Green hydrogen - statistics & facts
The world has spent close to 600 billion U.S. dollars in direct investments on hydrogen projects. In a bid to reduce the world’s carbon footprint, industry and government leaders are turning their eyes to this previously under-utilized energy carrier. Particularly the kind derived through renewable-fueled electrolysis and commonly referred to as green hydrogen has drawn major investments. However, since first garnering interest in the early 2020s, the hype has slowly fizzled, with many projects having yet to pass the final investment decision (FID) bar.
From heating our homes to fueling our cars and storing excess energy, proponents have touted hydrogen as a key player in decarbonizing the economy. In the transportation sector, hydrogen fuel cells power engines by creating electricity, emitting only water vapor. In the heavy industry sectors such as cement and steel production, some companies have started exploring the use of green hydrogen instead of coking coal. Meanwhile, in the energy sector, renewable electricity may be converted into hydrogen and stored for later use. In 2023, the global hydrogen energy storage market value was estimated at nearly 16 billion U.S. dollars.
The early years of wind and solar energy use may be a lesson for how the green hydrogen market develops in the future. As with wind and solar, much hinges on government support and incentives for alternative energy exploration to make renewable-sourced hydrogen a cost-competitive substitute.
What is hydrogen and how may it help decarbonize multiple industries?
Although it is the most abundant chemical element in the universe, hydrogen does not occur freely in nature and has to be produced using other energy sources. The most common source for global hydrogen production is methane via steam-reforming, with renewable electrolysis only accounting for less than one percent. However, the industry sees great potential in exploiting non-dispatchable excess wind and solar power to manufacture green hydrogen. In fact, production capacity forecasts based on 2023 announced projects see green hydrogen far outpacing fossil gas-based production by 2030.From heating our homes to fueling our cars and storing excess energy, proponents have touted hydrogen as a key player in decarbonizing the economy. In the transportation sector, hydrogen fuel cells power engines by creating electricity, emitting only water vapor. In the heavy industry sectors such as cement and steel production, some companies have started exploring the use of green hydrogen instead of coking coal. Meanwhile, in the energy sector, renewable electricity may be converted into hydrogen and stored for later use. In 2023, the global hydrogen energy storage market value was estimated at nearly 16 billion U.S. dollars.
Hydrogen market landscape – concentration in developed countries
Developed countries have so far benefitted the most from hydrogen financing. As of 2023, China had attracted the most direct investments in committed projects, followed by North America and Europe. Conversely, there has been a push to build up hydrogen infrastructure in emerging markets and developing countries (EMDC), which so far only make up 39 percent of the global hydrogen project pipeline. Projects in these countries have had particular trouble in getting off the ground and were more likely to fold at the FID stage.Current and future challenges
Some of the major drawbacks addressed by critics circle around costs, transportation, and uncertainty over the performance of a hydrogen economy. For example, when looking at alternative transportation fuel efficiency, hydrogen fuel cells were found to only reach an overall efficiency of 30 percent compared with 77 percent for directly chargeable battery electric vehicles. There have also been some studies on the feasibility of hydrogen-heated homes suggesting it could increase accident and ignition probabilities. Additionally, retrofitting existing gas pipelines for hydrogen use would more quickly corrode steel-based pipelines and very likely lead to leakages due to the smaller size of the hydrogen molecule.The early years of wind and solar energy use may be a lesson for how the green hydrogen market develops in the future. As with wind and solar, much hinges on government support and incentives for alternative energy exploration to make renewable-sourced hydrogen a cost-competitive substitute.
