Hydrogen Ladder | Seven H2 applications relegated in updated use-case analysis, but three promoted
Creator Michael Liebreich says first update in two years shows how his views on hydrogen have hardened
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Created by investor and hydrogen analyst Michael Liebreich, the ladder (see image below) ranks likely areas in which hydrogen will be used globally by around 2035, based on a variety of criteria including efficiency, cost, safety and co-benefits, as well as whether there are cheaper or better alternatives available.
Rungs on the ladder are rated from A, in which there is no alternative to hydrogen, to G, the so-called “row of doom”.
“What has become clear is that anything that currently uses jet fuel is going to continue to do so, hence the newly combined use case Jet Aviation,” said Liebreich in a LinkedIn essay on the new Ladder, the first since Hydrogen Ladder 4.1 was published in August 2021.
Jet aviation is now at rung B on the Ladder, indicating there is likely to be a “decent” market share for hydrogen. This is higher than the highest-ranked aviation application in the previous iteration of the chart.
But bio-pathways remain both cheaper and more efficient than hydrogen-derived pathways, he noted.
Hydrogen Ladder 5.0 also promoted two categories located further down the ladder — regional trucks and short-term grid balancing services — which are both piggybacking off the potential of use cases higher up, Liebreich said. For example, if hydrogen garners some market share in long-distance trucking, it might incentivise some take-up for regional trucking.
The investor and analyst also demoted remote trains and local ferries describing the applications as an “edge case” that makes little economic sense.
Uninterruptable power supplies (UPS) and bulk power imports, currently being attempted by Japan, were also moved down the ladder.
In fact only five use cases (fertiliser, hydrogenation, methanol and hydrocracking and desulphurisation) are now listed on the top rung of no “alternative” — and even methanol can be made with biomass/biogas feedstocks.
And some of these might not serve as long-term use cases for hydrogen. Desulphurisation, for example, will be less necessary as fossil fuels are phased out.
“The balance between three promotions and [seven] demotions is probably a pretty good indicator of how my views of hydrogen have hardened over the last two years,” he said.
“The key messages of the Ladder remain unchanged: there are better and worse use cases for hydrogen; in the majority of cases there are cheaper, safer and more convenient zero-carbon alternatives; synergy between use cases… will not be enough to float all hydrogen boats; and since we should expect clean hydrogen supply to be limited for many decades, we should focus our efforts and public money on use cases on the top rows of the Ladder.”
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