The IEA’s hydrogen report doesn’t miss the point. It just buries It.

by Andy Marsh, Contributor

The International Energy Agency (IEA) recently released a major new report on hydrogen, underscoring the remarkable political and business momentum surrounding the fossil fuel alternative, and touting its potential as a vital component of global efforts to build a “clean, secure, and affordable energy future.” The report takes a bold and prescient stance, and has rightfully inspired a torrent of press coverage about the future of hydrogen and its role in the renewable energy mix. 

However, much of this coverage seems to downplay or altogether overlook a fundamental truth that the IEA report makes clear: The transportation sector has already presented a clear path toward global adoption of hydrogen fuel and fuel cell technology, and we’re well on our way.

Casual observers would be forgiven for overlooking this fact, given the structure and sweeping scope of the IEA’s report. Entitled The Future of Hydrogen: Seizing Today’s Opportunities, the detailed study takes a close look at the subject of hydrogen, examining everything from its production and storage to the obstacles impeding its clean, widespread usage. The Future of Hydrogen concludes with seven recommendations for scaling up hydrogen over the long term, with the last of those recommendations laying out four key areas of opportunity where present day action could spur rapid infrastructure development, greater investor confidence, and lower costs. These four areas of opportunity are as follows:

  1. Make industrial ports the nerve centers for scaling up the use of clean hydrogen. 
  2. Build on existing infrastructure, such as millions of kilometers of natural gas pipelines.
  3. Expand hydrogen in transport through fleets, freight and corridors. 
  4. Launch the hydrogen trade’s first international shipping routes.

This is an excellent list, with each item representing a shrewd and sensible insight about the kinds of catalysts needed to help hydrogen achieve scale in the decade ahead. However, of the four areas identified above, it’s the third—expansion of the transportation sector’s hydrogen usage through fleets, freight, and corridors—that stands out. It stands out because it is the only area of opportunity that requires neither aggressive policy interventions to spur the overhaul of decades-old, multi-billion dollar industries, nor the creation of an entirely new segment of international trade. As the IEA notes, there are already “several impressive commercial enterprises for hydrogen and fuel cell vehicles today.” This means that expanding the presence of hydrogen in the transportation sector is merely a matter of pushing a nascent market to do what markets do best: grow. 

Hydrogen has already proven its value to fleet vehicle operators like FedEx, which is investing in vehicles that combine hydrogen and battery power to deliver superior range over those powered by batteries alone. Hydrogen has also demonstrated its dominance in high asset utilization applications for non-traditional transportation segments like material handling equipment, driving the deployment of over 20,000 hydrogen fuel cell forklifts throughout the United States in warehouses, stores, and manufacturing facilities. 

While there’s much to praise about the IEA’s hydrogen report, it does betray a certain bias that the agency shares with many international organizations of its ilk. Namely, the report consistently foregrounds blue-sky thinking around large-scale intergovernmental policy interventions over much more grounded ideas related to market forces already at work. 

It would arguably be most sensible to list the report’s “areas of opportunity” in order of feasibility—with the expansion of hydrogen in transportation coming first. After all, business leaders were discussing hydrogen fuel as the future of freight truck movement well before the IEA’s report was published, and with its light weight and impressive uptime numbers, it won’t be long before we see hydrogen at work in airplanes, drones, and autonomous vehicles as well. This sort of market-driven expansion of hydrogen in the transportation sector will naturally propel the growth of infrastructure that hydrogen needs to scale, with stakeholders building refueling stations and investing in clean hydrogen production.

Instead, the IEA gives top billing to a brilliant and hugely ambitious concept surrounding the transformation of industrial ports. To realize this vision in the near-term, the report calls for significant government project financing across borders, the development of international common standards (in a world where Americans are still playing hard to get with the metric system), and the implementation of complex and mostly untested policy incentives to drive coordination and clean production processes across disparate industries. 

This kind of thinking is echoed throughout the report’s 203 pages, which are filled with language describing actions with no identified actors, and imperatives designed to be enforced by powerful international coalitions that simply do not yet exist. Of course, it’s not the IEA’s job to outline the specific tactics and strategic alliances that will lead to a clean energy future. Their report is primarily intended to identify obstacles and long-term solutions, which it does very well.

However, these reports play a powerful role in framing the energy conversation. Unfortunately, the hydrogen industry can rightly be accused of past premature hype, putting forth ideas whose time was not quite ripe, and this report the same, even with the best of intentions. Most reporters covering the energy sector are, however, understandably jaded when it comes to these ambitious multilateral policy proposals, and the headlines reflect that.  If our goal is to encourage hydrogen adoption over the near and long term, we would all do well to place greater emphasis on the progress that’s already being made through the good work being done by both public and private partnerships through market forces and be clear about the ideas that are in need of further development. When it comes to the future of hydrogen fuel, the transportation sector is leading the charge.

Andy Marsh joined Plug Power as President and CEO in April 2008. Under his leadership, Plug Power has led innovation, bringing the hydrogen fuel cell market from concept to commercialization, as the world moves forward towards electrification. Early on, Marsh identified material handling as the first commercially viable market targeted by Plug Power. Today, the firm’s fuel cell solutions are leveraged by world leaders such as Amazon, Walmart, and Carrefour to power industrial electric vehicles. As President and CEO, Marsh plans and directs all aspects of the organization’s policies and objectives, and is focused on building a company that leverages Plug Power’s combination of technological expertise, talented people and focus on sales growth to continue the Company’s leadership stance in the future alternative energy economy. Mr. Marsh holds an MSEE from Duke University and an MBA from SMU.

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