Around 350 projects under development could raise global electrolyser capacity to 54GW by 2030, according to the IEA’s Global Hydrogen Report.  

Global hydrogen supply from electrolysers could reach more than 8mn t/yr by 2030 if all those projects are completed.

Sixteen projects for producing hydrogen from fossil fuels with carbon capture, utilisation and storage are operational, with a hydrogen output of 0.7mn t/yr. Another 50 projects are under development and could add 9mn t/yr to hydrogen production by 2030, bringing combined green and blue production to 17mn t/yr by that date.

However, this is still well below the 80mn t/yr required by 2030 under the IEA’s pathway to net-zero CO₂ emissions by 2050, as set out in the agency’s Roadmap for the Global Energy Sector.

Reducing production costs will be a key factor in accelerating the rollout, according to the IEA. The report puts current costs for blue hydrogen at $1-2/kg and those for the green variety at $3-8/kg.

8mn t/yr – Expected 2030 green hydrogen output based on current projects

“There is significant scope for cutting production costs through technology innovation and increased deployment,” says the report.

Blue hydrogen costs remain broadly steady under the IEA’s 2050 net-zero emissions scenario, with green hydrogen costs falling to $1.3-3.5/kg, depending on renewable generation prices, leading to green hydrogen undercutting blue in regions such as the Middle East, North Africa and Australia.

More investment needed

Countries with hydrogen strategies have committed at least $37bn to the development and deployment of hydrogen technologies, and the private sector has announced additional investment of $300bn.

But putting the hydrogen sector on path consistent with global net-zero emissions by 2050 requires much more, with the IEA estimating $1.2tn of investment needed between now and 2030.

Several funds targeting hydrogen were launched in 2021 that will help enable these investments, the IEA says, including HydrogenOne Capital Growth, Ascent, FiveT, H-Mobility, Klima and Mirai.

But as well as public and private capital, the sector will need strong policy frameworks at both national and international levels to develop.

The report identifies five key policy recommendations that are also essential to enable cost reductions.

National hydrogen strategies with concrete targets for deploying low-carbon production and stimulating demand are vital to build stakeholder confidence.

Carbon pricing regimes in the form of a tax or an emissions trading system will incentivise the use of low-carbon hydrogen over grey hydrogen. Providing targeted support to selected projects as part of a cluster will help grow the market.

“We have experienced false starts before with hydrogen” Birol, IEA

Greater research funding and support for demonstration projects will make sure key technologies reach commercialisation as soon as possible. And certification, standardisation and regulation regimes will spawn new value chains.

“International agreement on methodology to calculate the carbon footprint of hydrogen production is particularly important to ensure that hydrogen production is truly low-carbon,” says the report.

“We have experienced false starts before with hydrogen,” says Fatih Birol, IEA executive director.

“Governments need to take rapid action to lower the barriers that are holding low-carbon hydrogen back from faster growth, which will be important if the world is to have a chance of reaching net-zero emissions by 2050.”

The report notes that around 60 international hydrogen trading projects have been announced between countries, with feasibility studies are under way for half of them. The total reported volume of these projects amounts to 2.7mn t/yr.

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Author: Tom Young