Demand for low-carbon hydrogen in 2050 could be anywhere between 300mn t/yr and over 800mn t/yr, according to an analysis of various different organisations’ modelling and scenarios by Hydrogen Economist. Estimates for hydrogen’s share of total global energy use range between 5pc and 20pc.

The wide range of projections is a result of uncertainties around future policy, sectoral strategies and the degree to which countries are able to achieve their nationally determined contributions (NDCs) to the Paris Agreement.

Much of the uncertainty around the models’ projections comes in after 2030. Of the three main scenarios analysed by Hydrogen Economist—those of risk management group DNV, think tank the Energy Transition Commission (ETC) and international energy data provider the International Energy Agency (IEA)—projections in demand up to 2030 remain relatively consistent.

100mn t/yr - Current hydrogen demand

DNV’s model foresees 135mn t/yr of hydrogen demand by that year, while the ETC foresees 120mn t/yr and the IEA 212mn t/yr. Currently demand, which is mostly met by grey hydrogen, is around 100mn t/yr.

All three forecasts are based largely around national and regional hydrogen strategies which lay out targets up to 2030.

There are clear overlaps between the forecasts in terms of which sectors form the bulk of demand up to that point, namely refining, methanol production and ammonia production. These are all sectors that use hydrogen today, and are likely to switch to either green or blue hydrogen over the next decade thanks to both policy incentives and falling costs. 

Post-2030 divergence

After 2030 the scenarios diverge as estimates of levels of penetration into other sectors—principally industrial heat, plastics, power generation, buildings heating and light transport—begin to vary. Some overlap also remains on levels of penetration into heavy-duty road transport, industrial heat and power storage.

The projections overlap largely on future price predictions for blue hydrogen, with all of them projecting costs to fall to around $2.5/kg by 2030 and remaining there. In contrast, depending on the scenario, green hydrogen could fall to $1.5/kg (DNV), below $2.5/kg (IEA) and below $2/kg (ETC) by 2050. Notably DNV’s model, which foresees the lowest price, also foresees the lowest amount of penetration of hydrogen into different sectors.

Sector uncertainty

The degree to which hydrogen penetrates sectors that do not currently use it depends largely on public policy, how well trade and transportation links are developed and how successful executed different nations’ net-zero strategies are. Although most major economies have now set headline goals to reach net zero by mid-century, few have yet laid out detailed plans for how to get there, and NDCs to the Paris Agreement only require nations to submit plans out to 2030.

The highest-use case scenario from the ETC foresees hydrogen being used in almost every energy-intensive application that cannot be electrified, including buildings, heating, power generation, manufacture of sustainable aviation fuels (SAFs) and non-road transport such as rail. Aviation, shipping and steel are responsible for nearly 300mn t/yr of demand together under the scenario.

In comparison, the DNV scenario foresees very little penetration in the heating of buildings and power generation sectors—less than 20mn t/yr of demand by 2050. And aviation, shipping and steel are responsible for less than 50mn t/yr of demand by the same date.  

Aviation and shipping

The international nature of aviation and shipping mean they are not part of any nation’s NDC to the Paris Agreement. The sectors have therefore been slower to map out decarbonisation pathways.

The International Civil Aviation Organisation initially took an approach largely based around offsetting, although many in the sector now believe efficiency and the use of drop-in SAF will be the key tools for decarbonisation. It is possible to make SAF from both biomass and hydrogen, with both technologies some way away from commercialisation—leaving big questions marks around demand.

In June 2021, the International Maritime Organisation adopted key short-term measures aimed at cutting the carbon intensity of all ships by at least 40pc by 2030. A technology pathway for the sector is not clear yet—but ammonia and methanol could be used as fuels fairly easily, both of which can use low-carbon hydrogen as a feedstock.  Investments are starting to be made, but the early stages of the technology have contributed to a high degree of demand uncertainty even before 2030, let alone for the 2030-2050 period.

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Author: Tom Young