Problem: You may have already read my previous article regarding the promise of the budding hydrogen industry, but I’ve discovered even more amazing breakthroughs in the field, no pun intended, since then.
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Solution: A business based upon transitioning businesses with existing carbon-intensive technology to more clean forms of hydrogen. This not only capitalizes upon the growing number of countries pouring money in hydrogen in particular, but also the advantages provided by making a startup in such a small sector that’s projected to grow so much.
One of the most major developments since my first article is a staggering 7 billion dollar investment announced by the DOE on October 13th solely to develop hydrogen hubs, regions where hydrogen producers are concentrated. This, in combination with a tax credit for hydrogen production that could be worth even more as well as the original Earthshot breakthroughs funding, provides a wealth of investment in the hydrogen sector.
And it doesn’t just stop there. The hydrogen sector is just as popular in the EU; a little over a year ago they announced over 5 billion dollars in public funding for a similar hydrogen project as the US, promising to mandate a maximum distance of 60 miles between each refueling station. 0
Notice any similarities between the two? They’re both heavily focused on making hydrogen cars in particular a reality, despite the competition from the electric market. However, it doesn’t have to be one or the other. The truth is that electric cars have their own share of problems: they comparatively struggle in range, suffer from stagnant battery prices, and require expensive infrastructure in order to be viable. It’s not just governments that have recognized the potential of hydrogen cars in a world of carbon-neutral transportation: Toyota, Hyundai and BMW are all continuing to develop their respective hydrogen projects. In fact, BMW’s CEO boldly stated that “hydrogen will be the next trend.”
However, currently there’s a huge gap right in between where we need to be and where we are. 99% percent of all hydrogen produced today is “gray” hydrogen, which is produced using carbon-intensive steam-methane procedures. The transition of some key consumers of hydrogen, like the steelmaking and refining industry, will be necessarily revolutionary to reach the future hydrogen-optimists yearn for, though, recent technological breakthroughs seem ready to meet the challenge. There are three main ways to get there, any combination of which would serve to make the business more than worthwhile.
Although currently experimental technologies, massive efficiency gains have been seen in both splitting the sea and using solar energy to generate clean hydrogen. The former is important because electrolysis, the form of green hydrogen technology mentioned in my last article, is entirely reliant upon freshwater. That wouldn’t be a problem, except for the fact that it’s estimated to require the same amount of water as a medium-sized country to replace key hydrogen industries today. The latter provides another manner that advancements in other industries may play a role in hydrogen developments. However, both of these pale in comparison to the potential of geologic hydrogen, a form of hydrogen extremely common underground that can be extracted using processes nearly identical to oil. It’s estimated that these pockets contain trillions of tons of hydrogen, which by itself could power the U.S. for the next few centuries.
Although these are still extremely new and niche discoveries, the sector’s growth will rely upon these exact methods much sooner than you may think, according to the International Energy Agency.
"Novel applications in heavy industry and long-distance transport account for less than 0.1% of hydrogen demand, whereas they account for one-third of global hydrogen demand by 2030 in the Net Zero Emissions by 2050 (NZE) Scenario."
Overall, whether it’s ultimately through innovation research and development or a focus on technology production, the hydrogen field presents a variety of lucrative pathways for the business to go down. The key goal is to get started as possible and to establish yourself in the market before the market expands, not only in costumer base, but in competition.
Monetization: Business to business sales, primarily to the refining, chemicals, steelmaking, and transportation industry.
Contributed by: David Salinas (Billion-Dollar Startup Ideas)