Hydrogen risks being the great missed opportunity of the energy transition

From the White House to European meeting rooms, hydrogen is increasingly seen as an essential part of the energy transition. In June alone: ​​President Joe Biden invoked wartime legislation to direct money to building electrolysers. Egyptian and Saudi leaders have agreed to invest billions in hydrogen infrastructure. RWE and ArcelorMittal have signed a memorandum of understanding to develop, build and operate renewable energy to decarbonize steel production. Volvo introduced its new hydrogen fuel cell truck with a range of 1000 kilometres. To only cite a few.

Hydrogen is needed to decarbonize industries that cannot be easily electrified, such as deep-sea shipping, aviation, and high-temperature industrial processes. However, our recent forecasts The future of hydrogen until 2050 finds that the absorption of hydrogen will be much too slow. To meet the Paris Agreement targets, by 2050 hydrogen would need to meet around 15% of energy demand, but our results show it will only reach 0.5% by 2030 and 5% by mid-century.

The future of hydrogen until 2050 examines the hydrogen industry in detail, but here I will highlight some of the key findings.

Trillions of dollars of investments

Even though hydrogen production is expected to be lower than it should be, huge investment opportunities exist. Global spending on hydrogen production for energy purposes by 2050 will be $6.8 billion, with an additional $180 billion spent on hydrogen pipelines and $530 billion for the construction and operation of ammonia terminals.

Green hydrogen dominates

Electricity-based green hydrogen – produced by separating hydrogen from water using electrolyzers – will be the dominant form of production by mid-century, accounting for 72% of production. Blue hydrogen and blue hydrogen products such as ammonia – produced from natural gas whose emissions are captured – also have an important role to play, but its competitiveness will gradually decline as the capacity of renewable energies renewables will increase and prices will fall.

Pipelines essential for the distribution of hydrogen

Hydrogen will be transported by pipelines over medium distances within and between countries, but almost never between continents. Ammonia – a derivative of hydrogen – is safer and more convenient to transport and is more suitable for long distance maritime trade. Therefore, we predict that 59% of energy-related ammonia will be exchanged between regions by 2050.

Gas pipelines to be converted

Cost considerations will lead to the repurposing of more than 50% of hydrogen pipelines worldwide from natural gas pipelines, reaching up to 80% in some regions, as the cost of repurposing pipelines is not expected to represent only 10 to 35% of construction costs. .

For airplanes and ships but not passenger vehicles

Hydrogen derivatives like ammonia, methanol, and e-kerosene will play a key role in decarbonizing heavy transportation sectors (aviation, marine, and trucking parts), but their adoption will only come at the end of the 2030s. We do not expect hydrogen uptake in passenger vehicles, and only limited uptake in power generation. Hydrogen for building heating, typically blended with natural gas, has early adoption in some regions, but will not expand globally.