Reports related to this article:
Project(s): View 6 related projects in PECWeb
Plant(s): View 6 related plants in PECWeb
Released October 02, 2024 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Those who want to see hydrogen play a significant role in the energy transition probably were disappointed by the report on the annual hydrogen business prepared by the International Energy Agency (IEA) (Paris, France), released October 2.
Global demand for hydrogen rose 2.5% in 2023, to an estimated 97 million tons per year (MTPY), said the report, "Global Hydrogen Review 2024." Nearly all of that hydrogen was used by chemical processors (principally fertilizer manufacturers) and petroleum refiners, the IEA wrote. In a discouraging note for energy transition hopefuls: Approximately 63% of that hydrogen was produced from natural gas without carbon capture, sequestration and use (CCUS). Another 20% came from coal.
Click on the images at right to see global snapshots from the IEA on hydrogen demand and supply for 2023.
Low-emission hydrogen production in 2023 was "marginal," the agency wrote, accounting for less than 1 million tons in 2023.
"A wave of new projects shows the continued momentum for low-emissions hydrogen despite challenges due to regulatory uncertainties, persistent cost pressures and a lack of incentives to accelerate demand from potential consumers," the IEA observed.
The energy agency was encouraged that the number of low-emissions hydrogen projects that reached final investment decision (FID) stage doubled in the past 12 months. If all were built, today's global production of low-emissions hydrogen would increase five-fold by 2030.
If all announced low-hydrogen projects are built around the world, total production could reach almost 50 million ton per year by 2030, the IEA projected. However, it also acknowledged that outcome was doubtful, as it would require the hydrogen sector to grow at an unprecedented compound annual growth rate of more than 90% between now and 2030, well above the growth experienced by solar photovoltaics (PV) during its fastest expansion phases.
Industrial Info is tracking 2,196 hydrogen-related projects being developed in 89 countries around the world. These proposed capital projects are scheduled to kick off construction between January 2024 and December 2026. All of these proposed projects have a "medium" (between 70% and 80%) or "high" (81% to 99%) probability of beginning construction as scheduled. In all, these projects have a total investment value (TIV) of about $467 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for a list of detailed project reports.
The nations with the highest dollar value of these medium-to-high probability hydrogen projects under development include the U.S. (128 projects worth about $70.9 billion), India (232 projects valued at approximately $66.4 billion) and Egypt (58 projects worth about $44.3 billion).
The IEA report said that worldwide investment in electrolyzer installations is expected to reach about $7 billion in 2024, up about 133% over the slightly less than $3 billion invested in in 2023 and less than $1 billion invested in 2022. But it noted: "Even though the rate of (electrolyzer) deployment is impressive, it still represents only 6% of the $50 billion that needs to be invested on average annually until 2030 in order to get on track with the agency's net zero by 2050 scenario."
Click on the image at right to see a snapshot of global investment in electrolyzer installations since 2019.
Spending on hydrogen infrastructure projects, such as pipelines, storage and refueling, remains at a much lower level.
Commenting on the IEA hydrogen report, Fatih Birol, executive director of the IEA, said, "The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals. But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector."
Despite new project announcements, installed capacity for electrolyzers and low-emissions hydrogen volumes remain low as developers wait for clarity on government support before making investments, the agency noted. Uncertainty around demand and regulatory frameworks, it continued, mean most potential production is still in planning or early-stage development, with some larger projects facing delays or cancellations due to these barriers along with permitting challenges or operational issues.
The IEA report included several recommendations to accelerate the global hydrogen business, including:
Global demand for hydrogen rose 2.5% in 2023, to an estimated 97 million tons per year (MTPY), said the report, "Global Hydrogen Review 2024." Nearly all of that hydrogen was used by chemical processors (principally fertilizer manufacturers) and petroleum refiners, the IEA wrote. In a discouraging note for energy transition hopefuls: Approximately 63% of that hydrogen was produced from natural gas without carbon capture, sequestration and use (CCUS). Another 20% came from coal.
Low-emission hydrogen production in 2023 was "marginal," the agency wrote, accounting for less than 1 million tons in 2023.
"A wave of new projects shows the continued momentum for low-emissions hydrogen despite challenges due to regulatory uncertainties, persistent cost pressures and a lack of incentives to accelerate demand from potential consumers," the IEA observed.
The energy agency was encouraged that the number of low-emissions hydrogen projects that reached final investment decision (FID) stage doubled in the past 12 months. If all were built, today's global production of low-emissions hydrogen would increase five-fold by 2030.
If all announced low-hydrogen projects are built around the world, total production could reach almost 50 million ton per year by 2030, the IEA projected. However, it also acknowledged that outcome was doubtful, as it would require the hydrogen sector to grow at an unprecedented compound annual growth rate of more than 90% between now and 2030, well above the growth experienced by solar photovoltaics (PV) during its fastest expansion phases.
Industrial Info is tracking 2,196 hydrogen-related projects being developed in 89 countries around the world. These proposed capital projects are scheduled to kick off construction between January 2024 and December 2026. All of these proposed projects have a "medium" (between 70% and 80%) or "high" (81% to 99%) probability of beginning construction as scheduled. In all, these projects have a total investment value (TIV) of about $467 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for a list of detailed project reports.
The nations with the highest dollar value of these medium-to-high probability hydrogen projects under development include the U.S. (128 projects worth about $70.9 billion), India (232 projects valued at approximately $66.4 billion) and Egypt (58 projects worth about $44.3 billion).
The IEA report said that worldwide investment in electrolyzer installations is expected to reach about $7 billion in 2024, up about 133% over the slightly less than $3 billion invested in in 2023 and less than $1 billion invested in 2022. But it noted: "Even though the rate of (electrolyzer) deployment is impressive, it still represents only 6% of the $50 billion that needs to be invested on average annually until 2030 in order to get on track with the agency's net zero by 2050 scenario."
Spending on hydrogen infrastructure projects, such as pipelines, storage and refueling, remains at a much lower level.
Commenting on the IEA hydrogen report, Fatih Birol, executive director of the IEA, said, "The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals. But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector."
Despite new project announcements, installed capacity for electrolyzers and low-emissions hydrogen volumes remain low as developers wait for clarity on government support before making investments, the agency noted. Uncertainty around demand and regulatory frameworks, it continued, mean most potential production is still in planning or early-stage development, with some larger projects facing delays or cancellations due to these barriers along with permitting challenges or operational issues.
The IEA report included several recommendations to accelerate the global hydrogen business, including:
- Accelerate demand creation for low-emissions hydrogen by leveraging industrial hubs and public procurement
- Support project developers to scale up low-emissions hydrogen production and drive cost reductions
- Strengthen regulation and certification of environmental attributes for low-emission hydrogen
- Identify opportunities to start developing hydrogen infrastructure
- Support emerging markets and developing economies (EMDEs) in expanding low-emissions hydrogen production and use
