Clean hydrogen production will increase 30-fold by 2030. Will it be enough to meet energy goals?

Clean hydrogen production is about to enter a phase of exponential growth, with forecasts indicating a 30-fold increase by 2030.

This increase represents significant progress but remains below the expectations outlined in global government strategies.

12% of Hydrogen Production Capacity Has Identified a Buyer

To meet expectations, BloombergNEF states that much stronger incentives are needed to stimulate the demand for clean hydrogen, in addition to establishing carbon prices to make the adoption of clean technologies more economically viable.

Moreover, greater support for the hydrogen midstream sector, which includes storage and transportation, is crucial to ensure efficient and large-scale distribution.

Despite the increase in hydrogen supply, with electrolyzer shipments expected to grow 2-3 times in 2024, the excess production will not be sufficient to meet the growing demand. In fact, the supply of clean H2 is projected to increase 30-fold but will still fall short of the most ambitious energy goals.

Currently, only 12% of the projected hydrogen production capacity for 2030 has identified a buyer, a slight improvement from the 11% recorded last October. Furthermore, only 1/10 of the contractual volume is binding, indicating that many negotiations are still in preliminary stages.

The midstream sector represents a critical missing link. In the USA and Europe, the first large salt caverns for storing clean hydrogen are under construction, and Europe is developing new hydrogen pipelines. However, these efforts are not yet sufficient to meet the long-term demand.

Clean Hydrogen: Investments Still Too Low

Investments in the clean hydrogen sector, although growing, remain relatively low. Currently, only 5% of the announced production capacity will be operational by 2030.

This figure, though low, represents an improvement from 3% in 2023 and 1% in 2022, demonstrating a growing interest in the sector. However, it is clear that there is still a long way to go to reach the levels necessary for large-scale clean hydrogen production.

In summary, while clean hydrogen production is set to grow rapidly, achieving significant increases in the coming years, this growth must be accompanied by a corresponding rise in demand and investments in supporting infrastructure.