Hydrogen Investment Pipeline Grows To $500 Billion In Response To Government Commitments To Deep Decarbonisation

  • 359 large-scale projects announced globally, up 131 in first half of 2021
  • Europe is leading with investments of $130bn, but other regions are catching up
  • China emerges as potential hydrogen giant with 50+ projects, following announcement of net-zero emissions by 2060

Brussels, 15 July 2021 – With accelerated climate ambitions, momentum in hydrogen deployment has been boosted as a key energy transition pillar, according to the latest Hydrogen Insights Updates from the Hydrogen Council in collaboration with McKinsey & Company. Globally, 131 large-scale projects have been announced since February 2021, taking the total to 359 projects. The total investment into projects and along the whole value chain amounts to an estimated $500 billion through 2030.

Of the total investment, $150 billion, or 30%, can be considered “mature” – meaning that the investment is either in a planning stage, has passed a final investment decision, or is associated with a project that is already under construction, commissioned, or currently operational. With these total investments, low-carbon hydrogen production capacity will exceed 10 million tons p.a. by 2030, an increase of over 60% on February reported project level. Seventy percent of the production capacity will come from renewable energy sources, while the other 30% is low-carbon hydrogen generated by fossil fuels and carbon capture and storage (CCS).

This increase in activity comes on the heel of stricter carbon targets globally. Ninety countries, representing 80% of the world’s GDP, are now committed to Net Zero targets. More than 30 countries have concrete hydrogen strategies and have allocated $76 billion of government funding. Europe remains the centre of hydrogen development, accounting for more than 50% of announced projects and estimated investments of $130 billion. However, all other regions grew faster proportionally with over 75% increase. Furthermore, trade flows between supply and demand centres are starting to arise.

China is emerging as a hydrogen powerhouse, expecting hydrogen to comprise 10% of the energy share by 2050 to reach its ambitious climate targets: Net zero by 2060 and “peak carbon” in key sectors by 2030. Fifty-three large-scale projects have been publicly announced in China, and investments worth $17 billion can be considered mature. The Chinese government has made $20 billion of public funding available to hydrogen projects. Fifty percent of China’s announced projects are linked to transport applications, a key sector in its energy transition plan.

“The momentum is now global. It is clear that hydrogen has become a central element of investment plans announced by many countries towards carbon neutrality.  While Europe remains a strong contributor, with 80% of new announced projects, other regions are stepping up, with an impressive number of hydrogen projects currently in the pipeline around the world”, said Benoît Potier, Chairman and CEO of Air Liquide and Co-chair of the Hydrogen Council. “We are pleased to share this positive outlook and the Hydrogen Council will keep working closely with industrial partners, policymakers and the investment community to contribute to a clean energy future”.

“The U.S. has renewed its’ net zero commitment by re-entering the Paris Agreement and aims to reduce emissions 50% by 2030 to match the European Union. With this, 80% of the world’s GDP is now located in countries that have a net-zero ambition, up from 50% at the beginning of 2021. This is another turning point for hydrogen, the energy transition, and a clean energy future,” said Tom Linebarger, Chairman and CEO of Cummins and Co-chair of the Hydrogen Council.

“We’re seeing unprecedented commitment to tackle climate change, from the U.S. to Europe to Asia. Governments and industry around the world are coming together around the need to scale up clean technologies fast and hydrogen’s critical role as the catalyst for our clean energy transition has been solidified. Large-scale clean hydrogen projects, amounting to about a third of total hydrogen demand growth expected in the next decade, are materialising in response to the many calls for bold action to address climate change,” said Daryl Wilson, Executive Director of the Hydrogen Council. “We can use hydrogen to turn clean energy goals and promises into clean energy reality.”

 “The scale up of hydrogen continues to accelerate: investments in projects at a ‘mature’ stage have nearly doubled to $150 billion since February, and announced production capacity has increased by 60% to 11 million tons. Investments are increasing by roughly $1 billion every week. Most active areas are Europe, South America and the Middle East, with the US increasing in momentum and China setting very ambitious targets.” said Bernd Heid, Senior Partner at McKinsey & Company.

Launched in early 2021, Hydrogen Insights is a paid subscription-based product by the Hydrogen Council in collaboration with McKinsey & Company that provides granular insights and data and detailed analysis on hydrogen investment momentum, market development, and cost competitiveness. The service is available for non-members of the Hydrogen Council. More information here.

-ENDS-

About the Report:

This report was authored by the Hydrogen Council in collaboration with McKinsey & Company. It aims to provide the latest outlook on the hydrogen deployment around the world and help guide regulatory and investment decision-making to scale up hydrogen ecosystem. The updated data in the report is built on the Hydrogen Insights 2021 report by the Hydrogen Council and McKinsey & Company. See Executive Summary here.

About the Hydrogen Council:

The Hydrogen Council is a global CEO-led initiative that brings together leading companies with a united vision and long-term ambition for hydrogen to foster the clean energy transition. The Council believes that hydrogen has a key role to play in reaching our global decarbonisation goals by helping to diversify energy sources worldwide, foster business and technological innovation as drivers for long-term economic growth, and decarbonise hard-to-abate sectors. Using its global reach to promote collaboration between governments, industry and investors, the Council provides guidance on accelerating the deployment of hydrogen solutions around the world. It also acts as a business marketplace, bringing together a diverse group of 120+ companies based in 20+ countries and across the entire hydrogen value chain, including large multinationals, innovative SMEs, and investors. The Hydrogen Council also serves as a resource for safety standards and an interlocutor for the investment community, while identifying opportunities for regulatory advocacy in key geographies. To find out more visit www.hydrogencouncil.com and follow us on Twitter @HydrogenCouncil and LinkedIn.

Hydrogen Council Press Office (FTI Consulting):

Ciel Jolley, +32 2 289 09 30 – Ciel.Jolley@fticonsulting.com (EU)

Evelyne Bauer, +32 477 56 26 15 – Evelyne.Bauer@fticonsulting.com (EU)

Lilya Nguyen, +1 202 346 8865 – Lilya.Nguyen@fticonsulting.com (U.S.)

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