The growth of low-carbon hydrogen hinges upon faster and more decisive action by governments on a wide range of policy measures which will enable low-carbon hydrogen to fulfill its potential to help the world reach net zero emissions while supporting energy security, a new report from the International Energy Agency (IEA) said Monday.
The IEA's Global Hydrogen Review 2021 showed that global production of low-carbon hydrogen is currently minimal, its cost is not yet competitive and its use in promising sectors such as industry and transport remains limited.
However, there are encouraging signs that it is on the cusp of significant cost declines and widespread global growth, the IEA said.
Currently 17 governments have released hydrogen strategies and more than 20 others announced they are working to develop hydrogen strategies.
As a number of companies are seeking to tap hydrogen business opportunities and pilot projects are underway to produce steel and chemicals with low-carbon hydrogen, the IEA expects that the cost of fuel cells that run on hydrogen to continue to fall.
Countries with hydrogen strategies have committed at least $37 billion to the development and deployment of hydrogen technologies while the private sector has announced additional investment of $300 billion.
However, putting the hydrogen sector on path consistent with global net zero emissions by 2050 requires $1.2 trillion of investment between now and 2030, the IEA estimates.
'It is important to support the development of low-carbon hydrogen if governments are going to meet their climate and energy ambitions,' said Fatih Birol, the IEA Executive Director.
'We have experienced false starts before with hydrogen, so we cannot take success for granted. But this time, we are seeing exciting progress in making hydrogen cleaner, more affordable and more available for use across different sectors of the economy,' he said.
Birol urged governments to take rapid actions to lower the barriers holding the low-carbon hydrogen back from faster growth as it will be critical if the world is to have a chance of reaching net zero emissions by 2050.
According to the report, almost all hydrogen produced today is from fossil fuels and without carbon capture. This production leads to a close 900 million tonnes of CO2 emissions, equivalent to the combined emissions of the UK and Indonesia.
Producing hydrogen from renewables can cost between 2 and 7 times as much as producing it from natural gas without carbon capture but the cost of making hydrogen with solar electricity can become competitive with hydrogen made with natural gas with technological advances and economies of scale, the IEA said.
The report revealed that global capacity of electrolysers producing hydrogen from water using electricity doubled over the last five year and around 350 projects are under development while another 40 projects are in early stages of development.
If all these projects are realized, global hydrogen supply from electrolysers would reach 8 million tonnes by 2030 which shows a huge increase from today's level of less than 50,000 tonnes but still remains below 80 million tonnes required in 2030 in line with the IEA's pathway to net zero emissions by 2050.
By Nuran Erkul Kaya