(Brussels) – As of early 2021, over 30 countries have published hydrogen roadmaps and governments worldwide have pledged public funding to support decarbonization through hydrogen technologies. Almost 230 major projects were announced along the value chain, 85 percent of them in Europe, Asia and Australia. These include large-scale industrial projects, transport, infrastructure and giga-scale production projects. If all announced projects are realized, the total investment by 2030 will be more than 300 billion dollars (247 billion euros). Of this, $80 billion could currently be considered “mature”: the projects are in the planning phase, under construction or already in operation.
These are some of the findings of the new study “Hydrogen Insights 2021: A Perspective on Hydrogen Investment, Deployment and Cost Competitiveness.” It shows that hydrogen projects are developing very quickly around the world - a response to the commitments of many governments to deeply decarbonize their countries and industries. The analysis comes from market researchers McKinsey & Company and was prepared on behalf of the Hydrogen Council.
Competitive by 2030 in 20 industrial sectors
Hydrogen could become the most competitive low-carbon solution in more than 2030 industrial sectors by 20, including trucking, shipping and steel. To get there, two factors in particular are crucial: Firstly, it is important that governments maintain their commitment to deep decarbonization, supported by financial regulation and clear goals. On the other hand, the biggest structural obstacles would have to be removed in order to reduce the costs of producing and distributing hydrogen.
Buyers and suppliers are particularly attractive in three areas: industrial centers that support refineries, power generation, fertilizer and steel production, as well as export hubs in resource-rich countries and port areas for fuel bunkering, port logistics and transport. Cost reductions in these clusters have enabled global hydrogen trade by connecting major demand centers such as Japan, South Korea and the European Union with regions that have abundant low-cost hydrogen production resources, such as the Middle East, North Africa, South America or Australia.
Fully exploit potential through collaboration
Both governments and investors are now understanding the role hydrogen can play in the energy transition and in the fight against climate change, says Benoît Potier, co-chair of the Hydrogen Council and chairman of Air Liquide. “To fully realize this potential, governments, investors and industry must now work together to expand the hydrogen ecosystem around the world.” According to Daryl Wilson, Executive Director of the Hydrogen Council, members “collectively plan to increase total investment in hydrogen sixfold Hydrogen by 2025 and a 16-fold increase by 2030.” Collaborations would make it possible to implement many projects worldwide in the coming months and make hydrogen a new, clean, abundant and competitive energy source.
Bernd Heid, senior partner at McKinsey & Company, notices “interesting patterns” in “scaling up the hydrogen ecosystem.” Accordingly, in the short term, “around 40 percent of investments will flow into hydrogen production, and most projects are aimed at heavy-duty transport and industrial clusters such as ammonia, refineries and steel.”
In order to increase the dynamic, the Hydrogen Council, in collaboration with McKinsey, will in future offer a service called “Hydrogen Insights”, which will provide data and analyzes on investment dynamics, market development and competitiveness of hydrogen as a paid subscription. The study now presented is available to download free of charge.
The Hydrogen Council is a global, CEO-led initiative. The council brings together a group of now 109 companies based in over 20 countries from the entire hydrogen value chain, including multinational companies, innovative small and medium-sized businesses and investors.
Study
"Hydrogen Insights 2021: A Perspective on Hydrogen Investment, Deployment and Cost Competitiveness“ is available in English for free as a PDF (58 pages).
https://hydrogencouncil.com/wp-content/uploads/2021/02/Hydrogen-Insights-2021-Report.pdf
deep link
https://hydrogencouncil.com/en/hydrogen-deployment-accelerating-with-more-than-300-billion-in-project-pipeline/
Photos
Hydrogen-powered train iLint from Alstom / © Hydrogen Council / Alstom
