The hydrogen economy is currently in the critical phase of its development, according to data and analytics company GlobalData.
Industries such as steel, transportation and power seek to decarbonize their operations, with hydrogen being the focus of many projects. However, the demand for this commodity is, reportedly, not rising at the pace it was envisaged back in 2020 when companies announced their energy transition plans.
In a report “Hydrogen,” GlobalData revealed that about 83% of the low carbon hydrogen capacity coming online by 2030 is expected to come from green hydrogen plants, while the remainder is from blue hydrogen. Purple and turquoise hydrogen capacities are anticipated to be minuscule. Only about 2% of the total expected capacity by 2030 is said to be currently operational.
The company also noted that the demand from the oil and gas industry will remain the dominant driver for hydrogen in the foreseeable future, with additional demand expected to emerge from industries such as metallurgy, power generation and transportation.
Ravindra Puranik, Oil and Gas Analyst at GlobalData, commented: “Low-carbon hydrogen is set to occupy a crucial role in the decarbonization efforts of several energy-intensive industry verticals. As hydrogen is an essential feedstock in downstream oil and gas processes, switching to low-carbon hydrogen would help companies reduce their emissions footprint. It also has massive potential in the transportation sector, especially in marine and heavy vehicle applications, due to its energy density properties.”
“There has been a significant jump in low-carbon hydrogen project announcements in the last few years as industries unveiled plans to decarbonize their operations. Nearly 75% of these projects are in the feasibility stage of development. This reflects the momentum in new plant announcements within this market to reap from the global energy transition.”
“Several oil and gas companies have announced new blue and green hydrogen plants, which are expected to be operational by 2030. Nevertheless, there is a need for the hydrogen distribution network to expand at scale, which includes the addition of new pipelines. The current scenario signals a critical phase for the development of the global hydrogen economy. Its fate and momentum in the coming years will be decided by how things pan out in the near future.”
It is worth mentioning that as per data and analytics solutions provider Wood Mackenzie (WoodMac), the pace for the low-carbon-hydrogen and ammonia sectors is set to pick up in 2025, with key themes to watch for including the rise of blue hydrogen in the U.S., a giga-scale green project reaching final investment decision (FID), increased deployment of Chinese electrolyzers, the persistent mismatch between project FIDs and offtake contracts and a surge in low-carbon ammonia investments.