Operational clean hydrogen production projects set to double globally within the next five years

Pillsbury’s Hydrogen Map ­– the first interactive global tracker of hydrogen projects – has found that, alongside strong projected growth, the number of global zero and low-carbon hydrogen production projects has grown significantly, with 94 projects already producing hydrogen. Since 2021, when Pillsbury first published its hydrogen map, the number of tracked production projects at any stage of development has increased by almost 50%.

According to the research, Europe is leading the charge in the development of clean hydrogen, with Germany home to 25 of the total already operational projects (equal to 27%); the US. home to 7 (7%); the UK home to 7 (7%); and Japan home to 7 (7%).

Key findings include:

• Globally, 326 clean hydrogen production projects have been announced and are at various stages of development. This includes 310 green hydrogen projects and 16 blue hydrogen projects.
• Of the 108 projects set to start producing hydrogen in the next 5 years, Europe is leading the charge with 64 new projects set to come online; Asia: 18, Australasia: 14, and North America: 10, with 1 project for each South America and Africa.
• In terms of GW electricity produced from hydrogen energy in the next 5 years, Australia is front of the pack with almost 28 GW due to come online. The Netherlands comes in second with nearly 7 GW; Ireland nearly 4 GW; and China and Spain with 2 GW each.

The recent growth in hydrogen projects follows significant efforts by governments across the world to promote the hydrogen industry. The EU led the charge globally with its strategy on hydrogen being adopted in 2020. The US followed suit through the introduction of a clean hydrogen production tax credit through the Inflation Reduction Act and a hydrogen hubs programme through the Infrastructure Investment and Jobs Act (IIJA) whilst also introducing its National Clean Hydrogen Strategy and Roadmap. Meanwhile, the UK launched its hydrogen strategy in 2021. Separately, data from Pitchbook reveals that, in 2022, private equity firms spent US$3.1 billion on hydrogen-related companies across 37 deals, while venture firms invested US$2.6 billion in 192 startups.

Pillsbury’s Hydrogen Map divides clean hydrogen production projects into two categories on the basis of production method: blue denoting steam reforming of natural gas with carbon capture; and green denoting hydrogen produced via electrolysis of zero-carbon energy sources, such as renewables and nuclear.

Elina Teplinsky, Pillsbury’s Global Energy Industry Leader, commented: “The EU was the first to roll out measures to support the development of hydrogen, so we’re ultimately seeing the market reap what it sowed. The US has thrown its full weight behind catching up with the EU, so it’s not surprising we’ve seen strong recent growth, something that will likely continue in the years ahead. The hydrogen hubs programme will be a significant moment in the hydrogen race."

Gavin Watson, Partner in Pillsbury’s London office, commented: “It’s two years since the UK unveiled its hydrogen strategy, but we still lack a coherent regulatory framework to give the sector much needed certainty. In its recent report to the UK Parliament, the Climate Change Committee noted that the UK has lost its global leadership position on climate action. It has been slow to react to the US.’ Inflation Reduction Act, as well as the EU’s proposed Green Deal Industrial Plan. Both these initiatives will continue to pull investment away from hydrogen in the UK.

Watson added: "Despite being replete with eloquent assurance of great ambition, good intention, and commitment to work with industry and consult stakeholders, the 'Hydrogen Strategy Update' issued by the Department for Energy Security & Net Zero this month does little to suggest the UK will be a front-runner in the global pursuit of a hydrogen economy. In March 2023, it was announced that 15 applicants would share £37.9 million under the UK’s first hydrogen funding support. The announcement is embarrassingly unambitious especially after Germany announced it would spend over US$20 billion to develop its hydrogen industry between 2024 to 2027 – with over US$4 billion allocated for next year alone. Unless things change, which doesn’t look likely in the immediate term given the divided political landscape, the UK will continue dropping down the pecking order, and possibly quite quickly."

Read the article online at: https://www.globalhydrogenreview.com/hydrogen/25102023/operational-clean-hydrogen-production-projects-set-to-double-globally-within-the-next-five-years/