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Is green hydrogen the biggest opportunity for climate tech funding?

Sponsored: Dr. Maria Anez-Lingerfelt, senior scientist at Pall Corporation looks at how finance and tech must align to make further progress for sustainable energy.


Solar panels on a farm. Image courtesy of Pall Corporation.

This article is sponsored by Pall Corporation

Climate tech is a hot topic among venture capitalists, with investment deals reaching $19 billion in the first half of 2022, according to database Climate Tech VC. Although funding decreased compared to the first half of 2021, due to a downturn in late-stage deals, the number of deals overall increased with a greater backing of early-stage companies.

The market is also diversifying, with more investment in technologies to tackle environmental issues across different industries including manufacturing and the built environment, adding to climate tech funding in the more established sectors of transport, energy and food and land use.

Yet if we are to limit global warming to 1.5 degrees Celsius as scientists advocate, does more need to be done on the financial front? Analysts at high-tech bank Silicon Valley Bank have calculated that under current climate policies the world will be emitting 55 gigatons of carbon dioxide by 2030 and that this figure will need to be reduced to 25 gigatons in order for the temperature threshold not to be surpassed. They have forecast a need for around $5.6 trillion a year in investments overall to make these targets achievable — $2.1 trillion per year more than previously expected.


Wind turbine field during sunrise. Image courtesy of Pall Corporation.

We have seen the costs of wind and solar power come down over the past decade as funding for innovative technologies has scaled up production. Now more emphasis needs to be placed on developing a broader span of tech solutions to yield sustainable practices on a wider scale.

Green hydrogen is crucial to the energy transition

Green hydrogen is a key focus in the battle to stop climate change. It is vital to form part of international energy transition strategies, as it is a fuel source that does not produce emissions. Formed from the electrolysis of water powered by renewable energy sources, green hydrogen is the cleanest of all hydrogen color types. By comparison, gray and brown hydrogen are produced from fossil fuels and emit carbon dioxide, which needs to be captured and stored to reduce its polluting effects on the environment. If a carbon capture step is added, then it will be termed blue hydrogen.


Hydrogen Production Process. Image courtesy of Pall Corporation.

For green hydrogen the electrolysis process involves the dissociation of the water molecule in an electric field, generated typically by wind or solar power. Hydrogen is then produced at the cathode, and oxygen at the anode, with an electrolyte present in between the electrodes.

Three types of electrolyzers can be used — alkaline (AEL), polymer electrolyte membrane (PEM) and solid oxide electrolyzers (SOEC). AEL is the most widely used in industrial applications, but drawbacks include lower purity levels and lower energy efficiency. Use of PEM is increasing because it has fewer drawbacks, but it is expensive compared to AEL. SOEC is a technology with great potential, but is still in the early stages of commercialization.


Typical Separation applications in Hydrogen Production using AEL. Image courtesy of Pall Corporation.

Whichever electrolysis technology is used, the hydrogen stream needs to be further processed to remove solid, liquid and gaseous contaminants. In this process the real technical challenge lies because the regulations around gas purity are extremely stringent. Typically, concentrations between 2,000 to 6,000 ppm (parts per million) of oxygen and more than 2,000 ppm of water are seen contaminating the hydrogen produced using commercial alkaline electrolysis. The maximum concentration allowed for fuel cell vehicles is 5 ppm of each under the ISO standard for hydrogen fuel quality.

Purity is created via filtration

This gap between outputs and purity standards is why predominant AEL systems require further optimization to produce green hydrogen at a large scale. Several unit operations using filtration, separation and purification technology are needed to achieve the required purity levels.


Green Hydrogen Graphic. Image courtesy of Pall Corporation. 

After hydrolysis, the liquid-and-gas mixture needs to be cooled, separated and compressed; this can be done with gravity separators, mist eliminators pads, filter vane separators and liquid/gas coalescers. The hydrogen is then fed into a catalytic reactor to remove any contaminating oxygen.

Solid contaminants originating from oxidation in pipes and equipment must be eliminated. Adsorbent fines — material that attracts and holds liquid, gas or solute — are situated in the final drying equipment and may also get released, contaminating the gas. To remove these contaminants, disposable gas filters in different micron ratings can be deployed throughout the process.

The final step is the efficient storage of the hydrogen once it is produced. It can be compressed and stored in tanks, pumped into salt caverns or converted into liquid ammonia using the Haber-Bosch Process. Throughout each of these processes the gas can become contaminated with liquids, solids, or gases (if transported in natural gas pipelines). The contaminants will need to be removed to meet the end use specifications.

Investment to make continuous improvement

In order to make green hydrogen commercially viable at scale, there will need to be more power available from solar and wind farms along with enough large electrolyzers to carry out the chemical process. Investment in new electrolyzer facilities is underway by many traditional oil and gas suppliers that are diversifying their output, as well as by environmental technology companies.


Renewable energy factory near the water during dusk. Image courtesy of Pall Corporation. 

Silicon Valley Bank expects that by the time it issues its next annual report on climate tech in 2023, many venture capitalists will have stayed with companies they have already backed and continue with mid-to-late-stage funding where the return on investment might be reduced. They may, of course, also keep investing in emerging enterprises where the risks and potential rewards are greater.

It is this financial commitment the world needs — along with legislation and practical measures by industry and consumers — that will help drive progress on climate change. The scaling up of green hydrogen production is key to making energy supply sustainable for the future. Funding the development of technology is both necessary and an opportunity for financiers to see a ROI. The ultimate beneficiaries should be our planet and communities.

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