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Unlocking the Potential of Clean Hydrogen

Welcome to the new era of hydrogen

The global energy transition is accelerating, as governments and industries work to meet climate targets while improving energy security. Around the world, companies, financiers, research institutions, regulators, and governments are making efforts to decarbonize value chains, sectors, and economies.

While renewable electricity will dominate the future energy mix, clean hydrogen is emerging as a key solution in those areas where direct electrification has its limits. As a viable energy carrier and feedstock, hydrogen is suitable for decarbonizing hard-to-abate sectors, such as cement and sustainable aviation fuel (SAF) production. Additionally, it can stabilize energy grids by providing clean power on demand when renewable sources are unavailable.


Defining clean hydrogen

Clean hydrogen helps achieve net-zero, potentially reshaping the global energy landscape by 2030. Green hydrogen, produced via electrolysis from renewable electricity, is one of the least carbon intensive technologies for producing hydrogen.

To meet the European Union's (EU) sustainability criteria, green hydrogen must be produced using additional renewable electricity generation capacity and only at locations and times when renewable electricity is available. These criteria are set to prevent that increased demand for renewable electricity drives greater fossil-based electricity generation. Furthermore, renewable hydrogen must achieve a minimum of 70% reduction in greenhouse gas emissions (GHG) compared to fossil-based hydrogen, corresponding to a carbon intensity threshold of 3.38 kg CO2eq per kg of hydrogen.

The regulatory framework for clean hydrogen (beyond green hydrogen) is still evolving, with a Delegated Act on low-carbon fuels currently in progress. It is generally expected that all hydrogen production methods, regardless of process or feedstock, will be required to meet the 70% GHG emission reduction target compared to the fossil fuel comparator. The study, Assessing the impact of low-carbon hydrogen regulation in the EU, examines how the EU’s regulatory design of low-carbon hydrogen could affect the market adoption of various hydrogen production technologies and greenhouse gas emissions.

 

Unlocking market opportunities and investments

Deloitte’s research explores and assesses the development of the green hydrogen market and its climate potential. Based on Deloitte Hydrogen Pathway Explorer (HyPE) modelling, the market is projected to grow to 600 billion euro in annual revenue by 2030, increasing to 1.3 trillion euro by 2050 – with the potential to abate up to 85 GtCO2eq of cumulative emissions. Green hydrogen also offers significant job creation potential, supporting up to 2 million jobs per year globally from 2030 to 2050.

Key Insights:

  • Global trade in hydrogen derivatives (ammonia, methanol, SAF) could generate 260 billion euro annually by 2050.
  • The Middle East, North Africa, and Australia could quickly harness their excess low-cost supply to become some of the key players in the global hydrogen market. Achieving net-zero goals will require 8.7 trillion euro investments in the global hydrogen supply chain by 2050 in cumulative terms, of which 2.9 trillion euro will be required in developing economies. Despite its scale, the annual investment required is less than the 386 billion euro spent globally on oil and gas production in 2022. 

Green Hydrogen - Energizing the path to net-zero

Deloitte’s economic analysis Green Hydrogen - Energizing the path to net-zero shows how green hydrogen can play a crucial role in achieving net-zero targets by 2050.

Learn more

Co-operation and future-focused policy

Global trade and a diversified transportation infrastructure are key to unlocking hydrogen's market potential. Decisive policy support is essential to scale the green hydrogen economy and ensure it plays a central role in achieving climate neutrality.

Policy makers should focus on:

  • Establishing a robust regulatory framework for a climate-oriented market
  • Creating the conditions to support a strong business case for hydrogen production and end uses
  • Ensuring long-term market resilience

Targeted instruments can reduce the cost gap between green and fossil-based technologies, simplify the hydrogen supply chain, and promote international cooperation.

 

Our offering

Deploying or producing clean hydrogen at scale is not easy, resulting in limited progress to date and only a handful of projects moving towards implementation. To enable a clean hydrogen market, we need demand activation, low-cost hydrogen supply, new and stable policies, fit-for-purpose infrastructure, and new forms of collaboration, among other things. At Deloitte, we support organizations and operate across ecosystems to make a tangible impact in the market and help realize a clean energy future. We are dedicated to helping our clients scale clean hydrogen and achieve large-scale decarbonization.
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We focus on three key areas:

Advise: We develop feasibility studies, create innovative business models and value propositions, design new policies to drive investment, collaborate with academic institutions on critical topics, and share insights to help address some of the most complex questions. 

Implement: We connect players within ecosystems and devise new approaches to create value and share risk, define mechanisms to accelerate approvals, support the execution of on-the-ground projects, audit supply chains, and instill new trackability tools. 

Operate: We enable resilient supply chains and infrastructure, develop industry talent, and propel enabling technology. 

Our Thinking

Study: Low-carbon fuels: The last mile to net-zero. The role of synthetic fuels in decarbonizing the skies and the seas

Deloitte’s global outlook, leveraging a data-driven and model-based quantitative analysis, explores the uptake of synthetic fuels as key enablers of decarbonizing aviation and maritime shipping.

Study: Assessing the Impact of Low-Carbon Hydrogen Regulation in the EU

The Deloitte study provides scientific and quantitative insights into the planned regulatory design for low carbon fuels in the EU. Utilizing the Deloitte DARE and HyPE energy models, the study projects future European electricity systems, hydrogen production capacity, pipeline trade, and seaborne imports up to 2050. The analysis helps stakeholders understand how policy decisions will shape the competition between hydrogen technologies and their long-term environmental, economic, and competitive impacts.
Perspective
Minute Lesezeit5

Study in cooperation with Öko-Institute: Natural gas demand outlook to 2050

Natural gas is facing strong headwinds on the road to climate neutrality: a Deloitte and Öko-Institute analysis sees rapidly declining gas demand in Germany and the EU. Clean hydrogen will play a key role in replacing natural gas in line with climate targets. 
Analysis
Minute Lesezeit5

Study: A Security Policy for the Global Hydrogen Economy

Green hydrogen is a critical component of decarbonization strategies, providing a carbon-neutral solution for hard-to-abate industrial sectors. However, geopolitical challenges to meet future demand remain significant. Europe is projected to produce up to half of its hydrogen needs domestically, but will rely on imports, particularly from North African countries. The Deloitte publication outlines a hydrogen policy addressing potential partners, security aspects, and cooperation. The publication proposes seven options to consider for Europe’s energy partnerships.
Perspective
Minute Lesezeit5

Contact us

Prof. Dr. Bernhard Lorentz

Global Consulting Services Sustainability & Climate Leader
+49 1511 4881437