McKinsey cuts 2050 hydrogen forecast as costs soar and policy uncertainty grows

McKinsey has cut its projected hydrogen demand for 2050 by up to 25%, citing cost increases and regulatory uncertainty as barriers to growth.

The consultancy’s latest Global Energy Perspective report highlights that while hydrogen remains a critical component of the clean energy transition, the sector faces rising capital costs, slower learning rates, and higher expenses for renewable energy storage and electrolysis technology.

This has driven up green hydrogen production costs by 20-40%, it reports. Although hydrogen demand is still expected to grow, particularly in traditional sectors like chemicals and refining, it is projected to be lower than anticipated in areas such as road transport and buildings.