Just 24% of 2030 clean hydrogen demand will materialise if existing policies across key regions are implemented, according to a new Hydrogen Council report.
Developed with McKinsey, the report estimates that 75% of 2030 clean hydrogen demand will come from established use cases like refining and ammonia production, while new applications face tough cost and infrastructure barriers.
The report categorises 34 million tonnes per annum (mtpa) of potential hydrogen demand in 2030 across the EU, the US and East Asia.
Just 8 mtpa expected to be met by existing policies like the EU’s Renewable Energy Directive (RED III), Japan’s Contracts for Difference (CfD) programme, and the US Inflation Reduction Act (IRA) – if implemented.
But even in these policy-backed sectors, some uses may struggle to afford clean hydrogen due to landed supply costs exceeding value-in-use in certain locations.
The demand concentration is driven by refining and ammonia production in the EU and US, and ammonia co-firing in Japan and South Korea’s power sector. The report notes that only 30% of the total hydrogen demand in these regions is expected to be met by clean hydrogen by 2030.
A further 13 mtpa by 2030 – around 90% of which is composed of refining and ammonia in the EU and the US – could be “unlocked” by 2030 with further infrastructure buildout and cost reductions. Expanding CCS infrastructure in the US is identified as a key enabler, with the potential to bridge a cost gap of $0.1-0.3/kg H2 in those traditional sectors.
Hydrogen imports from the US Gulf Coast, Australia, the Middle East, and Latin America are expected to play a role in supplying Europe and East Asia, but reconversion costs, such as ammonia cracking, push landed hydrogen prices up to $8/kg in some cases.
However, for emerging sectors like trucking, it says that gap increases to around $0.5/kg – requiring economies of scale from hydrogen production facilities and an established refuelling infrastructure base
The remaining 13 mtpa comes from primarily new sectors that have “limited decarbonisation alternatives to hydrogen,” like aviation, maritime and high-temperature industrial heat, but face a cost gap between $0.5 to over $5/kg H2.
“In hard-to-abate sectors, hydrogen and its derivatives constitute the key decarbonisation enablers, although under existing conditions, limited economic adoption is expected by 2030,” the report reads, while stressing they could become “some of the largest demand segments long-term.”
The report also estimates that fully decarbonising the projected 34 mtpa of demand would cut around 250 million tonnes of CO₂e annually. However, under current policy conditions, only 60-90 million tonnes of CO₂e in reductions are expected by 2030.
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