Hydrogen to the Rescue?
This week, we talk about how more companies and governments want to use hydrogen to go greener.
Welcome to our weekly chat about the environmental and social issues that influence the way we work, spend our money and live our lives. We're your hosts, Maitane Sardon and Dieter Holger. Want to get our newsletter every Wednesday? Hit the subscribe button in the upper right corner and please share with your friends!
Hi Maitane! Hydrogen is back in the headlines lately. But the universe’s most abundant element isn’t just for the cars and buses. Utility companies in the U.S. are investing in the fuel to power homes and businesses.
That’s right. NextEra Energy and Dominion Energy are two companies betting on hydrogen. Hydrogen is a fuel that doesn’t release carbon-dioxide or other greenhouse gases into the atmosphere when burned with oxygen. Still, most hydrogen these days is made with fossil fuels and only about 1% is so-called green hydrogen from renewables. This is because making fossil-based hydrogen is cheaper and is already available at industrial scale. Today, the most common way to make hydrogen is at plants that mix natural gas and steam. While green hydrogen is made using wind and solar power to separate hydrogen from water with machines called electrolyzers.
We are also seeing keen interest from local governments. The Los Angeles Department of Water and Power is investing $1.9 billion to convert a coal plant in Utah to run on natural gas and hydrogen made from wind and solar power. The plant in Utah is one of Southern California’s biggest power sources. It would run on 30% hydrogen in 2025 and eventually only on the fuel within the next two decades.
Problem is the price of green hydrogen isn’t yet competitive and it will take more money from both companies and governments to get it to hold up in the market. Prices are on the way down though in the next few years as solar and wind power get cheaper. The European Union has proposed to spend hundreds of billions on green energy as part of the EU’s recovery plan and Green Deal, including to increase hydrogen production sixfold by 2024.
Renewable energy that could generate hydrogen fuel is also expected to grow even more in Asia despite some Chinese subsidies drying up. We will see in the next few years if hydrogen has what it takes to deliver the climate change ambitions of governments.
Anything else you’re watching in the green space, Maitane?
There are more investors making tools to calculate the risks and earnings from different environmental or social issues. Schroders, a London-based fund manager, has made a tool called SustainEx that shows social or environmental impacts in economic terms.
It’s not just investors doing this. Yogurt maker Danone started this year to report earnings per share adjusted for its carbon footprint. Puma has been publishing a survey of what its products cost the environment since 2011. Puma’s former parent Kering, the owner of Gucci, publishes an “environmental profit and loss account” that assigns a money value to the company’s environmental impact.
I’ve seen that. Kering has even made an app that tells you the environmental impact of certain luxury items and shows which materials a bag should be made of and where it should be manufactured in order to have a lower carbon footprint. I was playing with the app and apparently the best option when making a wool jacket is to source the wool from Italy and the lining cotton from Turkey. It’s less harmful for the environment if Kering manufactures it in Europe instead of in Asia.
What am I looking at? This is a screenshot of an app developed by Gucci’s owner Kering that shows the environmental impact of a wool jacket.
Anything else, Dieter?
Did you read that article about the mystery seeds from China some people received in the mail this summer? When it happened, federal and state officials advised people not to plant the seeds as they could harm the local biodiversity. Now e-commerce companies including Amazon have decided to restrict the sale of seeds. But experts in e-commerce scams say these actions won’t solve the core issue of the problem: that these unsolicited seed orders may be part of a brushing scheme.
I’ve heard about that technique! Vendors turn to “brushers” so they place fake orders for their products. This increases sales volumes and boosts the vendor’s standing on online marketplaces. It will be interesting to see if these measures stop brushing. In the meantime, if you receive a package with seeds that you haven’t ordered, don’t open it and take it to agriculture officials so they can analyze it. Now let’s open it up to our readers: Do you think hydrogen is a good way to fight climate change or should governments and companies keep most of their focus on renewables?
Share your thoughts below, email us or catch us on Twitter. Your words could appear in our next edition! Have a great week and remember to wash your hands. 👋
Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music, skateboarding and yoga (but I’m bad at both). dieter.holger@wsj.com@dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com@sardomaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com@CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com@violian.tammy