New hydrogen projects achieve record numbers globally with even greater urgency for final investment decisions to attain net zero

  • Hydrogen Council releases its state of the industry report, Hydrogen Insights 2022, on the hydrogen imperative for the global energy transition
  • 680 large-scale projects announced globally reflecting investments of US$ 240 billion until 2030, an increase of 50% since November 2021
  • US$22 billion, or 10% of proposed investments, have reached FID, are under construction, or are already operational
  • Real deployment of hydrogen is growing (e.g. 80% increase in installed electrolyzers), and must continue to scale
  • Investment proposals must triple to US$700 billion until 2030 in order to achieve the global 2050 net zero target
  • Both policymakers and industry need to step up to deliver on hydrogen net-zero

BRUSSELS, September 20, 2022The urgency to ramp up investment in industrial-scale hydrogen energy projects is greater than ever, says a new report published today by the Hydrogen Council.

Developed in collaboration with global consultancy McKinsey & Company, the report, Hydrogen Insights 2022, highlights 680 large-scale* hydrogen project proposals have been announced, totaling US$240 billion in direct investment between now and 2030 – an increase of 50% since November 2021 alone.

With this substantial uptake in hydrogen energy project announcements, the next step by industry, investors and governments is to quickly ramp up final investment decisions (FIDs) in order to jump start project construction and operations as quickly as possible.

Yoshinori Kanehana, Chairman of Kawasaki Heavy Industries, Ltd. and Co-Chair of the Hydrogen Council, said, “With the growing concerns around energy security, it is clear our economies need hydrogen. But on-the-ground deployment is not moving fast enough and needs to accelerate to realize the benefits of hydrogen. This report proposes a series of priority actions for both policymakers and industry to overcome the challenges and accelerate large-scale hydrogen deployment.

“In addition, the report helps us understand the current state of the global hydrogen economy by highlighting what’s really happening in terms of deployment, financing and investment, as well as offering predictions for the future.”

Tom Linebarger, Executive Chairman and Chairman of the Board of Cummins Inc. and Co-Chair of the Hydrogen Council, said of the report, “Climate change is the existential crisis of our time, and it will require businesses and governments working together to address it and we must do more now. To move to a zero emissions future, we must have multiple solutions available for our customers who require vastly different applications around the world and hydrogen will play a critically important role.”

Capturing the maximum climate value of hydrogen to deliver the 2050 net zero carbon emissions target requires a tripling of investments in hydrogen projects by 2030 to US$700 billion, equivalent to an additional US$460 billion, the report explains.

The Council report goes on to note that the 2030 hydrogen investment figure is equivalent to less than 15% of investment committed to upstream oil and gas over the past decade.

To meet the planet’s commitment to positively impact climate change, the study makes clear that a rapid increase in hydrogen project investment and on-the-ground deployment is required.

Joint action by the public and private sectors is urgently needed to move from project proposals to FIDs.

Hydrogen Insights 2022 sets out mutually reinforcing priority actions both for policymakers and for industry across 2022 to 2023.

The full 2022 report is available here.

Notes to Editors
* ‘Large-scale’ is defined as projects larger than 1 MW of electrolysis or equivalent.

About the Report
Authored by the Hydrogen Council with McKinsey and Company, Hydrogen Insights 2022 provides the latest fact-based outlook on hydrogen deployment around the world, with the objective to guide regulatory and investment decision-making to scale up the hydrogen energy ecosystem.

The updated data in the report is built on the Hydrogen Insights 2021 report by the Hydrogen Council and McKinsey & Company.

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 understands that hydrogen has a key role to play in reaching global decarbonization goals by helping to diversify energy sources worldwide, to foster business and technological innovation as drivers for long-term economic growth, and to decarbonize especially hard-to-abate industrial sectors.

To find out more visit www.hydrogencouncil.com and folow us on Twitter @HydrogenCouncil and LinkedIn

Media Enquiries
Joanna Sampson, Communications Manager
joanna.sampson@hydrogencouncil.com

Hydrogen Insights 2022

Authored by the Hydrogen Council in collaboration with McKinsey and Company, Hydrogen Insights 2022 presents an updated perspective on hydrogen market development and actions required to unlock hydrogen at scale.

The pipeline of hydrogen projects is continuing to grow, but actual deployment is lagging.

680 large-scale project proposals worth USD 240 billion have been put forward, but only about 10% (USD 22 billion) have reached final investment decision (FID). While Europe leads in proposed investments (~30%), China is slightly ahead on actual deployment of electrolyzers (200 MW), while Japan and South Korea are leading in fuel cells (more than half of the world’s 11 GW manufacturing capacity).

The urgency to invest in mature hydrogen projects today is greater than ever.

For the world to be on track for net zero emissions by 2050, investments of some USD 700 billion in hydrogen are needed through 2030 – only 3% of this capital is committed today. Ambition and proposals by themselves do not translate into positive impact on climate change; investments and implementation on the ground is needed.

Joint action by the public and private sectors is urgently required to move from project proposals to FIDs.

Both governments and industry need to act to implement immediate actions for 2022 to 2023 – policymakers need to enable demand visibility, roll out funding support, and ensure international coordination; industry needs to increase supply chain capability and capacity, advance projects towards final investment decision (FID), and develop infrastructure for cross-border trade.

View and download the full report here.
Read the press release here.

Want to have the most up-to-date hydrogen market data and insights?
This report is accompanied by Hydrogen Insights, a paid subscription-based platform that will provide a regularly updated, global perspective on hydrogen investment momentum, market development, and cost competitiveness. The paid service is available for non-members of the Hydrogen Council. To subscribe and for more information, contact the Secretariat – secretariat@hydrogencouncil.com.

Fitfor55 – fit for purpose?

This article was first published in H2 View.

By Daria Nochevnik, Director of Policy and Partnerships, Hydrogen Council.

The RePowerEU plan published on May 18, following the European Commission communication of March 8, reinforces Europe’s commitment to rapidly reducing, and ultimately getting rid of, its dependence on Russian fossil fuels.

As part of the plan, alongside a suite of measures to diversify gas supplies in the short-to-medium term, as well as to remove bottlenecks around licensing and permitting for renewables, the commission laid out its vision for a Hydrogen Accelerator. The key target under the accelerator initiative is to use 20 million tonnes (mt) of renewable hydrogen in the EU by 2030, out of which 10 mt are to be produced within Europe and another 10 mt imported from third countries.

According to commission estimates, using 20 mt of renewable hydrogen in the EU in 2030 would displace up to 50 bcm – or up to a quarter –  of Russian natural gas imports.

In the words of the European Commission President Ursula von der Leyen, “The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system1.”

The renewable power and hydrogen ambition set out in the RePowerEU plan is strong but how much system thinking is there across the underlying legislative measures? And are these underlying measures fit for purpose to unlock Europe’s hydrogen and renewable power potential?

Policymakers in Europe have been doing their utmost to respond to the immediate threat to the EU’s energy security. Yet making sure that short-term measures do not create inefficient outcomes in the longer run is a challenge.

By now, nearly everyone in the hydrogen world has heard of the concepts of additionality, geographical and temporal correlation set out in the proposed EU rules for qualifying hydrogen production as renewable for the purposes of compliance with the future EU-wide renewable hydrogen consumption targets2. At the same time, many have been struggling to figure out how exactly these qualifications will be applied in practice, both for renewable hydrogen produced in Europe and that imported from third countries.

For example, electrolysers connected to the grid would need to evidence that they are powered by unsubsidised renewable electricity and demonstrate the matching of renewable electricity with renewable hydrogen production on an hourly basis (otherwise the hydrogen produced would not be considered as renewable). 

Aside from the fact that hourly GOs exist in very few countries in Europe and globally, the stringent requirements placed on electrolysers beg the question: why is the role of hydrogen in enabling indirect electrification restricted?

Direct vs indirect electrification – why should we have ‘either/or’ and not both?

Imagine you purchase an electric car and to receive a tax benefit you need to qualify your rides as ‘renewables-based’ and evidence on an hourly basis that you are charging your electric vehicle with strictly renewable electricity. Side note: in 2021, power sector emissions in Germany were estimated at 349g CO₂/KWh of electricity generated3.

Following a similar logic, large data centres would have to be built strictly in countries whether the grid mix is already nearly fully renewable (there are only three in Europe – Sweden, Austria and Norway). Side note: data transmission networks consumed 260-340 TWh in 2023, or 1.1‑1.4% of global electricity use4.

Some suggest that direct electrification should be the priority, regardless from whether/the extent to which the electricity used is renewable, as renewable electricity capacity will increase. Yet this perspective neglects the complementary role of indirect electrification that can be achieved thanks to hydrogen deployment. Renewable hydrogen allows integrating greater renewable energy capacity in the system while:

  • Helping alleviate grid constraints (in Germany alone nearly €1bn of taxpayers’ funding was spent last year on curtailed renewable power)
  • Offering flexibility to the power grid
  • Allowing to make use of existing infrastructure endowments (repurposing gas pipelines for hydrogen use) to transport large volumes of renewable energy over long distances in a cost-effective manner
  • Enabling energy consumers for whom direct electrification is not a viable option (heavy industry) to decarbonise.

To get the chance to succeed in our race against climate change, we need both solutions – direct and indirect electrification – as they are complementary to each other.

Having a preference for one over the other is a policy choice and a way to pick winners. Yet there are no one-size-fits-all solutions for all geographies and end-users, and there will ultimately be no winners if we don’t deliver on
our climate commitments fast enough. 

Will renewable hydrogen have a future in Europe? 

The concept of additionality in itself is integral to hydrogen deployment. The ramp up of renewable hydrogen goes hand in hand with the development of new/additional renewable electricity capacity in Europe and globally.

However, the way in which it is proposed to apply additionality to renewable hydrogen in combination with geographical and temporal correlation puts in question the future of renewable hydrogen in Europe, let alone Europe’s ability to achieve the targets laid out in the Hydrogen Accelerator initiative. 

The conclusions from modelling the application of these criteria to some of the real-life project proposals are despairing. Not only would the cost of renewable hydrogen double (or in some cases, more than double), the load factors of electrolysers would be prohibitively low – in other words, the business case for electrolysers will be de facto jeopardised.

What about renewable hydrogen imported from third countries? Prospective exporters struggle to see how they could meet the required qualifications specific to the EU energy market design. The proposed rules fail to recognise the differences in energy market design and market infrastructure endowments in third countries, from which renewable hydrogen may be imported (where power pricing is not zonal, for example). In addition, one should consider that market infrastructure is at different stages of maturity across the prospective exporting countries, including those in North Africa (the first PPA was signed in Egypt only in 2020).

Another major barrier for prospective exporters of renewable hydrogen and derived products is indeed the requirement to have renewable hydrogen subject to ‘effective carbon pricing’. Let us not forget that the EU cap and trade system (EU ETS) had teething issues. While it was set up in 2005, one may argue that it really started delivering only towards the end of the last decade – it took it more than 15 years. While a number of jurisdictions outside the EU are looking at introducing cap-and-trade systems/carbon taxes, the adoption of these instruments is a lengthy legislative process.

The above requirement would preclude imports of renewable hydrogen or derived products from third countries with abundant renewable power resources due to the absence of carbon pricing in their respective jurisdictions.

Watershed moment for the EU energy system

The EU still has the chance to review renewable hydrogen qualifications and make them fit for purpose. A pragmatic approach embracing both direct electrification through renewable power and indirect electrification through hydrogen can be a true game-changer for Europe.

The RePowerEU plan offers Europe a unique opportunity to unlock its renewable electricity and hydrogen potential and reap decarbonisation, energy security, cost-efficiency and resilience benefits, and ultimately – to master its energy system. Will Europe take it?

References

  1. European Commission President Ursula von der Leyen’s address at the press conference on the RePowerEU communication, 08 March 2022
  2. The Delegated Acts on Renewable Fuels of Non-Biological Origin (RFNBO) that were due to be developed by 31 December 2021 as per Art. 27(3) and Art. 28 (5) setting out the methodology for qualifying electricity used for RFNBO production as renewable and the methodology for assessing the GHG emissions savings from RFNBO respectively
  3. https://www.statista.com/statistics/1290224/carbon-intensity-power-sector-germany/ 
  4. https://www.iea.org/reports/data-centres-and-data-transmission-networks

Seven New Members Join The Hydrogen Council to Advance the Global Clean Energy Transition

  • New members represent companies from across the hydrogen value chain
  • First South American member to join The Hydrogen Council
  • Rapid growth in Council membership highlights urgency for collective global action

Brussels, June 13, 2022The Hydrogen Council, the global CEO-led organisation, announced today the addition of seven new members:  Adani Group, Alfa Laval, Bloom Energy, CK Infrastructure, Ecopetrol, Gasunie and InterContinental Energy.  The Council’s members embrace a shared vision for hydrogen to advance the global clean energy transition for a more sustainable and resilient energy future.

Launched by 13 founding members in 2017, in just five years the Hydrogen Council has grown to 141 members from over 20 countries around the world, representing a wide range of sectors along the entire hydrogen value chain.

This fast acceleration in membership mirrors the unprecedented momentum being witnessed for clean hydrogen. There is no climate solution without hydrogen; it is the missing piece of the clean energy puzzle – a critical catalyst for our clean energy transition.

The Hydrogen Council’s latest members include:

  • Two new steering members – Colombia’s Ecopetrol, one of the leading integrated energy groups in the Americas, and InterContinental Energy, leading dedicated green fuels company.
  • Five new supporting members – Indian multinational conglomerate Adani Group; Sweden’s Alfa Laval, a leading global supplier of products and solutions for heat transfer, separation and fluid handling; California-based clean energy technology company Bloom Energy; global infrastructure company CK Infrastructure Holdings Limited;and Dutch energy infrastructure firm Gasunie.

Alfa Laval is the Hydrogen Council’s first Swedish member and Ecopetrol the first South American member.

The ethos of these six new members aligns with the Hydrogen Council’s vision for hydrogen to foster the clean energy transition for a better, more sustainable, and more resilient energy future.

Welcoming the new members and their contributions to the Hydrogen Council’s vision, Tom Linebarger, Chairman and CEO of Cummins Inc., and Co-Chair of the Hydrogen Council, said: “The Hydrogen Council’s strength comes from the engagement of our diverse leaders. Diversity of region, application, technology, language and culture brings multi-dimensional perspectives to a sustainable energy transition. At the conclusion of our recent Council meeting, we agreed on the importance of addressing climate change collaboratively and ahead of individual interests, which we believe will benefit all of our stakeholders.”

Yoshinori Kanehana, Chairman of Kawasaki Heavy Industries, Ltd., and Co-Chair of the Hydrogen Council, added: “Our latest members span the globe with their activity illustrating the critical role that hydrogen will play in the flow of decarbonised energy around the world. Hydrogen is already opening up new trading relationships and opportunities for development. The Council has a strong interest in the realisation of the international sustainable development goals in both exporting and importing partners in this new world of trade.”

What does joining the Hydrogen Council mean to these seven new members?

Felipe Bayón, CEO of Ecopetrol, commented: “Joining the Hydrogen Council means a great opportunity for Ecopetrol to accelerate our low-carbon hydrogen plan, as part of our Strategy 2040 ‘Energy that transforms’, and contribute to Colombia’s Hydrogen Roadmap.

“We believe that joint efforts, among the members of the Council, will trigger changes in investment patterns, technologies, and behaviours, in pursue of the ambition for hydrogen to foster the clean energy transition for a better, more sustainable, and more resilient energy future.”

Alicia Eastman, President of InterContinental Energy, commented: “InterContinental Energy joined the Hydrogen Council because we believe clean hydrogen and derivative energy products like clean ammonia are key to decarbonising the most difficult-to-abate sectors. In order to deploy these solutions at scale quickly, the world’s largest suppliers, logistics, infrastructure, investment, and consumer companies need to work together: designing and advocating for common certification and regulatory standards, dovetailing roadmaps and creating an optimised ecosystem to jointly tackle greenhouse gases.”

Vneet Jain, Managing Director and CEO of Adani Green Energy, commented: “Hydrogen is the fuel of the future and key to India’s energy security and to the decarbonisation of its economy. Adani Group is one of the largest renewable energy producers in the world and we believe we are uniquely positioned to lead India’s and the world’s transition to the hydrogen economy.

“Hydrogen Council, as a leading industry body, can play an enabling role in development of the Hydrogen ecosystems across the value chain.”

Tom Erixon, President & CEO of Alfa Laval, commented: “We see the hydrogen economy as an inevitable enabler of a Net Zero 2050 and recognise the importance of accelerating the deployment, scaling and commercialisation of the technologies to make this happen. Working together with the leading stakeholders in the industry and the members of the Hydrogen Council, we are developing solutions that are crucial for taking hydrogen technologies into the commercialisation stage.”

KR Sridhar, founder, Chairman and CEO of Bloom Energy,
commented: “If we don’t take immediate action to substantially reduce emissions, the planet is on track for disastrous temperature increases and climate change. By decarbonising with hydrogen, we can successfully impede and even reverse the adverse effects of the climate crisis.

“I had a mission when I founded Bloom in 2001 to make clean, reliable and affordable energy available for all. Our founding roots are in hydrogen technology, and the flexibility of our solid oxide platform enables organisations, large and small, to both efficiently produce and consume this clean fuel. And the energy industry has only just scratched the surface in terms of projects and applications. In joining the Hydrogen Council, we look forward to building a clean, energy abundant future together.”

Andrew Hunter, Deputy Managing Director of CK Infrastructure (CKI), commented: “CKI is looking forward to working with all members of the Hydrogen Council who are at the forefront of hydrogen use to help accelerate the transition to a carbon neutral world.”

Han Fennema, CEO of Gasunie, commented: “Gasunie strongly believes in the role of hydrogen in a sustainable energy system. That’s why we have joined the Hydrogen Council. In the coming years, we will be developing the national hydrogen network in The Netherlands. We are also working on hydrogen infrastructure development in Germany. This way, we will enable industries all across the Netherlands and Germany to become more sustainable.”

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 140+ companies based in 20+ countries 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

For questions, please contact:
Joanna Sampson, Communications Manager, Hydrogen Council.
joanna.sampson@hydrogencouncil.com

###

Background on the Hydrogen Council’s new members

Steering Members

Ecopetrol: Ecopetrol is the largest company in Colombia and one of the leading integrated energy groups in the Americas, with presence in over nine countries, including the U.S. Its operations in the hydrocarbons value chain comprise the upstream, midstream, downstream and gas distribution segments. In 2021, Ecopetrol acquired a majority stake in Interconexión Eléctrica S.A. (ISA), the leading energy transmission company in Latin America that also participates in the management of real-time systems and toll roads. As part of its technology, environmental, social and governance agenda (TESG), the company is leading initiatives in decarbonization, renewables, water management, hydrogen, natural climate solutions and innovation.

InterContinental Energy: InterContinental Energy is one of the world’s largest green fuels companies with four integrated green hydrogen and green ammonia projects totalling upstream wind and solar of 200GW in Western Australia, Oman, and Saudi Arabia. ICE focuses on the triple bottom line, which includes financial viability as well as sustainable positive outcomes for the environment and society. 

Supporting Members

Adani Group: Adani Group, headquartered in Ahmedabad, is India’s fastest-growing portfolio of diversified businesses with presence in Transportation and Logistics (seaports, airports, logistics, shipping, road and rail), Resources, Power Generation and Distribution, Renewable Energy, Gas Infrastructure, Agribusiness (commodities, edible oil, food products, cold storage and grain silos), Real Estate, Cement, and Defence and Aerospace.

Adani Group owes its success and leadership position to its core purpose of “Nation Building” – a guiding principle for enabling India’s economic growth which is essential to improving the quality of life of its people. The Group is committed to protecting the environment and improving communities through its CSR programs based on the principles of sustainability, diversity and shared values.

Alfa Laval: Alfa Laval is a world leader in heat transfer, centrifugal separation and fluid handling, and is active in the areas of energy, marine, and food & water, offering its expertise, products, and service to a wide range of industries in some 100 countries. The company is committed to optimising processes, creating responsible growth, and driving progress to support customers in achieving their business goals and sustainability targets.

Alfa Laval’s innovative technologies are dedicated to purifying, refining, and reusing materials, promoting more responsible use of natural resources. They contribute to improved energy efficiency and heat recovery, better water treatment, and reduced emissions. Thereby, Alfa Laval is not only accelerating success for its customers, but also for people and the planet. Making the world better, every day.

Bloom Energy: Bloom Energy empowers businesses and communities to responsibly take charge of their energy. The company’s leading solid oxide platform for distributed generation of electricity and hydrogen is changing the future of energy. Fortune 100 companies around the world turn to Bloom Energy as a trusted partner to deliver lower carbon energy today and a net-zero future.

CK Infrastructure Holdings Limited: CK Infrastructure (CKI) is a global infrastructure company that has diversified investments in energy, transportation, water, waste and other infrastructure related businesses. Through Northern Gas Networks (NGN) in the UK and Australian Gas Infrastructure Group (AGIG), CKI are a major player in natural gas and a pioneer in hydrogen.

NGN is leading the development of hydrogen deployment in the UK’s existing gas network.  As well as supplying a 20% hydrogen blend to homes in the village of Winlaton near Gateshead as part of its HyDeploy demonstration project, NGN is progressing proposals to develop the UK’s first hydrogen village following approvals from UK Government and Great Britain’s energy regulator, Ofgem. The plans would see NGN bring clean burning hydrogen to around 2,000 homes and businesses in the North East of England with green hydrogen produced locally from renewable sources in Teesside.

In Australia, we are developing various projects across the country to demonstrate the approach to policy makers and help drive down costs. In May 2021, AGIG’s Hydrogen Park South Australia project started producing green hydrogen through a 1.45MW electrolyser and blending with natural gas to supply +700 homes.

Gasunie: Gasunie is a European energy-infrastructure company. Gasunie’s network is one of the largest high-pressure pipeline networks in Europe, comprising over 17,000km of pipeline in the Netherlands and northern Germany.

Gasunie provides natural and green gas transport services through its subsidiaries, Gasunie Transport Services B.V. (GTS) in the Netherlands and Gasunie Deutschland in Germany. With its cross-border gas infrastructure and services, Gasunie facilitates TTF, which has become the leading European gas trading point. Gasunie also provides other gas infrastructure services, including gas storage and LNG.

Gasunie wants to help accelerate the transition to a CO2-neutral energy supply and believes that gas-related innovations, for instance in the form of renewable gases such as hydrogen and green gas, can make an important contribution. Both existing and new gas infrastructure play a key role here. Gasunie also plays an active part in the development of other energy infrastructure to support the energy transition.