Hydrogen demand will reach 115mn t/yr by 2030, according to the IEA in its latest Global Hydrogen Review.

Demand projections among other organisations are relatively consistent, with risk management group DNV foreseeing 131mn t/yr of demand by 2030 in its latest report, and thinktank the Energy Transition Commission estimating 120mn t/yr.

All three forecasts are based largely around national and regional hydrogen strategies that lay out targets up to 2030—and all are low compared to what is needed, the IEA says.

Some 130mn t/yr would be required by 2030 to meet existing climate pledges put forward by governments around the world, and nearly 200mn t/yr by the same date to be on track for net-zero emissions by 2050, the IEA says.

200mn t/yr – IEA estimate for 2030 hydrogen demand needed for net zero by 2050

Meeting these demand levels would mean extending hydrogen consumption from current use sectors—which accounted for 94mn t/yr this year. These sectors, such as refining and fertilisers, will likely switch from using grey ammonia to green but will not have significantly higher levels of demand in 2030.

Instead, use would need to grow in new sectors. There are signs this is starting to happen, the IEA says. There is rising number of new steel project announcements, the first fleet of hydrogen trains have started operating in Germany, there are more than 100 pilot projects for using hydrogen derivatives in shipping and projects to co-fire ammonia in the power sector have reached almost 3.5GW of potential capacity by 2030.

But demand for hydrogen in these new sectors—heavy industry, transport, shipping and power generation—is currently at just 0.04mn t/yr. Under a net-zero scenario, this figure would have to rise to 32.5mn t/yr by 2030.

Chicken, meet egg

On the supply side, more projects will need to be put in place to meet even the low-end demand forecast.

If all projects in the pipeline were realised, by 2030 the production of low-carbon hydrogen would reach 16-24mn t/yr (9-14mn t/yr from green hydrogen and 7-10mn t/yr from blue hydrogen), meaning at least 90mn t/yr of capacity still needs to be built by 2030 to meet expected levels of demand.

Lack of regulatory certainty—especially in the EU, which has been slow to provide a definition of renewable hydrogen—is hampering the development of supply.

“Although it is expected that the project pipeline will continue to grow over the coming years, there is a need to provide early support for projects to ensure they reach [FIDs] and scale up,” says the IEA report.

More regulatory certainty and the development of pioneering projects will lead to the costs of green hydrogen production falling, which in turn will trigger the development of more projects, the IEA says. Combined with the expected drop in the cost of renewable energy, this could bring the cost of green hydrogen as low as $1.3/kg by 2030 in regions with cheap renewable resources.

So far, government policy has tended to fall on the supply side, according to the IEA.

“There is still not enough policy activity for creating hydrogen demand, which is critical to secure offtake agreements. A lack of demand creation can hinder [FIDs],” it says.

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Author: Tom Young