clean hydrogen market
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The lack of infrastructure for hydrogen production, storage and transportation has been identified as the greatest challenge to market expansion, in a survey conducted by engineering firm DNV.

The results of the survey have been released in a report, Rising to the Challenge of a Hydrogen Economy. Of the 1,100 senior executives surveyed, 78% say repurposing existing infrastructure would help accelerate the development of a hydrogen-based economy and fast-forward the energy transition.

When asked about the role hydrogen can play in enabling the energy transition, 84% of the executives says hydrogen has the potential to be a major component of a global, low-carbon, energy system, while three quarters (73%) say Paris Agreement targets will not be possible without a large-scale hydrogen economy.

The importance of hydrogen in the decarbonisation of the global economy is evidenced by an increase in project deployments over the past years with hydrogen pledges, plans, and pilots of recent years evolving into concrete commitments, investments and full-scale projects. For example, the recent call by gas industry stakeholders on the European Commission to recognise the role of hydrogen blending in existing networks as a transitional solution of choice.

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When asked about the timelines of their hydrogen commitments, 71% of energy companies say they started becoming involved in the market over the past five years with 55% saying they started to get involved in the past three years. This is why 45% of the companies surveyed have hydrogen accounting for less than 1% of their revenue. However, with the current pace at which companies are making commitments to hydrogen rollout, this is expected to change, with 44% of the energy companies expecting hydrogen to account for more than a tenth of their revenue by 2025 and to 73% by 2030.

Amongst consumers, 33% expect hydrogen to account for over a tenth of their organisation’s energy by 2025, and 57% by 2030.

Taking revenue earners and consumers together, a quarter (26%) of energy professionals expect hydrogen to account for half of their organization’s revenue/spending by 2030.

Energy professionals are aware of the significant challenges involved. Some 71% believe current hydrogen ambitions tend to underestimate the practical limitations and barriers, while 43% believe that the majority of national and organisational hydrogen goals are realistic.

Other key study findings include:

  • Profitable business opportunities are the biggest driver of involvement in hydrogen, while infrastructure and costs are two of the biggest hurdles.
  • The right regulations are deemed to be the most powerful enabler, followed by carbon pricing.
  • Hydrogen safety is only the seventh highest risk among energy professionals.
  • The majority of energy professionals (77%) believe that both blue and green hydrogen need to work in synergy to successfully scale the hydrogen economy.
  • Up to 42% of the executives believe that hydrogen trade will become a fully globalised market, 52% say it will become a regional market

Ditlev Engel, CEO of Energy Systems at DNV, said: “To meet the targets of the Paris Agreement, the world needs to transition faster to a deeply decarbonised energy system. In addition to energy efficiency gains, this will require greater renewable power generation and electrification, and the scaling of technologies to remove the carbon from fossil fuels. Hydrogen will be needed to connect and enable these paths.

“Hydrogen has a new status in 2021 as an important, viable and rapidly developing pillar of the energy transition. Yet ambitions and the rate of change in the hydrogen economy are demanding, and the industry needs to prepare.

“Just a year ago, in DNV’s Heading for Hydrogen research, we said that the challenge for the hydrogen economy is not in the ambition, but in changing the timeline: from hydrogen on the horizon to hydrogen in our homes, businesses, and transport systems. We see that the energy industry is rising to this challenge, and increasingly pursuing hydrogen as a profitable business opportunity.”

Download Rising to the Challenge of a Hydrogen Economy