Market-Growing Interest in Low-carbon Hydrogen

The global hydrogen transition market appears to be on track to become a major global energy fuel use as global leaders seek energy solutions to help decarbonize and improve energy security momentum.

According to GlobalData, interest in low-carbon hydrogen fuels is growing rapidly as a way to accelerate the energy transition, which currently represents a potential capacity of more than 42 million tonnes/year.

Barbara Monterrubio, Energy Transition Analyst at GlobalData, said: “Hydrogen is gaining popularity as a low- or zero-carbon energy source in demand areas such as energy storage, buildings and transportation.

Many countries have begun to consider hydrogen-based economies to support decommissioning Carbon. Currently, green hydrogen accounts for a small share of hydrogen production, but given the ambitious targets announced by countries and companies, green hydrogen is expected to increase.”

By the end of 2021, the capacity of projects in the low-carbon hydrogen industry will exceed 42 million tons/year, most of which is from green hydrogen, and the current capacity of the electrolyzer pipeline is close to 300 GW.

So far, more than two-thirds of the 42 Mtpa of new capacity has come from the CIS region, Europe and Oceania, with 87% and 12% coming from green and blue projects, respectively, and less than 0.5% from violet and blue Green project.

In the fourth quarter of 2021, 33 countries announced new low-carbon hydrogen plants, with projects in Australia, Chile and the United States adding 3 million tonnes of annual hydrogen capacity to the world.

Monterrubio continued: “Countries in these regions are driving the use of hydrogen and are leaders in global hydrogen policy. They are also well-positioned to develop a hydrogen economy, but may need imports to meet their low-carbon goals.”

Australia continues to lead the world in future capacity with over 8 million tonnes/year of capacity across 90 different green hydrogen hubs and projects, where green ammonia export projects will capitalize on Japan, South Korea and China's demand for low carbon hydrogen expected growth.

North America and the Middle East lead in blue hydrogen capacity due to the low cost of natural gas. In North America, demand sectors will include refining, chemical, industrial and transportation.

Monterrubio added: “This year is a pivotal year for the industry as the first large-scale projects are expected to reach the final investment decision (FID) stage and start construction. The 2 GW Saudi New Energy recently started engineering and procurement work.

That’s the case with the (Neom) green hydrogen project. The project is scheduled to start this year and be completed by 2026.”