The Future of Hydrogen: Surpassing LNG by 2030
Written on
Chapter 1: Hydrogen Market Projections
According to Deloitte's recent analysis, the global hydrogen market is poised to overtake the liquefied natural gas (LNG) sector by 2030. The report estimates that by this time, the green hydrogen market will generate approximately $642 billion, surpassing LNG trading volume. Looking further ahead, by 2050, the hydrogen market is expected to reach an impressive $1.4 trillion annually. In terms of physical output, sales of clean hydrogen are projected to hit 170 million tons by 2030 and 600 million tons by 2050—figures that are notably optimistic compared to similar studies. By mid-century, it's anticipated that 85% of hydrogen consumption will consist of green hydrogen, while 15% will be blue hydrogen.
This analysis highlights the significant potential for developing nations in the hydrogen sector. With appropriate investments, these countries could account for nearly 70% of the anticipated green hydrogen production by 2050, potentially creating up to 2 million jobs annually between 2030 and 2050.
The first video provides an overview of the hydrogen market in 2024, illustrating the transition from mere hype to practical realities.
Section 1.1: Global Trade and Economic Impacts
By 2050, the worldwide trade in hydrogen is projected to generate over $280 billion in annual export revenues, with North Africa standing to gain the most, estimated at $110 billion, thanks to its high export potential. Deloitte's Hydrogen Pathway Explorer (HyPE) model assesses the capacity of clean hydrogen to mitigate emissions, revealing that hydrogen could help cut CO2 emissions by 85 gigatons by 2050—a figure that more than doubles the global CO2 emissions recorded in 2021. The ferrous metallurgy sector shows the greatest promise for emissions reduction through hydrogen use.
In terms of consumption, the industrial and transportation sectors are expected to account for 42% and 36% of hydrogen usage, respectively. The establishment of diversified transport infrastructure and inter-regional trade will be essential to fully realize the hydrogen market's potential.
Subsection 1.1.1: Regulatory Environment and Recommendations
The report outlines critical recommendations for creating an effective regulatory framework for hydrogen market development. This includes formulating national and regional strategies, establishing a transparent certification process, setting clear objectives, and providing fiscal incentives and subsidies to bridge the cost gap between clean and fossil fuels.
Section 1.2: Investment Needs and Market Challenges
To achieve net-zero emissions by 2050, the report emphasizes a combined investment of over $9 trillion in the global clean hydrogen supply chain.
Chapter 2: Cost and Feasibility of Green Hydrogen
There has been considerable debate surrounding future consumption levels and the cost of green hydrogen. Various studies present contrasting assessments. For instance, a January 2022 report from Rethink Energy projected that in two years, green hydrogen would become cheaper than gray hydrogen, estimating costs to drop just above $1 per kilogram by 2035. Conversely, a December 2021 report from Wood Mackenzie suggested that green hydrogen might be less than $1 per kilogram in certain markets by 2030.
The second video discusses whether the energy sector is on track to meet net-zero targets sooner than expected.
German think tanks have also weighed in on these forecasts. A 2020 report commissioned by the German Federal Ministry of Economics and Energy found no signs of competitive pricing for green hydrogen by 2050, particularly for synthetic fuels derived from it. Additionally, a 2021 analysis by Agora Energiewende concluded that even with a CO2 price of €200 per tonne, green hydrogen would not be competitive.