Russia’s invasion of Ukraine has added momentum to the global low‐emission hydrogen sector, according to the IEA’s World Energy Outlook.

Capital spending in 2021 on hydrogen electrolyser projects starting operation or under construction was c.$1.5bn, more than three times as much as in 2020, the report says.

And investors allocated $700mn in early-stage venture capital to startups developing hydrogen technologies in 2021, nearly five times the amount invested in 2020.

The 33 pure-play hydrogen companies tracked by the IEA have increased their capitalisation by around $20bn since mid‐2020.

$20bn – Increase in capitalisation of 33 pure-play hydrogen firms tracked by IEA

“This increase was driven by investor confidence in startups that offer project development services, which reinforces the perception that projects will soon be built, and in innovative technologies for hydrogen end‐uses as well as for potential non‐electrolysis routes to low‐emission hydrogen production, such as methane pyrolysis,” says the IEA report.

Looking ahead

The report includes various different scenarios for how the world’s energy system might look in years to come. Under the announced pledges scenario (Aps), which is based on nations’ long-term net-zero targets, global low‐carbon hydrogen production reaches 30mn t/yr in 2030, requiring a cumulative investment of $170bn in blue and green hydrogen projects.

Current planned hydrogen production falls well short of this target. If all projects under development were successful at raising funds and meeting their schedules, there would be enough global capacity to produce 12mn t/yr of hydrogen by 2030.

“Much of this proposed capacity would be in Chile, Argentina and Brazil, but there would also be significant amounts in Australia, Denmark, Mauritania and the US,” says the report.

Carry on up the pipeline

Ammonia emerges as the most common form for the export and import of hydrogen by sea in 2030 under the Aps scenario. Ammonia represents more than 85pc of planned capacity for those projects that have expressed an intended carrier fuel to date.

“While Europe has existing infrastructure which makes it possible to import several million tonnes of ammonia each year for chemical use, significant additional capacity is needed if meaningful amounts of low‐emission hydrogen are to be exported to Europe as ammonia,” says the report.

Liquefied hydrogen and liquid organic hydrogen carriers are not expected to take a high share during this decade.

In addition to standards and demand creation, a range of other measures will be needed to stimulate investment, including safety regulations, infrastructure funds, permitting processes and risk management tools such as concessional debt and insurance, the IEA says.

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Author: Tom Young