Hydrogen, first documented back in 1766, is the simplest, lightest and most abundant chemical element in our universe, the first element in the periodic table, and yet it made it possible for humans to explore space. For right and wrong reasons, hydrogen has also often been cited as the number one solution to decarbonization.
At the peak of its hope and hype in 2020-21, hydrogen was making the headlines and was seen as the number one solution to decarbonization. Three years later, it is time for a reality check. What’s a reasonable scenario and where are the opportunities?
While the International Energy Agency estimates that hydrogen would only mitigate 6% of the cumulative emissions reductions needed under its net zero scenario, we believe its role will be key for the so-called hard-to-abate industries (steel, chemicals, heavy-duty transportation and shipping) as these have few alternative options to decarbonize.
Near-term, hydrogen’s outlook looks bright on the industrial demand side, with 94 million tons in 2021[1].
Longer-term, demand scenarios vary but in any case estimates imply a demand between 5 and 7 times higher than that in 2021[2]. Besides, policymakers are not shy in their ambitions to support hydrogen growth. Clean hydrogen subsidies have more than quadrupled over the past two years[3], which we believe should unlock actual funding and accelerate investment decisions on the ground.
Read more on the hydrogen opportunities in our white paper
[1] International Energy Agency, Global Hydrogen Review (September 2022)
[2] Candriam, IEA, Hydrogen Council, bp, Deloitte, 2023
[3] BloombergNEF, August 2023
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”We believe hydrogen’s role will be key for the so-called hard-to-abate industries, which have few alternative solutions to decarbonize.
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