Analysts predict hydrogen could meet up to 24 percent of the world’s energy needs, Thomas Sattich and Charis Palmer report.

Green hydrogen, which is created by splitting water molecules into hydrogen and oxygen using renewable electricity, has the potential to significantly reduce greenhouse gas emissions while assisting in meeting the world’s energy needs. Additionally, there is a need for means to ensure and authenticate the fuel’s origin as well as an internationally accepted definition of “green hydrogen.”

By 2050, the demand for hydrogen is projected to increase to 500–680 million metric tonnes (MT), from an anticipated 87 million MT in 2020. The market for hydrogen production was evaluated at $130 billion between 2020 and 2021, and it is anticipated to expand by up to 9.2% annually until 2030. However, there is a catch: only a small portion of the current hydrogen production, which accounts for over 95% of it, is “green.” Today, the production of hydrogen uses 6% of global natural gas and 2% of global coal.

However, there is a resurgence of interest in environmentally friendly hydrogen manufacturing techniques. This is due to the fact that hydrogen’s potential applications are growing in a variety of fields, including power generation, manufacturing processes in the steel and cement industries, fuel cells for electric vehicles, heavy transportation like shipping, production of green ammonia for fertilizers, cleaning products, refrigeration, and grid stabilization.

Governments around the world have already committed more than USD 70 billion to stimulate the hydrogen industry.

The obvious early movers are heavy industries looking to decarbonize, industrial shipping, and heavy vehicles. Large power utilities are eyeing it off for storage. All of these players are largely linked to the existing oil and gas industry. As countries transition to sustainable energy, oil, and gas-led economies could lose USD 7 trillion by 2040, the International Energy Agency has warned.

Additionally, the commercial viability of green hydrogen production has increased due to the declining cost of renewable energy sources, decreasing electrolyzer costs, and increased efficiency brought on by technological advancements. The forecast of the Levelized cost of hydrogen production for major projects worldwide through 2050 is depicted in the figure below.

Locating facilities for the generation of hydrogen and renewable energy close to one another will allow for greater integration of these projects, positioning them for success. Governments must also establish legal and policy frameworks that encourage investment.