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The Future of Hydrogen Chapter 1: Introduction Technology uncertainty is also evident in discussions about the ways in which hydrogen could be transported over long distances, and the formats in which it could be delivered to end-users. Challenge 2) Value chain complexity and infrastructure needs Hydrogen value chains can follow many different paths (Figure 5). Demand for low-carbon hydrogen can come from a variety of sectors, and there are many permutations of hydrogen supply and handling that could meet it. The most cost-competitive outcome will, moreover, be different in various regions and applications. For each possible value chain, investments and policies need to be synchronised in scale and time if hydrogen is to be produced and delivered to end users that are ready to use it. Building trust throughout the value chain so that investments are co-ordinated takes time and may require new contractual relationships. In some cases, governments and companies will need to think and act cross-sectorally in new ways to take full advantage of hydrogen’s flexibility. Infrastructure such as pipeline and delivery networks is of particular importance for a new energy carrier such as hydrogen. While hydrogen can be produced locally, its storage and distribution benefit from economies of scale. When produced from fossil fuels in particular, its supply is cheaper when centralised. In the case of hydrogen use for road transport, where a network of refuelling stations will be a precondition for widespread adoption of FCEVs, the current pace of infrastructure development is a brake on adoption. The ability of governments to commit to large (and necessary) infrastructure investments is limited in many countries and regions: public–private investment models can help, but may add further complexity. In some cases, these investments will also need to be co-ordinated across borders, requiring international collaboration at a level not yet seen for hydrogen. Challenge 3) Regulations, standards and acceptance Around the world, the state of existing regulations and standards currently limits hydrogen uptake. Certain regulations are unclear or not written with new uses of hydrogen in mind and do not allow exploitation of the full benefits hydrogen can provide. They deal with a range of technical but important questions such as how and where pressurised or liquefied hydrogen can be used, who can handle hydrogen, where hydrogen vehicles can go, tax regimes for conversion between energy carriers, whether CO2 can be stored, and how much hydrogen can be present in natural gas pipelines. They need to be updated if hydrogen is to have the opportunity to fulfil its potential. Some important standards have yet to be agreed, including standards dealing with hydrogen vehicle refuelling, gas composition for cross-border sales, safety measures, permitting, materials and how to measure lifecycle environmental impacts. The issue of lifecycle impacts poses a particular challenge in the case of hydrogen because identical hydrogen molecules can be produced and combined from sources with very different CO2 intensities. Unlike electricity, hydrogen and hydrogen-based fuels can be blended with fossil fuels in mixtures that end-users cannot identify. Accounting standards for different sources of hydrogen along the supply chain may be fundamental to creating a market for low-carbon hydrogen and need to be developed on an internationally agreed basis. Hydrogen comes with safety risks, high upfront infrastructure costs and some of the industrial dynamics of fossil fuel supply and distribution, especially when paired with CCUS. It is not yet clear how citizens will react to these aspects of hydrogen, or how they will weigh them alongside the convenience and environmental benefits of some hydrogen applications, as well as the potential importance of hydrogen to long-term sustainability. PAGE | 28 IEA. All rights reserved.PDF Image | The Future of Hydrogen 2019
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