The hydrogen market risks a “massive” drop in prices and long-term supply chain disruptions unless immediate action is taken to create demand at industrial and retail levels, UK-based trade association the Energy Industries Council (EIC) warns.

The UK has a hydrogen supply-side pipeline of more than 50 projects potentially worth over $13bn, but more progress is needed on the demand side both domestically and globally, the EIC says.

“The industry needs supply-demand equilibrium to thrive and contribute to national and global environmental commitments,” EIC CEO Stuart Broadley says. “Our research and industry conversations show that the global supply of hydrogen could exceed demand. If this trend continues, there is a risk that producers will have no buyers, risking a massive drop in [hydrogen] prices and long-term disruptions to the supply chain.”

$13bn – Potential value of UK hydrogen project pipeline

Broadley urges the energy industry to create demand by providing hydrogen refuelling stations across the UK.

The EIC also calls on the UK government to decide which projects will receive funding under the second track of its industrial CCS clusters programme, enabling the development of blue hydrogen production. These decisions are needed to help the UK meet its target of 10GW of hydrogen production capacity by 2030, says Rebecca Groundwater, EIC’s head of external affairs.

“To encourage businesses and investors to invest in hydrogen projects, we need a clear plan with deadlines,” she says. “We also need to classify hydrogen internal combustion [engines] as a zero-emission powertrain—as the EU and other regions are doing—and support for hydrogen refuelling stations infrastructure to drive private investment.”

---

Author: Stuart Penson