Published on November 8, 2021
With the 26th annual UN Conference on Climate Change (COP26) well underway, all eyes are on Glasgow to see if world leaders can honour their commitments under the Paris Agreement to limit global warming to 1.5 degrees. Keeping within 1.5 degrees will require massive greenhouse gas (GHG) emissions reductions across all sectors, especially the energy sector, which accounts for over 70% of global GHG emissions. These include emissions from energy use in the steel industry (7.2%), chemical industry (3.6%), aviation (1.9%), and shipping (1.7%). Direct emissions from the chemical industry (e.g. as by-products from ammonia production) also account for 2.2% of global GHG emissions. Here, Power-to-X solutions can play a key role in defossilising emissions since these sectors cannot be directly electrified with renewable energy (also known as hard-to-abate sectors).
In line with the Paris Agreement’s five-year review process, 114 countries have submitted updated Nationally Determined Contributions (NDCs) towards the global emission reduction effort, and 9 have included Power-to-X solutions. These are Argentina, Bhutan, Canada, Chile, Costa Rica, Namibia, Paraguay, the UAE, and the USA. Seven other countries also refer to hydrogen in their NDCs, but since the production is not explicitly based on renewable energy, it cannot be considered a Power-to-X solution. Lastly, three countries (Fiji, India, and Sri Lanka) included green hydrogen in their first NDCs but removed them from their recently submitted updates.
Here we take a look at just of a few of those NDCs that include Power-to-X to help achieve national and global climate targets.
Chile’s NDC targets a 30% reduction in greenhouse gas emissions by 2030 and carbon neutrality by 2050. To achieve their carbon neutrality scenario, Chile considers several potential GHG emission mitigation measures, including the use of green hydrogen in hard-to-abate sectors. More specifically, implementing green hydrogen in:
- 71% of cargo transportation (by 2050)
- 12% of industry and mining (by 2050)
The NDC also proposes the use of green hydrogen heating in industry and housing (2% and 7% respectively), although direct electrification with renewable energy is prioritized for both (25% and 70%, respectively).
Importantly, the NDC highlights the link between green hydrogen and renewable energy sources and proposes replacing 5,500MW of fossil-fuel based electricity generation with renewable energies. Increasing renewable energy capacity is the key for scaling up the production of all Power-to-X solutions, not just green hydrogen. For example, green ammonia, green methanol, or other Power-to-Liquid drop-in fuels can play an important role in defossilising Chile’s shipping sector but first require increases in renewable energy capacity up to 270 GWh/day. In the end, both ambitious renewable energy targets and the strategic implementation of Power-to-X products in Chile’s hard-to-abate sectors will play an important role in their road to carbon neutrality by 2050.
Argentina also emphasises the importance of sector coupling between renewable energy providers, mobility, and industry in their NDC. The NDC also outlines Argentina’s ambitions to develop hydrogen value chains for achieving low-carbon industry and transport. Moreover, the NDC highlights that Argentina’s high potential for renewable energy generation significantly increases their hydrogen production potential and calls for significant increases in renewables in the electricity mix by 2030.
Namibia’s NDC also includes targets to decarbonise transportation, largely by substituting diesel with green hydrogen. Fuel switching is planned to deliver 42% of emissions reductions in the transport sector, followed by reducing fuel use (30%), promoting fuel efficiency (27%), and replacing conventional gasoline vehicles with electric vehicles (0.3%).
Source: Namibia’s NDC Update
To support this target, a feasibility study is investigating Namibia’s potential for producing green hydrogen, as well as other Power-to-X solutions such as green ammonia and green methanol. Lastly, the NDC also proposes the potential for green hydrogen fuel cells to provide electricity in remote areas which lack access to electricity. Pilot projects using stationary hydrogen fuel cell systems to provide electricity for residential and tourist consumers are already underway as part of these efforts.
Future ambitions and recommendations
Countries are catching on to the potential for Power-to-X solutions to help them achieve their climate targets. However, significant unrealised potential remains. First, more countries can incorporate PtX solutions in their NDCs and other long-term climate strategies. Tools such as the PtX Atlas can help countries analyse their PtX potential based on renewable energy capacity, water sources, and socio-economic factors.
Second, understanding Power-to-X as the concept of using renewable energy to defossilise hard-to-abate sectors (rather than as a product) can help ensure that:
1. Countries take advantage of the full range of PtX solutions to reach their climate targets.
Hydrogen is heavily overrepresented in the PtX solutions included in current NDCs, and considering all the potential end-products of PtX can help unlock even greater emission reductions. For example, producing green ammonia through PtX can eliminate GHG emissions from fertilizer production, which account for 1.2% of all anthropogenic GHG emissions. Bhutan is the only country that mentions PtX solutions other than hydrogen in their NDC, including “hydrogen fuel, green ammonia, and other emerging technologies” in their plans to enhance climate resilience.
2. PtX solutions are focused only on those applications that cannot be directly electrified with renewable energy.
Determining specific end-uses can help avoid inefficient applications of PtX solutions, such as in passenger vehicles. For example, Chile outlines in their NDC that green hydrogen would be used for cargo transport specifically, which mainly consists of shipping and long-distance road transport. Other hard-to-abate sectors which would benefit from PtX solutions include aviation, the steel industry, and chemical industry.
3. Plans to implement PtX solutions are always accompanied by renewable energy expansion
Chile and Argentina have made the link between green hydrogen and renewable energy production in their NDCs, however, all countries considering PtX solutions should ensure that NDCs include dedicated additional renewable energy capacities. An assessment by IRENA suggests that generally, all NDCs would benefit from more ambitious renewable energy targets with up to 3.2 terawatts (TW) of cost-effective renewable energy potential missing from NDCs.
All in all, although some countries have included PtX solutions in their NDCs are recognised their potential for reaching the Paris climate goals, there is certainly room for growth. We hope that in the future, more countries recognise this potential and incorporate the full scope of PtX solutions into their climate policy.