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a global outlook

Several projects at a scale of tens of
kilotonnes of hydrogen are expected to
become operational over the next two
to three years. Demonstration projects
for using hydrogen in industrial
applications such as cement, ceramics
or glass manufacturing are also under
development.

GOVERNMENTS NEED TO SCALE UP AMBITIONS
AND SUPPORT DEMAND CREATION
Countries that have adopted hydrogen
strategies have committed at least
$37 billion; the private sector has
announced an additional investment of
$300 billion. But putting the hydrogen
sector on track for net zero emissions
by 2050 requires $1.2 trillion of
investment in low carbon hydrogen
supply and use through to 2030. A BMW HYDROGEN PROTOTYPE CAR
The focus of most government
policies is on producing low carbon Using renewable electricity to on track for a sustainable energy
hydrogen. Measures to increase produce hydrogen costs $3-8 per kg. system by 2050.
demand are receiving less attention. There is significant scope for cutting Developing a global hydrogen
Japan, Korea, France and the production costs through technology market can help countries with limited
Netherlands have adopted targets for innovation and increased deployment. domestic supply potential while
FCEV deployment. The potential is reflected in the IEA’s providing export opportunities for
But boosting the role of low carbon Net Zero Emissions by 2050 Scenario countries with large renewable or CO₂
hydrogen in clean energy transitions (NZE Scenario) in which hydrogen from storage potential.
requires a step change in demand renewables falls to as low as $1.30 per There is also a need to accelerate
creation. Governments are starting kg by 2030 in regions with excellent technology innovation efforts. Several
to announce a wide variety of policy renewable resources (range $1.30-3.50 critical hydrogen technologies today
instruments, including carbon prices, per kg), comparable with the cost of are in early stages of development. We
auctions, quotas, mandates and hydrogen from natural gas with CCUS. estimate that $90 billion of public money
requirements in public procurement. In the longer term, hydrogen costs needs to be channelled into clean energy
Most of these measures have not from renewable electricity fall as low innovation worldwide as quickly as
yet entered into force. Their quick and as $1 per kg (range $1.0-3.0 per kg) in possible – with around half of it dedicated
widespread enactment could unlock more the NZE Scenario, making hydrogen to hydrogen-related technologies.
projects to scale up hydrogen demand. from solar PV cost-competitive with
hydrogen from natural gas even without STRONGER INTERNATIONAL CO-OPERATION:
“A key barrier for low carbon CCUS in several regions. A KEY LEVER FOR SUCCESS
International co-operation is critical to
hydrogen is the cost gap with MEETING CLIMATE PLEDGES REQUIRES FASTER accelerate the adoption of hydrogen.
hydrogen from unabated fossil AND MORE DECISIVE ACTION Japan has spearheaded developments
fuels. At present, producing While the adoption of hydrogen as a through the Hydrogen Energy
Ministerial Meeting since 2018.
clean fuel is accelerating, it still falls
hydrogen from fossil fuels is the short of what is required to help reach Several bilateral and multilateral
cheapest option in most parts net zero emissions by 2050. co-operation agreements and initiatives
of the world” If all the announced industrial plans are have since been announced, including
realised, by 2030: the Clean Energy Ministerial Hydrogen
Total hydrogen demand could grow as Initiative, the Hydrogen Mission of Mission
LOW CARBON HYDROGEN CAN BECOME high as 105Mt – compared with more Innovation and the Global Partnership for
COMPETITIVE WITHIN THE NEXT DECADE than 200Mt in the NZE Scenario Hydrogen of the United Nations Industrial
A key barrier for low carbon hydrogen is Low carbon hydrogen production Development Organisation.
the cost gap with hydrogen from unabated could reach more than 17Mt – one These join the existing International
fossil fuels. At present, producing eighth of the production level Partnership for Hydrogen and Fuel Cells
hydrogen from fossil fuels is the cheapest required in the NZE Scenario in the Economy and the IEA Hydrogen
option in most parts of the world. Electrolysis capacity could rise to and Advanced Fuel Cells Technology
Depending on regional gas prices, the 90GW – well below the nearly 850GW Collaboration Programme. Stronger
levelised cost of hydrogen production in the NZE Scenario coordination among such initiatives is
from natural gas ranges from $0.50 Up to six million FCEVs could be important to avoid duplication of efforts
to $1.70 per kilogramme (kg). Using deployed – 40 per cent of the level of and ensure efficient progress.
CCUS technologies to reduce the CO₂ deployment in the NZE Scenario (15
emissions from hydrogen production million FCEVs) Source: IEA. All rights reserved.
increases the levelised cost of Much faster adoption of low carbon International Energy Agency Website:
production to around $1-2 per kg. hydrogen is needed to put the world www.iea.org

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