The green hydrogen supply chain is facing short-term scarcity and long-term uncertainty amid investment risks and the lack of decisive policy push, according to a new analysis from Germany’s Potsdam Institute for Climate Impact Research (PIK).
The report published in the journal Nature Energy on Thursday estimated that green hydrogen would likely supply less than 1 per cent of final energy globally by 2035, while the European Union might hit the 1 per cent mark in 2030.
According to the institute, the EU’s 2030 plan to supply 10 million tonnes of green hydrogen with domestic capacity will be out of reach policies are made to foster the advancement of energy technologies.
“Policymakers should prioritize hydrogen incentives in sectors where no other alternatives exist, such as heavy industry (e.g. steel), or power supply in hours of low wind and solar electricity generation,” said PIK co-author Gunnar Luderer.
The study noted that policies developed to kickstart a rapid deployment of electrolysers delivering Gigawatt-scale capacities could launch substantial innovation and scaling effects, allowing green hydrogen to meet demand in sectors inaccessible to direct electrification.
A breakthrough to higher green hydrogen shares is more likely to occur in 2040, but significant uncertainties remain, with today’s investment risks, the study added.
“However, history shows that emergency-like policy measures could yield substantially higher growth rates, expediting the breakthrough and increasing the likelihood of future hydrogen availability,” Potsdam Institute said in a media release.
Researchers said green hydrogen can replace fossil fuels in industry or long-distance transport where direct electrification is infeasible, making it uniquely valuable for achieving climate neutrality.
Global green hydrogen capacity of 600 megawatts in 2021 needs to increase by 6,000 to 8,000 times by 2050 in order to achieve a meaningful scale and contribute to climate scenarios compatible with the 2015 Paris Agreement, according to the analysis.
