Hydrogen solutions will play a significant role in achieving the goal of net-zero carbon emissions in the future. At least as long as it is green hydrogen.
The goal of a maximum of 1.5°C global warming by 2050, the target included in the 2015 Paris Agreement, has proven to be very challenging. Major efforts and investments are needed in many areas.
According to the International Energy Agency (IEA), new solutions using green hydrogen will be one of the cornerstones that are absolutely necessary to avoid missing the target. In fact, projections show that hydrogen is expected to account for 18% of the total energy use globally by 2050.
But then it has to be green hydrogen. Because hydrogen itself is nothing new. It has been used for over 100 years in refining and other industries. Between 2000 and 2020, the demand for hydrogen in these sectors grew by 50%.
So far, it has almost exclusively been so-called grey hydrogen, which is produced from fossil energy sources. The recent green hydrogen revolution was catalysed by technological advancements and associated cost reductions in electrolysers in recent years, allowing for the economically viable production of hydrogen from electricity at a large scale.
This means that industries that previously could never have been considered carbon-free, for example because they cannot be powered by direct electricity alone, can now be part of the global transition to greater sustainability.
At FuGen, we are now committed to contributing to the development of green hydrogen solutions, and have set up a subsidiary, VÄTERGY, in collaboration with strategic partners who have expertise in commodities markets, trading and technology. VÄTERGY will develop and invest in green hydrogen production and logistics projects for industrial and mobility applications.
The target of VÄTERGY is to become a leading player in the green hydrogen market in Europe by 2025. The business goal is to develop projects requiring a total CAPEX investment of EUR 1 billion within 5 years.
VÄTERGY’s operations will be geographically independent, and to the extent that we can use green electricity from FuGen’s facilities, we will of course do so. In other cases, we are committed to working with other local renewable power producers to create our hydrogen solutions for a sustainable world.