{"id":14520,"date":"2025-03-11T01:18:46","date_gmt":"2025-03-11T00:18:46","guid":{"rendered":"https:\/\/hydrogencouncil.com\/?p=14520"},"modified":"2025-03-12T13:03:50","modified_gmt":"2025-03-12T12:03:50","slug":"hydrogen-closing-the-cost-gap","status":"publish","type":"post","link":"https:\/\/hydrogencouncil.com\/en\/hydrogen-closing-the-cost-gap\/","title":{"rendered":"Hydrogen: Closing the cost gap"},"content":{"rendered":"\t\t
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Executive Summary<\/h3>\n

 <\/h5>\n
Framework and Approach<\/strong><\/h5>\n

Demand for clean hydrogen and its derivatives has taken center stage for decision-makers in industry and government over the past years, where a focus has been on project bankability and catalyzing supply chain development.<\/p>\n

The lack of demand-side visibility, rising energy and material costs, and prolonged regulatory uncertainty have been key factors inhibiting investment in the sector, in some cases leading to project delays and cancellations. At the same time, some regions have begun implementing measures that could support the business case for clean hydrogen adoption. While the regulatory landscape is still evolving, this report looks at the current policy landscape and its resulting impact on the uptake of clean hydrogen.<\/p>\n

Actual uptake by 2030 is still contingent on the timing and effectiveness of implementing these policy mechanisms and is therefore subject to change. This analysis considers the feasibility of serving existing and new sub-segments of hydrogen demand with clean hydrogen by 2030 in the EU, East Asia, and the US. These regions were selected due to the prominence and the early momentum of clean hydrogen policy initiatives and infrastructure development effective as of January 1, 2025. <\/p>\n

Based on the potential total demand for hydrogen in these regions across all pathways, we categorize the millions of tons per annum (Mt p.a.) of demand into three segments, considering both the relative cost gap between clean hydrogen or its derivatives and conventional alternatives, as well as the extent of additional infrastructure needed for clean molecule deployment.<\/p>\n

The following page presents details of these three segments which can be considered in ascending order of the effort necessary to serve the underlying sub-segments with clean hydrogen.<\/p>\n

<\/p>\n

Key messages<\/strong><\/h5>\n

In a <2\u00baC warming scenario, ~34 Mt p.a. of total demand for hydrogen and derivatives could materialize across the EU, East Asia, and the US by 2030, of which ~8 Mt p.a. could already carry a policy-supported business case for clean hydrogen.<\/p>\n

Around 75% is concentrated in established use cases (e.g., refining, ammonia), while initial adoption in new sectors (e.g. maritime and aviation) makes up the remaining 25%.<\/p>\n

Decarbonizing the full volume would equate to ~250 MtCO2e in annual abatement, equaling a quarter of Japan\u2019s total annual emissions or the total annual carbon footprint of Spain. <\/p>\n

Three pockets of demand could be unlocked with varying policy and infrastructure advancement covering energy-intensive sectors (refining, chemicals, power generation) and transport (trucking, aviation, maritime) across these regions.<\/p>\n

<\/p>\n

Closing the cost gap for clean hydrogen: key actions<\/h3>\n

<\/p>\n

The following key measures could be critical to unlocking this demand and bridging the cost gap with conventional alternatives:<\/p>\n

(i) effective implementation of existing policy measures in the EU, US, Japan and South Korea;<\/p>\n

(ii) expansion of midstream infrastructure to enable low-carbon supply for existing use cases; <\/p>\n

(iii) net-new infrastructure deployment combined with measures to address the cost gap with higher-emission alternatives for new end uses. <\/p>\n

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View and download the full report<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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Read the press release<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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The Hydrogen: Closing the Cost Gap report, developed with the analytical support of McKinsey & Co, highlights that, despite a challenging environment for clean hydrogen, the effective implementation of existing policies could support uptake of ~8 Mt p.a. of clean hydrogen across the European Union, the United States and East Asia by 2030.<\/p>\n","protected":false},"author":9,"featured_media":14669,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[131,132,133,125,121,123,122,134,116,124,156,75,118,157,135,136,117,130,115,137,114],"tags":[146],"class_list":["post-14520","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-africa-region-intelligence","category-asia-pacific-region-intelligence","category-central-south-america-region-intelligence","category-cost","category-decarbonization-subject-matter-intelligence","category-electrolyzes","category-energy-transition-subject-matter-intelligence","category-europe-region-intelligence","category-format-intelligence","category-fuel-cells-subject-matter-intelligence","category-industry-subject-matter-intelligence","category-intelligence","category-investment-subject-matter-intelligence","category-market-overview-subject-matter-intelligence","category-middle-east-region-intelligence","category-north-america-region-intelligence","category-policy-subject-matter-intelligence","category-production-subject-matter-intelligence","category-region-intelligence","category-report-format-intelligence","category-subject-matter-intelligence","tag-report"],"acf":[],"yoast_head":"\nHydrogen: 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