This could be aided by a shift in policy to focusing on “climate solutions” rather than debating “climate change,” suggests Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. “Governments are spending enormous amounts of money combating issues that climate change creates—floods, fires, destruction of arable land and the list goes on. If we could change that equation and take those dollars to reinvest in solutions, that absolutely changes the game.”
This may already be starting to happen. In some instances, governments are setting sustainability targets that focus on areas like decarbonization, the number of FCEVs needed to be produced or electrolyzer capacity. Indeed, the European Union recently made its European Hydrogen Strategy the centerpiece of its Green Deal—while Australia, Japan, China, the United Kingdom and Korea all have green hydrogen strategies and/or targets of their own.
For now, producing green hydrogen costs substantially more than the more common “gray” hydrogen, which is produced with natural gas—a financial reality that won’t change overnight. Yet established industries are finding ways to progress toward clean energy goals. Industrial gas companies, for example, don’t yet have the capacity to create green hydrogen but are creating joint ventures and partnerships that will do so.
This is where investors could join forces with businesses to make a difference—and not just in supporting hydrogen-based startups. Although not without risk, investors are increasingly choosing to support companies with a strong focus on sustainability, including reducing the impact of their operations on the environment. And as more companies and industries seek to adopt cleaner energy sources, such as green hydrogen and other renewables, the opportunity set should continue to expand. While hydrogen alone can’t solve the challenges of climate change, it could be a critical part of a greener and cleaner global energy system.
To learn more about green hydrogen and its potential to transform the clean energy revolution, read the Q&A: New Energy Behind Green Hydrogen and listen to our podcast The Promising Power of Green Hydrogen. Also, explore more commitments Bank of America is making to help realize a sustainable, equitable economy, from innovative funding that addresses critical social and environmental issues, to creating global standards to measure progress on carbon reduction.