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02 Feb 2024

Hydrogen set for major role in transition

More than 70 countries have set ambitious net-zero emissions goals, according to the UN, and many have enacted regulations and initiatives to meet those targets. These pathways include the broader adoption of electric vehicles (EVs); utilising new low-or zero-carbon fuels (e.g., blue or green hydrogen) to decarbonise power, transport and heavy industry; increasing investments in renewable energy; upping the percentage of biofeedstock blending in transport fuels; incorporating the use of CCS or CCUS; and boosting the production of biofuels and alternative/renewable fuels.

Of these, hydrogen will undoubtedly play a major role in global decarbonisation since it is well-suited to provide clean energy to the transport, industry, power, buildings and processing sectors. Most analysts forecast a stark rise in hydrogen demand over the next 25 years, with several industry forecasts showing global production reaching 300–650mt/yr by 2050.

Professional services firm Deloitte’s Green hydrogen: Energizing the path to net-zero report forecasts global hydrogen demand reaching nearly 600mt by 2050, with most consumption coming from the transport sector (see Fig.1). Conversely, BP’s Energy Outlook 2023 forecasts global hydrogen demand reaching 300–460mt/yr within the same timeframe, based on its accelerated and net-zero scenarios.

With the stark rise in global demand, a significant amount of investment is needed in capital-intensive hydrogen production projects, electrolyser manufacturing, pipeline conversion and construction, and storage and refuelling infrastructure. The global clean hydrogen market could increase in size from $160b in 2022 to more than $640b in 2030 and upwards of $1.4t by 2050 (see Fig.2).

Hydrogen’s presence in the global shipping sector is also forecast to increase significantly. The International Maritime Organization is striving to reduce emissions from the marine industry by 20% by 2030 and at least 70% by 2040, with net zero targeted for 2050. This reduction can be aided by utilising low-emission marine fuels such as ammonia and methanol: more than 190 ammonia-powered ships have been ordered, and more than 40 methanol-powered ships were ordered in H1 2023, according to the shipping services firm Clarksons. These fuels can be produced via green hydrogen. If heavily adopted by the shipping industry, the International Renewable Energy Agency forecasts approximately 50mt/yr of green ammonia will need to be supplied to the marine sector by 2050. However, this is dependent on several factors, including price, regulations and industry adoption.

Active projects

Gulf Energy Information’s Global Energy Infrastructure (GEI) database has been tracking hydrogen projects globally for more than two years. Since the database’s inception in early 2021, the number of active hydrogen projects has increased to nearly 1,450 (see Fig.3)—a nearly 457% rise.

Most active projects are in Western Europe, followed by Asia and the US (see Fig.4). These three regions account for 81% of active hydrogen projects globally, with Western Europe accounting for nearly 50% alone. The projects represent a total capex of approximately $2t. More than 70% of projects are in the planning/proposed stage. The following is a breakdown of by status:

Planning/proposed: 73%.
Feasibility study: 15%.
FEED: 5%.
Under construction: 7%.

When broken down by production route, 76% are green hydrogen projects, followed by blue hydrogen pathways (see Fig.5).

Hundreds of billions of dollars will be invested by the end of the decade to significantly boost wind and solar generation capacity to fuel the massive amount of electrolyser capacity that will be put into operation. The electrolyser market has increased substantially over the past two years. Total installed electrolyser capacity eclipsed 1GW in 2022, with projects in the pipeline that could increase installed capacity to 134–240GW by 2030, according to the IEA.