Shell anticipates hydrogen could meet 12pc of final energy demand by 2070 in its most optimistic 2050 global net-zero scenario—but only 4pc in a more energy security-focused scenario.

The major has published two far-reaching energy outlooks: Sky 2050, which models trends necessary to reach net zero by mid-century, and Archipelagos, which extrapolates current trends of increased geopolitical tensions and a deprioritisation of managing emissions compared with energy security. The Archipelagos scenario expects some transition toward low-carbon technologies and decreasing emissions, although net zero is never reached by 2100. The global average surface temperature also rises to and plateaus around 2.2°C by 2100 under Archipelagos, while Sky 2050 predicts an initial overshoot in rising temperatures managed down to 1.5°C by 2075 and 1.2°C by 2100.

While hydrogen gains a foothold in the energy sector by the mid-2020s and becomes a significant fuel by the 2030s under Sky 2050, this is delayed by a decade in the Archipelagoes scenario.

12pc – Hydrogen’s share of final energy demand by 2070 under Sky 2050

Renewable hydrogen also takes longer to take off in the energy security-focused scenario. While Sky 2050 expects renewables-powered electrolysis—mostly using solar—to be the dominant form of production by 2035, Archipelagoes anticipates it will be dominant only from 2055.

Shell has 30MW of operational electrolyser capacity, 20MW of which was brought online last year in China to supply renewable hydrogen for the Beijing Winter Olympics. The major has also taken FID on a 200MW electrolyser project—called Holland Hydrogen I—in the Netherlands, and this is scheduled for commissioning by the mid-2020s. Holland Hydrogen I is expected to produce 80t/d of, enough to meet up to 10pc of annual hydrogen demand from Shell’s Rotterdam energy and chemicals park.

Both of Shell’s long-term scenarios predict growing demand from heavy industry, heavy-freight road transport and shipping. Sky 2050 foresees hydrogen demand growth of 3EJ/yr in the 2040s, seven times the rate expected in Archipelagos, as well as the first commercial hydrogen-powered flights by the beginning of that decade. The net-zero scenario expects that switching from fossil fuels to hydrogen and other low-carbon alternatives will be driven by both domestic carbon pricing and the wider use of carbon border adjustment mechanisms, such as those adopted by the EU.

Death knell for hydrogen cars?

Shell expects that all passenger vehicles will run on electricity by 2070, noting the growth of the battery-electric vehicle market has exceeded predictions set 20 years ago, which prioritised hybrid systems and hydrogen fuel cells. Even in the Sky 2050 scenario, hydrogen vehicles represent only 25pc of the road freight fleet for long-distance haulage and could be overtaken by battery-electric options depending on how the technology develops.

The company notes in an energy transition progress report that, while it continues to operate 50 hydrogen retail sites in Europe and North America, “hydrogen is not yet widely used by motorists or commercial road transport customers”. It has ordered 25 hydrogen trucks in Germany, to be rented out in a pay-per-use system, as a trial to encourage commercial road transport users to gain experience with the fuel and determine what it will take to increase uptake of hydrogen options by drivers.

However, Shell’s energy scenarios also warn that access to critical raw minerals will likely be a limiting factor to the uptake of battery-electric vehicles and other energy transition technologies. In the case of some, such as copper and nickel, the metals are naturally abundant but supply is constrained by the ability of the mining industry to meet skyrocketing demand given the length of time needed to open new mines.

Supply could also face disruptions based on geopolitical tensions. Shell notes that most global ore processing and refining capacity for rare earth elements is based in China. The US imported 80pc of these elements directly from China in 2021, with the rest indirectly sourced from the country.

Some minerals also have geological limits, where “there is simply not enough in the ground to meet expected future demand”, Shell adds. The major highlights that global resources of cobalt—both in discovered and undiscovered deposits—may run short by mid-century if there is a rapid uptake of not only battery-electric passenger cars, but heavier batteries for commercial vehicles.

---

Author: Polly Martin