Clean Hydrogen on the Path to Net Zero

Part 3 — Global Demand as the Key Driver to Success

Current Projections for Clean Hydrogen Demand

An IEA report states that the demand for hydrogen has grown more than threefold since 1975, and continues to rise. However, this rise in demand has almost entirely been supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to hydrogen production. As a consequence, the production of hydrogen is responsible for CO2 emissions of around 830 million tonnes of carbon dioxide per year, equivalent to the CO2 emissions of the United Kingdom and Indonesia combined. This is why an increase in demand for clean hydrogen is critical, in order to reduce its production costs and make it competitive with hydrogen produced from less clean methods, such as burning coal or steam-methane reforming.

Clean hydrogen demand in 2030 will be driven by power applications and clean transport

Increasing Global Demand for Clean Hydrogen

Aside from reducing the production and storage/distribution costs of clean hydrogen (as covered in Part 2), there are two other critical measures that governments and private sectors across the world can implement to boost demand:

  1. Incentivising existing hydrogen users to switch to clean hydrogen
  2. Creating opportunities for new end-users of clean hydrogen in the transportation and power generation sectors
  • A carbon price
  • Subsidies for fuel switching for industrial users
  • Mandated decarbonisation targets for individual sectors
  • Grants for hydrogen consumption
  • Grants for hydrogen production
  • A renewable gas certificate scheme for gas retailers
  • A diesel replacement subsidy/ rebate
  • Government procurement policies

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