Clean hydrogen will be responsible for 10% of the world’s emissions reductions by 2030, if the world is to meet its obligations under the Paris Agreement, which aims to limit global warming 10 1.5 degrees Celsius this century, according to the International Renewable Energy Agency.
That’s 3.7 gigatonnes per year of carbon dioxide that won’t be released into the atmosphere if clean hydrogen can be produced in sufficient quantities to decarbonise industries from steel manufacturing and transport to chemicals production and construction.
The ramp up in clean hydrogen production will need to be unprecedented: from close to zero currently to 154 million tonnes per year by 2030 and 614 million tonnes per year by 2050, according to IRENA. Electrolyser capacity, to split water into hydrogen and oxygen with renewable energy, will need to reach 350 GW by 2030.
None of that is going to happen without serious levels of investment. IRENA estimates that about 3% of the $3 trillion a year that needs to be invested in the energy system by 2030 will need to be funnelled into hydrogen. That’s about $90 billion a year or $810 billion in total.
Currently, the public and private sector are falling a long way short. According to the International Energy Agency, as of mid-2021, governments had committed £37 billion and the private sector had announced $300 billion.
While those numbers don’t account for the considerable announcements we’ve seen over the past 12 months, including more than £500 million of support from the UK government, it’s clear there is still a long way to go if clean hydrogen is to be allowed to fulfil its significant role in meeting the Paris Agreement targets.
If we take the IEA’s estimates of what is needed in terms of investment, the number is even higher: $1.2 trillion through 2030.
A crucial factor in meeting these targets is getting the cost of hydrogen production and transport to “well below” $1 per kg, IRENA said in its report.
At this early stage in the development of the hydrogen economy, investment is needed in technology as much as infrastructure. All elements of the supply chain from production to transportation and storage are maturing rapidly, while potential use cases continue to expand.
IRENA sees the global hydrogen trade being responsible for meeting a quarter of global energy demand by 2050, around half of which will be via pipelines and half via ammonia shipping. About 70% of the ammonia will be used as feedstock and fuel with the rest reconverted to hydrogen.
We know what needs to be done. Let’s go out and do it.
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