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Hydrogen

Making it happen

Decarbonisation has become a global imperative. The COP27 conference sought to push the Paris Agreement targets further, and move from pledges to practical action, with the drive to implement decarbonisation solutions and lower emissions now a priority.

Clean hydrogen will play a key role in the future energy system—particularly in decarbonising hard-to-abate sectors. By 2030, clean hydrogen is expected to be used in sectors such as aviation, refining and road freight, and expand into others such as shipping thereafter.1

Announcements of clean hydrogen supply projects are accelerating, but it is uncertain whether most projects will materialise, and they are not sufficient to meet expected demand outlined in the IEA ‘Net Zero Emissions by 2050’ Scenario (NZE). Indeed, three times the capacity announced so far will be needed to be operational by 2030 to stay on track for NZE by 2050.

Our new report sets out the practical solutions needed today to kick-start the large-scale deployment of clean hydrogen, and includes a deep dive into a framework of five key factor conditions:

Addressing natural demand (i.e., demand emerging without regulatory support in specific sectors) through new ‘green’ value propositions and aggregation of off-takers is important to send clear signals to the market, stimulate regulated demand and accelerate investment in supply.

Adopting simple, joined-up regulations across supply and demand—based on a new emission-intensity certification (e.g., a Hydrogen Emission Intensity Index)—and the fast release of permits can accelerate hydrogen deployment and emission reduction.

Aligning on the decarbonisation technologies to adopt within each sector and maturing them quickly, will dictate the speed of demand pick-up for clean hydrogen. On the supply side, a ‘think big, start small, scale fast’ approach to production development is needed to quickly balance large-scale needs and short-term supply chain constraints.

Faster asset cycle changes are needed, coupled with infrastructure reuse where possible, complemented by large-scale investment in renewable capacity, grids and infrastructure.

Collaboration is essential for clean hydrogen production, with new commercial and business models needed to address the systemic challenges and inertia that can delay investments.

Through interviews with over 350 CEOs, executives, and leaders across the private and public sectors, we captured insights on how the market could accelerate, by linking the demand, production, and distribution of clean hydrogen. With decarbonization high on every corporate agenda, this report makes for essential reading.

1 IEA. Net Zero by 2050. IEA, Paris. May 2021. Available from: https://www.iea.org/reports/net-zero-by-2050.

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