Low-emission hydrogen projects are gaining momentum despite challenges due to regulatory uncertainties, persistent cost pressures and a lack of incentives to accelerate demand from potential consumers, according to a new report by the International Energy Agency on Wednesday.
The IEA’s annual report Global Hydrogen Review 2024 shows that the number of projects reaching final investment decisions for low-emissions hydrogen has doubled in the past year, positioning global production to increase fivefold by 2030.
The total electrolyzer capacity that has reached the final investment decision now stands at 20 gigawatts (GW) globally, according to the report.
“If all announced projects are realized worldwide, total production could reach almost 50 million tonnes a year by the end of this decade,” it added.
However, to achieve this target, the hydrogen sector would need to grow at a compound annual rate of over 90% between now and 2030, a pace far surpassing the historical growth of even the fastest-expanding solar PV markets.
According to the report, China accounts for over 40% of the more than 6 GW of electrolyzer capacity that reached the final investment decision in the past year.
The report also highlights a gap between government goals for production and demand. “Production targets set by governments worldwide add up to as much as 43 million tonnes per year by 2030, but demand targets only total just over a quarter of this, at 11 million tonnes by 2030,” it added.
Commenting on the report, IEA executive director Fatih Birol noted that the surge in new hydrogen projects indicates strong investor confidence in its potential to decarbonize industries like steel and refining.
“But for these projects to be a success, low-emissions hydrogen producers need buyers,' Birol said. 'Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.”
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr