Hydrogen's Role in Decarbonisation Faces Cost, Safety and Policy Hurdles

Hydrogen keeps coming up as a required piece of decarbonisation, but the engineers who spent a day on it in Manchester were not treating it as a done deal. More than a hundred academic and industry people attended IChemE's new Hydrogen Innovation and Technology Conference, where around 40 presentations covered investment, generation, transport, and the policy and standards needed to give hydrogen demand something solid to stand on. The mood was pragmatic. Hydrogen brings real value, and it also brings real costs.

Where hydrogen actually earns its place

The sharpest question at the conference was less about how to make hydrogen and more about where it should go. Domestic heating and chemical feedstock applications are being trialled in many places, and Scandinavia's NORHyWAY hydrogen valley has made visible progress. Even so, the strongest interest came from heavy industry.

Paul Henderson, who leads the UK government's strategic approach to hydrogen, put the sequencing plainly. "The overarching principle we are working with is electrification first as the most low-cost solution for decarbonisation, and for everything after that, specifically in heavy industry, hydrogen is part of the solution." In other words, hydrogen is being positioned for the hard-to-electrify end of the problem, not as a blanket replacement for everything else. He added that there is "no one-size-fits-all" answer, which is a fair reading of the technical picture.

Henderson also gave an update on the first Hydrogen Allocation Round, HAR1, where several projects have now reached final investment decisions. That's a concrete marker of progress, though the UK has yet to publish a dedicated hydrogen strategy to follow its 2021 report. Henderson said the government is working closely with industry to build policies and resources for hydrogen's implementation, and the room seemed to want that work to move faster.

Policy consistency is a cost in itself

Several speakers came back to the same point: projects stall when the rules are unclear. Ambiguity around regulation and funding can slow a project or kill it outright. The conference referenced SSE's decision earlier this year to pause several hydrogen projects, including the blue hydrogen H2NorthEast scheme in Teesside, citing policy delays and a lack of project support in the UK.

Emma Guthrie, CEO of the Hydrogen Energy Association, framed the wider issue neatly. "As we go through decarbonisation, we do need to consider the role of molecules like hydrogen, as well as electrons." She followed with a warning that matters for anyone planning multi-year work: "Though the ball is starting to roll again now, industry does struggle when the government is inconsistent." For an engineering team, that's a schedule risk as much as a political one.

Money, and the question of who carries the risk

Cost came up in every session. Hydrogen comes in several colours, from renewable-backed green hydrogen to natural-gas-based grey hydrogen, and each route carries its own funding requirements. New technology means investment in new equipment, plant modifications, pipelines and transport, and none of that is cheap or quick to commission.

Elizaveta Kovaleva of Oxera Consulting LLP looked at the investor side. Her framing was that investors need a balance of risk and return, and they need to know what cash flow they'll receive and what could affect it. She listed the exposures: volume risk, construction risk, regulatory and political risk, and operating risk. Her conclusion was that, at the current stage, the sector should focus on de-risking hydrogen if it wants private capital to commit. That reads less like a call to spend more and more like a call to make the project structures predictable.

Safety feeds directly into that risk picture. Hydrogen is a much smaller and lighter molecule than natural gas, so it's more prone to escaping from storage and pipework. Investors have to price that exposure, and engineers have to design around it.

Existing pipes, and a different route to hydrogen

On the engineering side, the most practical update came from Gemma Simpson, live trial operations manager for the LTS Futures project run by gas distributor SGN in Grangemouth. The project has produced what its team calls a "blueprint" for operators who want to use existing gas pipelines to transport and generate hydrogen. Rigorous pipeline and workforce testing, combined with training, showed that hydrogen could be moved safely through the network. The work also produced a set of parameters operators need to consider when modifying lines and choosing which pipelines suit hydrogen service. If you're looking at repurposing existing assets, that parameter set is the part to read closely.

Rob Crane, technology, scouting and venturing manager at ExxonMobil and director of the American Institute of Chemical Engineers, covered a different production route: methane pyrolysis. Here's the thing: for a company with decades of hydrocarbon expertise, pyrolysis looks competitive because it plays to existing strengths, and the solid carbon byproduct is a material the company knows how to process. ExxonMobil is running a pilot plant in Ludwigshafen, Germany, with BASF. According to the figures presented, that plant produces around 10 t/y of hydrogen and 30 t/y of carbon. The carbon-to-hydrogen ratio is the number that will decide whether the byproduct becomes a revenue stream or a disposal problem, and it's the one to watch as the scale-up plan progresses.

Why the chemical engineers in the room matter

Ollie Folayan, president of IChemE, argued that the hydrogen industry can't grow without chemical engineers. His reasoning was that the discipline rests on established principles and systems thinking, which suits a sector where the technologies are familiar but the applications are new. "With hydrogen, you are working with old technologies and applying them to new situations," he said.

Joan Cordiner, co-chair of the conference and IChemE president elect, set a tone that suited the day. "I want to foster good discussions on the reality of this resource... please ask questions, even if they seem stupid – those are the questions which push innovation."

The conference didn't settle the big debates, and it wasn't meant to. What it showed is that hydrogen's near-term future depends on three things engineers can influence directly: picking applications where hydrogen is the right tool, proving that existing infrastructure can carry it safely, and making projects bankable enough to get built. Watch the HAR1 projects that have reached final investment decision, and watch whether the UK publishes its promised strategy. Those two signals will say more about hydrogen's trajectory than any single technology announcement.