energy (pink) and renewable energies (green). The declining costs of renewable electricity are stimulating interest in producing hydrogen via electrolyzers, devices that use electricity to split water into oxygen and hydrogen. When the electricity comes from renewable sources, the resulting hydrogen is designated green, as the only emissions are harmless water vapor rather than greenhouse gases (GHGs).

Excess energy generated during periods of sunshine and days of strong winds can be used to create hydrogen. It can then be stored for weeks or even months and converted back to electricity on days when the skies are overcast or the turbines don't spin. If hydrogen can be produced at scale and without releasing CO2, it provides a way to decarbonize a range of sectors - including long-haul transport, chemicals and concrete and steel production - where it is proving stubbornly difficult to reduce GHG emissions.