Hydrogen has a key role to play in the decarbonisation of energy-intensive industries, according to an assessment report released in December by the Hydrogen Council and consultancy McKinsey & Company. It enables the efficient transfer of energy to resource-constrained areas and supports the creation of a clean and resilient energy system.

The hydrogen introduction process is at a tipping point. On the one hand, positive factors such as a growing and gradually developing project pipeline and supportive regulatory measures for decarbonisation are prevailing. On the other hand, challenges are emerging in the form of cost increases, delays in project implementation, regulatory uncertainty and higher financial costs.

Europe at the forefront
Europe maintains its leading position in the overall project pipeline with more than USD 190 billion in announced investments. However, only 7% of announced investments in renewable hydrogen production have passed final investment decision (FID). In Europe, these figures are 4% (USD 8 billion), in North America 15% (USD 10 billion) and in China 35% (USD 12 billion).

Globally, hydrogen projects represent an annual renewable hydrogen production capacity of 45 megatons by 2030, with more than 3 megatons per year having already passed final investment decision at the end of October 2023.

Accelerating project development is essential
"The latest data suggests that renewable hydrogen is moving steadily forward, but collaboration is key to achieving our goals. Ambitious joint action by the private and public sectors will be necessary to realize the more than 1,400 globally announced renewable hydrogen projects and the associated annual supply of 45 million tonnes by 2030, said Yoshinori Kanehana, Chairman of Kawasaki Heavy Industries Ltd. and Vice Chairman of the Hydrogen Council.

As the authors of the report mention, despite the still significant growth, it is necessary to increase the number of announced projects and accelerate the development of existing ones. An additional USD 430 billion must be secured for hydrogen projects in order for the world to reach the decarbonisation pathway on time.

The full report is available here - https://hydrogencouncil.com/wp-content/uploads/2023/12/Hydrogen-Insights-Dec-2023-Update.pdf

Source: Hydrogen Council

Photo source: H2iq.org