Global trade in low-carbon hydrogen will develop across four distinct phases, ending up with a fully mature traded market by 2050, according to the Global Hydrogen Flows report carried out by consultancy McKinsey for industry group the Hydrogen Council.

Trade in pure hydrogen is expected to remain regional and be shipped via a carrier only if there is no local demand—although some trade does develop as costs come down close to 2050.

However, hydrogen derivatives—including ammonia for end-use, methanol, synthetic kerosene and direct reduced iron—will increasingly be shipped around the world, given relatively low transport costs.

400mn t/yr – Volume of hydrogen traded by 2050

During the first phase up to 2025 the existing trade of grey ammonia and methanol will be replaced by some green ammonia and green methanol trade to Europe and Asia from North America, the Middle East and Norway.

By the end of the second phase—around 2030—long-distance pipelines will ship hydrogen to mainland Europe from Norway, and markets such as Japan and South Korea will be importing derivatives, mostly ammonia, from Australia on shipping routes. The US will also likely start to ship to the EU.

Flows to Asia and Europe from competitive production locations such as Latin America, North Africa and southern Africa will also start to emerge, initially in small volumes.

In total, volumes moving on ships and pipelines will reach c.1mn t/yr by 2030—with a mix of some ammonia, some methanol and a small amount of pure hydrogen in liquid, compressed or liquid organic hydrogen carrier form.

Reaching maturity

Pipeline transport will accelerate during the third phase, from 2030-40, exceeding 60mn t/yr by the end of the period.

Derivatives trade expansion will be driven by ammonia and synthetic kerosene, with pure hydrogen shipping increasing as technology costs come down.

By 2050, there will likely be more than 40 different trade routes with 1mn t/yr capacity, with the largest route carrying more than 20mn t/yr.

The largest-volume long-distance transfers will be domestic pipelines from western to eastern China and within the US.

Europe will primarily be supplied by pipelines from Norway, Russia and North Africa—although there will be some shipping from Latin America and the US.

Asia will be supplied by shipping from the Middle East, the US, Australia and Latin America. North American methanol exports to China will also increase—facilitated by low-cost production and ample CO₂.

“We now need to develop the pipeline, shipping and conversion infrastructure for a renewable energy system” Heid, McKinsey

Of a total of 400mn t/yr of hydrogen traded, more than half (205mn t/yr) will be via pipeline, 15pc in the form of synthetic kerosene (60mn t/yr), 13.75pc as ammonia (55mn t/yr), 8.75pc as green steel (35mn t/yr), 6.25pc as pure hydrogen (25mn t/yr) and 5pc as methanol (20mn t/yr).

More than 1,100 ships will be required to deliver the shipped hydrogen—approximately 75pc of today’s global fleet of 1,500 LNG carriers.

Existing ammonia and methanol ships could initially be reused, and synthetic kerosene and green steel pellets could be shipped using existing product tankers and bulk carriers. But, over time, these existing ships would need to be replaced with newbuilds.

“We now need to develop the pipeline, shipping and conversion infrastructure for a renewable energy system,” says Bernd Heid, senior partner at McKinsey.

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Author: Tom Young