Hydrogen Economy is Chemistry – Let’s Build a Sustainable Future Together
For the chemical industry, the hydrogen economy has been a part of everyday life for around 100 years. Currently, the industry is Finland’s largest hydrogen producer and user: it produces 90 percent of the hydrogen used in Finland and consumes 80 percent of it. Hydrogen production is a textbook example of a chemical industry process. For us, the hydrogen economy is not a distant future but a crucial part of both current and future solutions. In recent years, the development of the hydrogen economy has gained wider attention due to its central role in achieving carbon neutrality. This is also true for the chemical industry. Hydrogen is at the heart of the industry’s transition toward more sustainable business models and products. Nationally, the development of the hydrogen economy is seen as having enormous potential. According to the hydrogen economy strategy published by the Hydrogen Cluster, a fully realized hydrogen economy could create up to 240,000 jobs and generate €69 billion in added value for Finland.
Hydrogen also plays a significant role in our industry’s updated carbon neutrality roadmap. This update continues from the goal set by the Board of the Chemical Industry Federation of Finland in 2019: to make the industry carbon neutral by 2045. Along the way, this goal has evolved into “nature-positive carbon-neutral chemistry,” one of the focus areas of the industry’s self-initiated sustainability program. Inspired by this ambition, companies have set their own targets and pathways toward a carbon-neutral future. To date, 65 percent of the companies participating in our voluntary sustainability program, Responsible Care, have set climate goals.
The role of hydrogen in this overall picture is multifaceted. It is a key raw material in many of our processes, it is produced as a byproduct of our operations, and it is also a genuine product for sale. Additionally, hydrogen-based energy solutions contribute to eliminating emissions from the industry’s energy consumption. Perhaps in a somewhat newer development, hydrogen’s role is becoming increasingly important in the production of new raw materials for our processes. Capturing carbon dioxide and utilizing it with the hydrogen economy represents a key alternative to virgin fossil raw materials and a significant step toward a more sustainable future for the chemical industry. Other alternative sources of carbon include sustainable bio-based materials and various circular economy-based raw materials. From these sources and hydrogen, we can produce various synthetic hydrocarbons and chemical intermediates. This also enables carbon to be captured in products rather than heating the atmosphere. Since the chemical industry produces intermediates for other sectors and end products for global markets, our industry can also support other companies, sectors, and countries in achieving their carbon neutrality goals. In this way, we create a significant positive impact potential for many other sectors, both in Finland and internationally. The chemical industry is paving the way toward a more sustainable future.
The potential is immense, but realizing it requires concrete actions. The needs for investments in the hydrogen economy and industrial sectors more broadly are substantial, which means there will be a significant need for funding and incentives to make these investments cost-competitive compared to traditional, highly efficient solutions. Furthermore, producing synthetic raw materials requires a large amount of affordable and reliable electricity. Fortunately, Finland has had a relatively favorable electricity situation compared to many other countries. The plans developed for advancing the hydrogen economy also support this development, but they now need to be implemented.
The situation becomes more complex when it comes to legislation. Currently, alternative raw material sources, such as carbon dioxide captured for reuse, face significant regulatory challenges. In some cases, regulations do not even properly recognize new raw materials. In the worst cases, captured carbon dioxide is not considered an emission reduction, and companies may even have to pay emission fees despite achieving carbon neutrality. This needs to change as soon as possible. Another major issue is the lack of incentives for new products. Currently, there are hardly any incentives for products based on new raw materials. Without long-term incentives, new markets may remain just a dream. A prime example of short-term thinking in existing incentives is the political manipulation of the fuel distribution obligation, which has a significant impact on the market, predictability, and investment interest for new products. The reforms to incentives and legislation must also be broad enough to cover various regulatory areas. For example, waste and product legislation should also encourage the use of alternative raw materials.
The advocacy work of the Chemical Industry Federation of Finland has long been focused on enabling investments, addressing regulatory challenges related to the hydrogen economy and hydrogen-based products, and promoting incentives for bringing new products to market. Issues related to working conditions and expertise in the hydrogen economy are also part of our work. We continue this effort alongside our member companies, and anyone interested in joining our journey is welcome, whether you are already a member or considering becoming one.
