Hydrogen demand is projected to grow at least sixfold by 2050, driven by the road transport, maritime and aviation sectors, according to the central scenario in consultancy McKinsey’s Global Energy Perspective.

Demand could rise from 80mn t/yr today to 536mn t/yr by 2050, depending on uptake in particular sectors.

In McKinsey’s ‘Further Acceleration’ scenario—where countries accelerate their commitments to the Paris climate deal and global warming is kept to 1.9°C this century—industrial use in the iron and steel sectors will drive 29mn t/yr of hydrogen demand growth by 2035. Another 26mn t/yr of demand growth is expected to come from road transport, driven by the increasing cost-competitiveness of hydrogen vehicles. The remaining 40pc of demand growth is expected to come from the refining sector and the chemicals industry.

Hydrogen demand is projected to accelerate further after 2035 across all sectors, with road transport and new industrial uses still accounting for more than 50pc of growth.

Demand for synfuels production—mainly kerosene, diesel and ammonia for the aviation and maritime sectors—is particularly projected to accelerate after 2035, resulting in demand of 93mn t/yr in 2050, equivalent to around 17pc of overall hydrogen demand.

536mn t/yr – Potential global hydrogen demand in 2050

Refining is the only sector where demand is projected to decline after 2030 as the shift away from the use of oil products in transport reduces demand to just 13mn t/yr.

Hydrogen and hydrogen-derived synfuels will form 10pc of global final energy consumption in 2050, according to the scenario.

Supply side

Green hydrogen is expected to supply around 110mn t/yr (60pc of total supply) by 2035 and 510mn t/yr (95pc of total supply) by 2050—with the rest met by blue hydrogen production.

Green hydrogen capacity capable of producing 22mn t/yr of the fuel has been announced to date, approximately 15-20pc of what is needed by 2035—leaving scope for plenty of new projects to meet demand.

Hydrogen production will likely be a major driver of energy demand growth. By 2050, production of both green and blue forms of the fuel is projected to add approximately 18,000TWh of electricity consumption and around 300bn m³ of natural gas demand.

Cost reduction and increased scale-up of renewable energy production, electrolysers, and carbon capture, utilisation and storage will likely be needed to make clean technologies cost-competitive against conventional technologies, the report notes.

“Government support and targeted actions, such as an increase in CO₂ prices, could be key,” it says. “Such moves are particularly needed in segments where hydrogen will not be cost-competitive compared to the high-carbon alternative, such as the aviation sector.”

New trade routes are likely to emerge to connect demand centres with resource-rich regions, the report finds, with conversion of hydrogen into ammonia or methanol the most likely near-term options for shipping.

The predictions were made using McKinsey’s hydrogen model, which combines energy and hydrogen demand projections with country-specific cost estimates. It also models detailed cost outlooks for underlying green and blue hydrogen technologies and renewables.

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Author: Tom Young