Global Hydrogen Review 2022
The Global Hydrogen Review is an annual publication by the International Energy Agency that tracks hydrogen production and demand worldwide, as well as progress in critical areas such as infrastructure development, trade, policy, regulation, investments and innovation.
Global Hydrogen Review 2022 Full PDF Online
The report is an output of the Clean Energy Ministerial Hydrogen Initiative and is intended to inform energy sector stakeholders on the status and future prospects of hydrogen while also informing discussions at the Hydrogen Energy Ministerial Meeting organised by Japan. Focusing on hydrogen’s potentially major role in meeting international energy and climate goals, this year’s Review aims to help decision makers fine-tune strategies to attract investment and facilitate deployment of hydrogen technologies while also creating demand for hydrogen and hydrogen-based fuels. It compares real-world developments with the stated ambitions of government and industry.
This year’s report includes a special focus on how the global energy crisis sparked by Russia’s invasion of Ukraine has accelerated the momentum behind hydrogen and on the opportunities that it offers to simultaneously contribute to decarbonisation targets and enhance energy security.
INTERNATIONAL ENERGY AGENCY
The IEA examines the full spectrum of energy issues including oil, gas and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand side management and much more. Through its work, the IEA advocates policies that will enhance the reliability, affordability and sustainability of energy in its 31 member countries, 11 association countries and beyond. Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/t&c/
Executive Summary Hydrogen demand is growing, with positive signals in key applications Hydrogen demand reached 94 million tonnes (Mt) in 2021, recovering to above pre-pandemic levels (91 Mt in 2019), and containing energy equal to about 2.5% of global final energy consumption. Most of the increase came from traditional uses in refining and industry, though demand for new applications grew to about 40 thousand tonnes (up 60% from 2020, albeit from a low base). Some key new applications for hydrogen are showing signs of progress. Announcements for new steel projects are growing fast just one year after the start-up of the first demonstration project for using pure hydrogen in direct reduction of iron. The first fleet of hydrogen fuel cell trains started operating in Germany. There are also more than 100 pilot and demonstration projects for using hydrogen and its derivatives in shipping, and major companies are already signing strategic partnerships to secure the supply of these fuels. In the power sector, the use of hydrogen and ammonia is attracting more attention; announced projects stack up to almost 3.5 GW of potential capacity by 2030. Considering policies and measures that governments around the world have already put in place, we estimate that hydrogen demand could reach 115 Mt by 2030, although less than 2 Mt would come from new uses. This compares with the 130 Mt (25% from new uses) that would be needed to meet existing climate pledges put forward by governments around the world so far, and with nearly 200 Mt needed by 2030 to be on track for net zero emissions by 2050. The pipeline of projects for low-emission hydrogen production keeps expanding, but few are reaching FID Much of the increase in hydrogen demand in 2021 was met by hydrogen produced from unabated fossil fuels, meaning there was no benefit for mitigating climate change. The production of low-emission hydrogen was less than 1 Mt in 2021, practically all of it coming from plants using fossil fuels with carbon capture, utilisation and storage (CCUS). However, the pipeline of projects for the production of low emission hydrogen is growing at an impressive speed. If all projects currently in the pipeline were realised, by 2030 the production of low-emission hydrogen could reach 16-24 Mt per year, with 9-14 Mt based on electrolysis and 7-10 Mt on fossil fuels with CCUS. In the case of electrolysis, the realisation of all the projects in the pipeline could lead to an installed electrolyser capacity of 134 240 GW by 2030, with the lower end of the range similar to total installed renewable capacity in Germany and at the upper end in all of Latin America. Meeting governments’ climate pledges would require 34 Mt of low-emission hydrogen production per year by 2030 a path compatible with reaching net zero emissions by 2050 globally would require around 100 Mt by 2030. A significant portion of projects are currently at advanced planning stages, but just a few (4%) are under construction or have reached final investment decision (FID). Among the key reasons are uncertainties about demand, lack of regulatory frameworks and of available infrastructure to deliver hydrogen to end users.
Expanding electrolyser manufacturing capacity is critical to rolling out of hydrogen supply chains Electrolysers using low-emission electricity are needed to produce low-emission hydrogen. Today, electrolyser manufacturing capacity sits at nearly 8 GW/yr, and based on industry annuncements it could exceed 60 GW/yr by 2030. This would be enough to meet current government targets for electrolysis deployment, but the build-out depends on government targets being translated into real-world projects beyond the current project pipeline. Although it is expected that the project pipeline will continue to grow over the coming years, there is a need to provide early support for projects to ensure that they reach FID and scale up. Our analysis suggests that with today’s fossil energy prices, renewable hydrogen could already compete with hydrogen from fossil fuels in many regions, especially those with good renewable resources and that must import fossil fuels to meet demand for hydrogen production. There is of course uncertainty about how this plays out over the next few years. But if electrolyser projects in the pipeline are realised and the planned scale-up in manufacturing capacities takes place, costs for electrolysers could fall by around 70% by 2030 compared to today. Combined with the expected drop in the cost of renewable energy, this can bring the cost of renewable based hydrogen down to a range fo USD 1.3-4.5/kg H2 (equivalent to USD 39-135/MWh). The lower end of this range is in regions with good access to renewable energy where renewable hydrogen could already be structurally competitive with unabated fossil fuels. Large volumes of hydrogen could be traded by the end of the decade if barriers are addressed soon The world’s first shipment of liquefied hydrogen from Australia to Japan took place in February 2022, a key milestone in the development of an international hydrogen market. Based on the export-oriented projects under development, an estimated 12 Mt of hydrogen could be exported annually by 2030, with 2.6 Mt/yr planned to come online by 2026. Nearly all of these export-oriented hydrogen project plans have been announced in the last two years, with most projects that have identified a hydrogen carrier chosing ammonia as the preferred option. However, off-take and importing arrangements are lagging behind the scale of planned exports: only 2 Mt H2/yr has secured a customer or potential customer. Project developers and investors are facing high uncertainty in a nascent market and many governments have yet to implement specific hydrogen trade policies, which are necessary for the successful development of projects. International cooperation is vital to facilitate alignment and identify barriers that could slow the development of a hydrogen market.
