Half of all clean hydrogen produced globally could be transported long-distance by 2030, says Hydrogen Council
Gloomy report downgrades H2 demand based on new reference case in which global temperatures rise by 1.9°C in 2050
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The new “Further Acceleration” (FA) reference case for its modelling works on the assumption that net-zero targets are missed, resulting in subdued demand for clean hydrogen and a global temperature rise of 1.9°C by 2050.
The report also envisages 375 million tonnes of clean hydrogen demand by mid-century, down from the 660 million tonnes it expected last year.
The FA reference case was developed by McKinsey following interviews with 152 international energy experts and executives as part of the consultancy’s Global Energy Perspective initiative, which indicated that the world was on a trajectory to miss the net-zero targets envisaged by the Hydrogen Council in its previous reports.
The association has not abandoned its net-zero reference case for use across its other work, “as it underscores the critical role hydrogen has to play for the world to decarbonise by 2050”, it said.
“However, the dampened outlook reflects a reality that cannot be ignored — despite positive trends, both producers and would-be users of hydrogen continue to face challenges, from increasing costs to technological uncertainties to a lack of coherent and stable regulation, including a global price on carbon, that impact the pace and buildout of the hydrogen economy.
“This serves as a stark reminder that, for hydrogen to achieve its full potential, there is a need to step up efforts that address challenges and unlock investments.”
The 20 million tonnes of clean hydrogen it expects to be transported long-distance will mostly be moved by pipeline or as shipments of clean hydrogen-derived ammonia, some of which will replace existing shipments of polluting grey ammonia.
The report assumes that green hydrogen costs will fall as low as $0.25/kg in the cheapest locations, largely due to subsidies such as the Inflation Reduction Act in the US, with production in parts of Japan costing more than $6/kg.
However, it expects that by 2050, the global cost curve will have flattened to a 2.5 times’ cost differential as incentives expire and renewable costs reduce.