'Policies do not match hydrogen's importance' for meeting Paris goals: DNV

Global adoption of hydrogen is on pace to satisfy just one-third of the volume required to hit 2050 targets set out in the Paris Agreement, indicating that governments around the world need to strengthen policies for hydrogen to meet its decarbonization potential, Norwegian maritime consultant DNV said in its June 14 hydrogen outlook.

"While there are ambitious statements about the prominent role that hydrogen could play in the energy transition, the amount of low-carbon and renewable hydrogen currently being produced is negligible," said DNV President and CEO Remi Eriksen. "That, of course, will change. But the key questions are, when and by how much?"

Hydrogen volume in the global energy mix will amount to 0.5% by 2030 and 5% in 2050 on its current trajectory, according to DNV's forecast. But to decarbonize hard-to-abate sectors -- like aviation, shipping and steel and cement manufacturing -- hydrogen adoption will need to increase to 15% by 2050 for the world to reach net-zero emissions.

By midcentury, green hydrogen produced via electrolysis is expected to comprise 72% of hydrogen produced globally, with blue hydrogen dropping from 34% in 2030 to 28% by 2050, DNV said. But the differences in regional hydrogen uptake will greatly depend on policy.

Europe is expected to be the hydrogen forerunner as enabling policies will scale hydrogen supply and demand so that the fuel will comprise 11% of the continent's energy mix by 2050. Pacific countries within the Organization for Economic Cooperation and Development are projected to have hydrogen comprise 8% of their collective energy mix by 2050, while North America and China are expected to have 7% and 6% hydrogen, respectively. Together, the four regions are slated to comprise two-thirds of global hydrogen demand by 2050 for energy purposes, said DNV.

But hydrogen's projected 5% portion of the global mix in 2050, representing more than 200 million mt volume, will need to be tripled for the world to meet the net-zero goals of the Paris Agreement.

"Policies do not match hydrogen's importance," Eriksen said. "They will also need to support the scaling of renewable energy generation and carbon capture and storage as crucial elements in producing low-carbon hydrogen."

Policy strengths, shortcomings

DNV's analysis of national strategies, funding levels and other policy mechanisms found that "not all regions have comprehensive policy frameworks in place to implement hydrogen ambitions." While "some regions are clearly on the forefront of advancing hydrogen," others look less mature.

Europe ranked highest for its pull and push policy measures, while Southeast Asia, Northeast Eurasia and Sub-Saharan Africa have little to no policy mechanisms to spur hydrogen production or consumption.

Most of Europe's hydrogen success is attributed to government-funded build-out of production clusters while stimulating offtake and end-use sectors. The European Union also makes hydrogen competitive with conventional fossil fuel sources through policy mechanisms, such as carbon pricing and the Carbon Border Adjustment Mechanism.

The OECD Pacific countries and North America follow Europe's lead. They have strategies, funding and targets pushing hydrogen's supply side, DNV said, but with fewer carbon pricing schemes to help drive demand.

"The North America region also has less concrete targets/policies, and hence less predictability, on the future end-use uptake trajectory," the report said.

DNV praised China's recently unveiled long-term hydrogen plan for "providing more clarity on funding and hydrogen prospects towards 2035 coupled with an expanding national emissions trading scheme."

The nation's first-ever hydrogen development plan, released in March, recognized hydrogen as a "crucial element of the nation's future energy system," the plan said. The plan aims to use green hydrogen to cut 1.7 billion mt CO2 by 2060. About 1.1 billion mt of that is expected to come from industrial sectors, while 460 million mt will come from the transportation sector.

While China's plan sets solid policies for the road transportation sector, DNV says policy frameworks beyond that sector "are not yet concrete."

The remaining regions have more spotty hydrogen plans, wherein only a select few countries have established strategies and funding, the report said. India, for instance, has announced a hydrogen mission and funding program, the country has yet to establish firm policy.

"We find that hydrogen is not on track to fulfil its full net-zero role by midcentury -- in fact far from it," the report said. "While it is widely understood that urgent upscaling of global hydrogen use is needed to reach the Paris Agreement, the present pace of development is far too slow and nowhere near the acceleration we see in renewables, power grid, and battery storage installations."