The urgency to ramp up investment in industrial-scale hydrogen energy projects is greater than ever, according to a new report published this week by the Hydrogen Council.
Developed in collaboration with global consultancy McKinsey & Company, the report, Hydrogen Insights 2022, highlights 680 large-scale hydrogen project proposals have been announced, totalling US$240 billion in direct investment between now and 2030. This amounts to an increase of 50 per cent since November 2021 alone.
The Hydrogen Council says in a press release that with this substantial uptake in hydrogen energy project announcements, the next step by industry, investors and governments is to quickly ramp up final investment decisions (FIDs) in order to jump start project construction and operations as quickly as possible.
Yoshinori Kanehana, Chairman of Kawasaki Heavy Industries, Ltd. and Co-Chair of the Hydrogen Council, said, “With the growing concerns around energy security, it is clear our economies need hydrogen.” He adds that on-the-ground deployment is not moving fast enough and needs to accelerate to realize the benefits of hydrogen. Kanehana says the Hydrogen Council’s report proposes a series of priority actions for both policymakers and industry to overcome the challenges and accelerate large-scale hydrogen deployment.
“In addition, the report helps us understand the current state of the global hydrogen economy by highlighting what’s really happening in terms of deployment, financing and investment, as well as offering predictions for the future,” said Kanehana.
Tom Linebarger, Executive Chairman and Chairman of the Board of Cummins Inc. and Co-Chair of the Hydrogen Council said that climate change is the existential crisis, and it will require businesses and governments working together to address it and we must do more now. “To move to a zero emissions future, we must have multiple solutions available for our customers who require vastly different applications around the world and hydrogen will play a critically important role,” added Linebarger.
According to the report, capturing the maximum climate value of hydrogen to deliver the 2050 net zero carbon emissions target requires a tripling of investments in hydrogen projects by 2030 to US$700 billion, equivalent to an additional US$460 billion.
The Hydrogen Council report goes on to note that the 2030 hydrogen investment figure is equivalent to less than 15 per cent of investment committed to upstream oil and gas over the past decade.
To meet the planet’s commitment to positively impact climate change, the study makes clear that a rapid increase in hydrogen project investment and on-the-ground deployment is required. As well, joint action by the public and private sectors is urgently needed to move from project proposals to FIDs.