Rising Momentum and Challenges: IEA's Global Hydrogen Review 2024
Key Ideas
- Investment and projects in low-emissions hydrogen are increasing, with a focus on sectors like heavy industry and transport.
- Despite regulatory uncertainties and cost pressures, the number of projects reaching final investment decision has doubled, indicating momentum.
- Global electrolyser capacity has reached 20 GW, with potential to produce nearly 50 million tonnes of low-emissions hydrogen by 2030.
- Governments' production targets for low-emissions hydrogen exceed demand targets, calling for policy adjustments to stimulate buyer interest.
The International Energy Agency (IEA) notes a growing interest in low-emissions hydrogen projects despite challenges. The Global Hydrogen Review 2024 highlights a significant increase in investments in low-emissions hydrogen, specifically in heavy industry and transportation sectors. The report indicates a doubling in projects reaching final investment decision in the past year, with global electrolyser capacity now at 20 GW. If all announced projects are realized, production could reach 50 million tonnes yearly by 2030, requiring an extraordinary growth rate. China leads in electrolyser capacity, with 40% of recent investments.
Challenges faced include regulatory uncertainties, cost pressures, and lack of incentives for consumer demand. Developers are cautious due to a need for government support and clear regulations. The report emphasizes the importance of matching government production goals with demand targets. Although some policies stimulate demand for low-emissions hydrogen, additional measures are necessary to meet climate goals.
Despite cost pressures, technology advancements are crucial for cost reductions. The report suggests that by 2030, hydrogen production via electrolysis in China could become cheaper than coal-based production, with mass manufacturing playing a key role. Latin America is highlighted as a potential hub for low-emissions hydrogen, with a focus on refining and ammonia production.
In conclusion, while there is strong investor interest in low-emissions hydrogen projects, policy adjustments are needed to stimulate buyer interest and support the sector's growth.