What are hydrogen companies investing in?

Which areas do the backers of hydrogen want to invest in?
01 August 2023

Interview with 

Eugene McKenna, Johnson Matthey


Molecules of hydrogen


Eugene McKenna leads business development, strategy and marketing at Johnson Matthey’s Hydrogen Technologies business, which is putting a lot of weight behind the hydrogen wheel.

Eugene - So I think I'm sitting in a room at the moment, and as I look around it, almost everything in the room has been made either from the energy or the molecules in fossil fuels. And the world economy, which has improved people's lives enormously over the last 30 years, 40 years, 50 years., all of that growth is fueled by fossil fuels. And if we look forward over the next 30 years, we've got to keep all of that economic growth, keep it going, make more people wealthier in the developing world and do it all while stopping using fossil fuels. That's an enormous task. It's impossible to do without hydrogen, not simply from the perspective of energy sources and energy carriers, but also from the perspective of the materials that we make the modern world from. We've got to make it again, but make it without fossil fuels.

Chris - So what technologies are you investing in or developing in order to do that?

Eugene - So Johnson Matthey has a long history in this, we're a 200 year old company. Actually fuel cells were invented over 200 years ago, and Mr. Johnson actually helped William Grove with the first experiments with fossil fuel. So it has been a long time coming. We're also involved in the fuel cells and the Apollo landing craft. Our interest is in the smart components at the heart of the machine's electrolysers that will make green hydrogen from renewable electricity. We also design the technology that will enable blue hydrogen that's making clean hydrogen from natural gas, but capturing the carbon dioxide. And we also have a chemical toolkit that will enable us to use that hydrogen, not just as a fuel source, but to make the modern world around us, for example, making nitrogen, making ammonia so that we can feed the world and making plastics. And finally, we also have an interest in that kind of reverse reaction, which is to take the hydrogen and turn it back into electricity through fuel cells to replace internal combustion engines.

Chris - One of the points made by Phil Broadwith in the piece we were just listening to was the amount of energy that you are moving when you use hydrogen compared with natural gas, the amount of energy that you're moving is very different. So is hydrogen sufficiently versatile and energy rich in order to be a substitute for natural gas, or is it just the best option we've got on the table at the moment?

Eugene - So I think the key thing about hydrogen is that it doesn't contain carbon. So it's a carbon free energy carrier and we've got to use it where it is the best possible thing to use that does not produce greenhouse gases. So it will be essential for some of the most carbon intensive processes in the world today, such as making glass and making steel. Making steel, for example, produces far more greenhouse gases than transport in the world. So these are things that are easily forgotten. Electricity is going to be very good for many applications, such as for heating houses. I would agree it will finally be a better solution for heating houses, but only once those houses are well insulated. In the UK for example, hydrogen has been used before for lighting and for heating when we had time gas, which was made from coal, from gasification of coal, even back in the 1960s. So the pipelines used to contain hydrogen and carbon monoxide. And the interest in putting hydrogen into that network at the moment is that we can have lots of blue hydrogen very quickly and there's got to be somewhere to put it and it can be put into the gas network at up to 20% without changing any of the end use applications. While we wait for the hydrogen fueling networks that will use hydrogen in fuel cell cars, for example.

Chris - The thing that really people are focusing on both in industry but also domestically, has got to be the bottom line though. What is happening to what's in their pocket. So what are the cost implications of doing this kind of thing? What are your models suggesting in terms of how big this market is and how much people are going to have to spend to do this?

Eugene - So, I do think it important that people bear in mind that what we're trying to do is to fuel the modern world without destroying it. So there shouldn't be a direct comparison with the fossil fuel world, but we see huge economies of scale in manufacturing the materials that are required to go through this energy transition. And as we build out renewables, we see huge potential to reduce costs as we drive technology forward, which is one of the great interests of Johnson Matthey. So for example, at the moment and before gas prices increased, grey hydrogen was around one and a half to $2 a kilogram, while green hydrogen was up to $8 a kilogram. Now over the next 10 years, we see the cost of green hydrogen dropping down towards that one to $2 a kilogram level, all driven by improvements in manufacturing and reduction in costs of fossil fuels. And if we look at the United States at the moment and the regulatory environment that they have there at the moment where they're giving $3 a kilogram for the production of clean green hydrogen, there's a regime or a regulatory regime which is encouraging people to invest in all aspects of the hydrogen economy so that those economies of scale can soon be realised.

Chris - What's really holding things up then? Is it just that technology isn't there? Is it that the infrastructure to use hydrogen in this way is not there? Is it that the market's not there and the Americans are getting behind it because they're already a bad offender on the carbon front, so they're doing something to offset that? What are the hurdles that you need to overcome?

Eugene - I think the Americans see the economy of the future and intend to win in it. I think the trickiest thing about this market is that we need everything to develop at the same time, both the production and the use. And so governments need to regulate to encourage those to happen. At the same time, subsidies are required at the start, otherwise people keep waiting for the next generation of technologies, which will be cheaper. So they need to be encouraged to buy the first generation so that the second generation will be cheaper. So get the regulation right and market forces will drive those costs down.


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