27th October 2022
Energy players should capitalise on the rising interest in hydrogen to gain an advantage in the energy transition. In addition to hydrogen emerging as a crucial solution in the energy transition, renewable energy sources (RES) are essential for achieving the world's climate goals. Although it is currently only used in a few applications, hydrogen has the potential to enable a decarbonized electric grid and replace fossil fuels in many applications in the building, transportation, and industry sectors.
Growing amounts of RES will be used to produce green hydrogen in the coming years, opening up a sizable value pool.
Despite the sincere efforts put forth to date, more thorough research is still needed before hydrogen-based fuel cells for electric cars and pure hydrogen vehicles can be developed and used. Due to its clean energy feature, which includes zero emissions and high energy transfer capability, hydrogen fuel is the preferred option. When compared to electric vehicles, the hydrogen fuel-based vehicle has advantages in terms of cost and refuelling time that may draw in a sizable customer base.
There are numerous modern applications for hydrogen. Industries like oil refining, chemical production, steel production, and high-temperature heat generation dominate the fuel market. Hydrogen fuel is used in the creation of electricity, buildings, and transit in addition to the industry. Hydrogen fuel cells are used in automobiles, ships, and aircraft.
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Since they are energy carriers, hydrogen fuel cells can be put to a variety of uses. Fuel cell applications typically include transportation (such as passenger cars, trucks, forklifts, buses, logistic vehicles, aviation, marine, and e-bikes), stationary power (such as combined heat and power [CHP], uninterruptible power systems [UPS], distributed power generation], and other applications like portable power and unmanned aerial vehicles [UAVs]), and portable power.
The competitiveness of hydrogen fuel cell vehicles is determined by the price of hydrogen fuel cells and the accessibility of refuelling stations. Aircraft and shipping have restrictions on low-carbon fuel alternatives, which opens up a market for hydrogen-based fuels. Hydrogen is one of the most commonly used chemicals for storing renewable energy in power generation, and when combined with other chemicals like ammonia, it may be used in gas turbines to increase power system flexibility. Hydrogen may be integrated into existing natural gas networks in buildings. Since fossil fuels are used to produce almost all hydrogen, clean hydrogen has a significant potential to reduce emissions.
States have launched initiatives to achieve green hydrogen production and utilization, including India, the Philippines, Southern Africa, Japan, Germany, Patagonia, Saudi Arabia, and California.
In 2021, the market for hydrogen fuel cells was worth USD 6.8 billion. At a CAGR of 21.8% from 2022 to 2028, the market is projected to increase from USD 7.9 billion in 2022 to USD 20.8 billion by 2028.
The market is divided into two segments: vehicular and non-vehicular. Throughout the forecast period, the vehicular segment is anticipated to hold the largest share of the market due to investments made by numerous nations in fuel cell technology to enhance the transportation infrastructure and lowering emissions.
Proton exchange membrane fuel cell (PEMFC), phosphoric acid fuel cell (PAFC), alkaline fuel cell (AFC), microbial fuel cell (MFC), and others are the technology segments of the global hydrogen fuel cell market. Due to the numerous benefits linked to the technology, the proton exchange membrane fuel cell (PEMFC) segment is anticipated to have the largest market share of these over the forecast period.
Ballard Power Systems, FuelCell Energy, Inc., PLUG POWER INC., Mitsubishi Power (Mitsubishi Heavy Industries Ltd.), Cummins Inc., SFC Energy AG, TW Horizon Fuel Cell Technologies, Toshiba Energy Systems & Solutions Corporation, and others are some of the well-known market leaders in the global hydrogen fuel cell market.
Ten governments, including Canada, Chile, France, Germany, the Netherlands, Norway, Portugal, Russia, Spain, and the European Union, adopted hydrogen strategies in 2020.
France had already adopted a Plan for Deploying Hydrogen for the Energy Transition in 2018
By September 2021, four additional strategies had been adopted by the Czech Republic, Colombia, Hungary, and the United Kingdom
Norway had published a roadmap for finishing its strategy from the previous year
Additionally, more than 20 other nations have declared they are actively developing their public consultation strategies, and Poland and Italy have already published theirs.
Which nations are rising to become the world's hydrogen superpower?
The world order based on fossil fuels is being upended by the global search for clean energy. By 2050, hydrogen could make up to 12% of the world's energy consumption, resulting in the emergence of new energy superpowers.
But who is leading the charge in promoting clean hydrogen and other low-carbon fuels?
China published its first hydrogen roadmap in 2016, which helped the nation become a pioneer in the development of fuel cell trucks and buses and the third-largest FCEV fleet in the world.
The five-year economic plan of China lists six future industries, with hydrogen as one of them. Additionally, although there isn't a national strategy in place for hydrogen right now, it is mentioned in 16 provincial and municipal energy plans.
The EU has identified hydrogen as a crucial technology for achieving political objectives like the European Green Deal after releasing its national hydrogen strategy in 2020.
The chart depicts the potential annual funding for hydrogen projects from the EU in the years 2021 to 2030 at USD 4.56 billion.
India
During the 2021 launch of the nation's National Hydrogen Mission, Prime Minister Narendra Modi claimed that green hydrogen could help India take a "quantum leap" toward achieving energy independence by 2047.
Legislation requiring oil refineries and fertiliser factories to use a minimum amount of green hydrogen in their industrial processes is being considered by policymakers.
As part of its goal to establish the world's first "hydrogen society" by embracing the fuel across all sectors, Japan was the first nation to develop a national hydrogen strategy in 2017.
The nation is developing long-term supply agreements to import hydrogen from abroad because it lacks the natural resources required to deploy adequate levels of wind or solar to generate clean hydrogen at scale.
In addition to $670 million in government funding for hydrogen and fuel cell technologies in 2020, policymakers have set mobility goals of 900 hydrogen refuelling stations and 800,000 FCEVs by 2030.
Clean hydrogen was praised as a major engine of economic growth and job creation in South Korea's 2019 hydrogen roadmap. The country's goal is to lead the world in developing and utilising FCEVs and large-scale stationary fuel cells for the production of hydrogen power.
A bold goal outlined in its Green New Deal is the deployment of 200,000 FCEVs by 2025 or about 20 times as many as in 2020. The Economic Promotion and Safety Control of Hydrogen Act, the first law in the world to support hydrogen-powered cars, charging stations, and fuel cells, was also passed by South Korea last year.
According to plans, hydrogen will meet 10% of the country's cities, counties, and towns' energy needs by 2030, increase to 30% by 2040 and then become the nation's main energy source by the middle of the century.
With 13% of the world's demand coming from the US, it is the second-largest producer and consumer of hydrogen after China. For more than ten years, states like California supported the growth of the FCEV market in the nation with programmes like the Clean Vehicle Rebate Programme. Up until 2020, the US held the global leader in this area.
The Infrastructure Investment and Jobs Act of 2021, which was enacted by the government, included a $9.5 billion budget to support the development of clean hydrogen. The government's Hydrogen Earthshot programme, with its alleged "111 goals" to reduce the cost of clean hydrogen to $1 per kilogramme in a decade, was then introduced.
Emerging as green hydrogen exporters are net energy importers like Chile in South America and nations in Africa like Namibia and Morocco. Countries that export fossil fuels like Australia, Oman, Saudi Arabia, and the United Arab Emirates are looking to clean hydrogen to diversify their economies.
|
Government |
Policy type |
Description |
Status |
|---|---|---|---|
|
California |
Mandate |
By 2035, all vehicles sold in the state must be zero-emission vehicles, according to an executive order issued by the state government. |
In force |
|
China |
Financial rewards |
The FCEV pilot programme rewards groups of cities that deploy more than 1000 FCEVs, meet certain technical requirements, deliver hydrogen for no more than CNY 35/kg (about USD 5/kg), and set up at least 15 operational HRSs. |
In force |
|
Germany |
Auctions |
Ten-year purchase agreements on hydrogen-based products will be made available through the government's H2 Global programme, giving investors’ confidence in the viability of the project. |
In force |
|
Norway |
Public procurement requirement |
The largest ferry connection in the nation will use hydrogen fuel, according to the government. |
In force |
|
Switzerland |
Tax |
The nation implemented the LSVA road tax, which assesses trucks over 3.5 tonnes in weight but exempts ZEVs from paying. |
In force |
|
European Union |
Quota |
The European Commission has suggested amending the Renewable Energy Directive as part of Fit for 55 to require 50% renewable hydrogen consumption in the industry by 2030. |
Proposed |
|
European Union |
Quota |
The European Commission suggested a rising quota for synthetic aviation fuels in the ReFuel Aviation Initiative (from a 0.7% share in 2030 to 28% in 2050). |
Proposed |
|
Germany |
Carbon contracts for difference |
A new Carbon Contracts for Difference (CCfD) pilot programme for the steel and chemical industries was announced by the National Hydrogen Strategy. It will cover the discrepancy between a project's CO2 abatement expenses and the EU ETS CO2 price. Companies will be required to pay the government the difference if the EU ETS price is greater than the project's CO2 abatement costs. |
Proposed |
|
India |
Quota |
The government declared that starting in 2023–2024, 10% of the hydrogen needed for refineries—which will rise to 25% over the next five years—and 5% of the hydrogen needed for fertiliser production—will both be satisfied by renewable sources. |
Proposed |
|
Portugal |
Quota |
By 2030, the National Hydrogen Strategy intends to blend 10-15 vol% hydrogen into natural gas. |
Proposed |
Create incentives to replace unabated fossil fuels with low-carbon hydrogen.
Develop strategies and roadmaps for hydrogen's role in energy systems.
Encourage investment in manufacturing, infrastructure, and factories.
To ensure that crucial technologies are quickly commercialised, strongly encourage innovation.
Create effective certification, standardisation, and regulatory regimes
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