Delays to the rollout of clean hydrogen projects have worsened over the past 12 months, and the industry needs a significant “investment jump” to fulfil its potential role in meeting climate commitments, according to joint analysis by lobby group the Hydrogen Council and management consultants McKinsey.

To accelerate the global energy system decarbonisation, an eightfold increase of investment in hydrogen is required until 2030, compared with the current commitment of $75b to projects that have achieved FID, they said in a joint report titled Hydrogen Insights 2024.

This is despite an “extraordinary sevenfold increase” in hydrogen projects reaching FID globally over the past four years, the report said.

“In the next two years, ensuring greater regulatory clarity and certainty and support for demand drivers will be critical for tackling project delays observed today alongside the development of the enabling midstream infrastructure,” the report said.

Hydrogen has faced macroeconomic headwinds over the last year, as well as higher-than-anticipated renewable power prices. Uncertainty over regulatory frameworks also remain a challenge. The report specifically cited implementation of the EU’s Renewable Energy Directive III rules at member-state level, and the rulebook for 45V tax credits under the US Inflation Reduction Act.

Project delays and expected project attrition imply that only 12–18mt/yr of the 48mt/yr of announced hydrogen supply could be deployed by 2030.

Announced plans for production capacity in 2028 and 2029 show a drop of 1mt/yr compared with a year ago, reflecting a worsening of project delays, the report said.

North America leads the way in terms of planned supply, with 2.4mt/yr post FID and 3.6mt/yr at the FEED stage. Most of the projects are for blue hydrogen. China has reached 1.4mt/yr of post FID capacity. Europe has 0.3mt/yr of post FID capacity and 2.9mt/yr at the FEED stage. The Middle East has 0.3mt/yr of supply post FID.

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Author: Stuart Penson