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
The hydrogen atom is the lightest and simplest chemical element, consisting of a single electron and a proton. Yet it is the best of fuels and the source of energy for the sun and stars: hydrogen represents more than 90% of the mass of the sun and nearly 75% of the mass of our galaxy. Its low density and therefore its evaporation explain why, on Earth, hydrogen is mainly present in recombined form in water and hydrocarbons.
There are two main sources of hydrogen production, hydrocarbon reforming and water electrolysis. The former is the most common today but generates carbon dioxide during combustion. The second makes it possible to produce "green" hydrogen, provided that the electricity used for the electrolysis of water is itself produced from renewable energy sources.
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.
Would you like to discuss this subject further with us?
The information provided on this page is for information purposes only and has no contractual value. The content of this page is not intended to provide investment advice or any other investment service and does not constitute an offer, a personalised recommendation or advice from Societe Generale Private Banking with a view to the purchase or subscription or sale of investment services or financial products or an investment in the asset category mentioned. The information presented above does not constitute legal, tax or accounting advice.Société Générale Private Banking cannot under any circumstances be held liable for any investment decision taken by a reader on the basis of the information presented on the page.
No Société Générale Private Banking entity undertakes to update or modify the present page and will not assume any responsibility in this respect. No Société Générale Private Banking entity shall be held liable in the event of direct or indirect loss related to any use of this publication or its content. No Société Générale Private Banking entity offers any guarantee, express or implied, as to the accuracy or completeness of this information or as to the profitability or performance of any asset class, country or market.
The historical data used and the information and opinions cited are taken from or based on external sources that Société Générale Private Banking entities consider reliable but which they have not independently verified. No Societe Generale Private Banking entity assumes any responsibility for the accuracy, relevance or completeness of these data.
Non-financial analysis, also known as ESG analysis (Environmental, Social, Governance), is essential for evaluating a...
Joint interview, Croisine Martin-Roland, Head of Philanthropic Support, and Jean-Christophe Jouannais, Sustainable...
Key report
According to the Brundtland Report of 1987, sustainable development aims to meet the needs of the present without...
Sustainable finance is a concept that integrates environmental, social, and governance (ESG) criteria into investment...