Demystifying Green Hydrogen

The solution to decarbonization or a drain on resources? Too expensive or great value for money? Let’s debunk the myths and explore the facts around green hydrogen.

The move away from carbon-intensive fossil fuels is paving the way for a wide range of renewable energy solutions. Among them, green hydrogen has the potential to play a crucial role in the transition to a sustainable future. As a versatile energy carrier, green hydrogen offers a clean alternative to fossil fuels in sectors that are challenging to decarbonize, including shipping, steel, cement and chemicals. At OMV, green hydrogen is a key part of the roadmap to sustainable fuel and chemical production.

While still at a relatively early stage, with more development green hydrogen could be transformative in global efforts to decarbonize hard-to-abate sectors such as transport, energy and heavy industry. Yet as with any new technology or emerging industry, some have expressed doubts, and conversations around it have been clouded by misinformation.

Here are the most common myths about green hydrogen, and the truth behind them.

Myth: Green hydrogen is burned by industries

Hydrogen burns, quickly and intensely. Perhaps because of these well-known properties it is primarily thought of as being burned for power by industries needing to replace fossil fuels. It is used for that, and in fact helping those industries avoid carbon emissions because burning it emits only water vapour.

But that is by no means its only function. In fact, we at OMV use green hydrogen in its molecular form as a raw material. This allows us to produce more sustainable fuels and base chemicals. When fed into the refinery process, green hydrogen results in products like renewable diesel and Sustainable Aviation Fuels (SAF). It can also be used in heavy goods transport, where batteries are not yet powerful or efficient enough.

Green hydrogen is also a good energy storage molecule that could be used to absorb the power generated during intermittent peaks of renewable energy generation due to sun and wind variance. It makes long-term, large-scale energy storage possible, and so could help stabilize the electricity grid. The excess solar power generated during summer, for example, could be stored as hydrogen and then deployed during the winter months when solar power generation is not as strong.

Myth: Green hydrogen is too expensive to consider as a realistic alternative

Green hydrogen is objectively more expensive to produce and use than its fossil fuel counterpart. Yet this assessment is too simplistic to take at face value, and we need to delve further into changing market trends and how we calculate cost to get an accurate picture. Green hydrogen is expensive because of the costs of production, storage and transport when both capacity and infrastructure are limited.? As research and development continue, we can expect to see breakthroughs in electrolysis technologies, renewable energy integration, and hydrogen storage solutions as well as more infrastructure to facilitate it. The better the technology, the greater the infrastructure, the lower the price. We’re already seeing this happen around the world, and some estimates suggest that production costs will fall by 50% by 2030.

Most importantly, while the upfront cost is higher than fossil fuels today, there are other costs we don’t see on the sticker price. And they are steep.

We pay for fossil fuels with more than money; we pay with added time to transition, with rising temperatures, with hotter summers, colder winters and increasing instances of extreme weather. Renewable energy sources like green hydrogen have a dual value: as fuel today and an investment in tomorrow.

Myth: Green hydrogen consumes too much water

Producing hydrogen at the scale needed to meet green goals will require a substantial amount of water in raw terms, but relatively little in the context of how much we already consume in total. Green hydrogen often uses less water than making hydrogen from fossil fuels or generating some types of electricity, but with water management a major climate concern, it will be crucial to manage resources as we ramp up green hydrogen production.

Similarly, while green hydrogen production does require land for renewable energy generation, land use concerns may be overstated. Electrolyzers themselves have a relatively small footprint.

Myth: Green hydrogen is still decades away

Scaling is a matter of capacity and will. The will is immense, and the capacity is growing – even faster than previously projected. It could play a key role in the global effort to decarbonize industry as early as 2030. By then, the EU aims to produce 10 million metric tons per year domestically and import a further 10 million, as part of its REPower EU strategy. Over 40 countries have developed national hydrogen strategies.

But it’s not just about targets. Green hydrogen projects are underway across Europe, with many facilities set to come online over the next decade.

OMV is actively working to lead the development and deployment of green hydrogen technologies. In 2024, we are about to begin operations at the largest electrolyser plant in Austria. The plant will be powered entirely by hydroelectric, wind and solar energy via power purchase agreements (PPAs) and have a production capacity of 10 MW. This will give us the means to produce green hydrogen for the first time and so save up to 15,000 metric tons of CO2 a year. OMV Petrom received funding for two more green hydrogen electrolyzers, with a combined capacity of 55MW, at the Petrobrazi refinery in Romania.

And we’re not stopping there. We are advancing plans for a significantly larger electrolysis plant, with an annual production capacity of up to 200 MW, near our Schwechat refinery in Austria. Subject to a final investment decision, operations are planned to begin in 2027.

Myth: Green hydrogen is the answer to decarbonization

The potential for green hydrogen is immense, but it is important to keep in mind that it is one part of a greater puzzle. While green hydrogen is a versatile and important tool for decarbonization, it’s not a universal solution – nor should it be, to ensure energy security.

Green hydrogen is theorized to be best suited to transform hard-to-abate sectors like heavy industry and long-distance transport. A diverse mix of clean energy solutions will be needed for full decarbonization across use cases. That’s why alongside green hydrogen, OMV is committed to exploring other promising avenues for alternative energy, including geothermal and e-mobility. There are many roads to a greener, more sustainable future. We should not limit ourselves to exploring only one.

The facts about green hydrogen’s future

Today, the green hydrogen economy stands at the border of transformation from a theoretical solution to a game-changing innovation.

The number of projects in the pipeline has grown sevenfold from 2020 to 2024 and Europe is leading the way, with 40% being developed here. Saudi Arabia’s NEOM Green Hydrogen Project is set to become the world’s largest when it comes online, giving us an exciting glimpse into the future.

Yet while the industry is set to continue expanding in the coming years, its growth must take off even further to meet the 2050 Paris Agreement targets.

By fostering collaboration, addressing misconceptions, and driving technological advancements, we can accelerate the integration of green hydrogen into our energy landscape, creating a more sustainable and prosperous industry for generations to come.