Executive summary
More projects and more final investment decisions, but
setbacks persist Global hydrogen demand reached 97 Mt in 2023, an increase of 2.5% compared to 2022. Demand remains concentrated in refining and the chemical sector, and is principally covered by hydrogen produced from unabated fossil fuels. As in previous years, low-emissions hydrogen played only a marginal role, with production of less than 1 Mt in 2023. However, low-emissions hydrogen production could reach 49 Mtpa by 2030 based on announced projects, almost 30% more than when the Global Hydrogen Review 2023 was released. This strong growth has been mostly driven by electrolysis projects, with announced electrolysis capacity amounting to almost 520 GW. The number of projects that have reached a final investment decision (FID) is also growing: Announced production that has taken FID doubled compared with last year to reach 3.4 Mtpa, representing a fivefold increase on today’s production by 2030. This is split roughly evenly between electrolysis (1.9 Mtpa) and fossil fuels with carbon capture, utilisation and storage (CCUS) (1.5 Mtpa).

Highlights
 Hydrogen production reached 97 Mt in 2023, of which less than 1% was lowemissions. Based on announced projects, low-emissions hydrogen could reach 49 Mtpa by 2030 (up from 38 Mtpa in the Global Hydrogen Review 2023).
 Installed water electrolyser capacity reached 1.4 GW by the end of 2023 and could reach 5 GW by the end of 2024. China leads in terms of committed projects and could account for almost 70% of 2024 capacity. Announced projects suggests that capacity could grow to close to 520 GW by 2030, although only 4% has reached a final investment decision (FID) or is under construction. For fossil-based production with carbon capture, utilisation and storage (CCUS), 14% of the announced potential production has reached FID, boosted by an acceleration of FIDs in the last 12 months. Progress is being made, albeit far more slowly than was expected a few years ago.
 Around 6.5 GW of electrolyser capacity reached FID in the past 12 months, nearly 12% less than in the 12 months prior to GHR 2023. More than 40% of this capacity is in China and 32% in Europe, where there was a four-fold increase compared to the previous 12 months. Committed projects are mainly in industry, or to produce hydrogen-based fuels for transport. On the other hand, several projects have been cancelled due to uncertainty about demand or regulations, financial hurdles, licencing and permitting issues.
 Electrolyser manufacturing capacity doubled in 2023 to reach 25 GW/yr, with China accounting for 60%. This capacity is heavily underutilised, with only 2.5 GW of output in 2023. Considering projects with FID or under construction, capacity could reach more than 40 GW/yr in 2024. The project pipeline to 2030 adds up to more than 165 GW/yr, of which 30% has reached FID.
 Producing renewable hydrogen today is generally one-and-a-half to six times more costly than unabated fossil-based production. This cost premium is much lower further down the value chain; for consumers, it typically represents only a few percentage points on final products (for example, it is around 1% for electric vehicles with steel produced using renewable hydrogen), but acceptance of higher prices varies by product.

Low-emissions hydrogen production by technology, status and region based on announced projects and in the Announced Pledges and Net Zero Emissions by 2050 Scenarios, 2030

Europe (with 25%), Latin America (15%) and the United States (15%) together
account for more than half of the potential low-emissions hydrogen production by 2030 In Europe, nearly 8 Mtpa of low-emissions hydrogen could be generated via electrolysis by 2030 (more than 5 Mtpa if projects at very early stages of development are excluded). Spain (20%), Denmark (12%) and Germany (10%) are leading in terms of announced water electrolysis projects, and could represent more than 40% of Europe’s low-emissions hydrogen production by 2030. In Australia, hydrogen production from electrolysis could reach almost 6 Mtpa by 2030 (almost 1.5 Mtpa if projects at very early stages of development are excluded). The availability of low-cost solar and wind resources, as well as its proximity to the Asian market, could make Australia one of the main exporters of hydrogen and hydrogen-based fuels (see Chapter 4. Trade and infrastructure). A similar trend is noticeable in Chile: according to our tracking, 16 electrolytic hydrogen projects, each with capacity greater than 1 GW, have been announced in Chile, although almost half of the potential capacity is in projects at very early stages of development. Potential production of low-emissions hydrogen from announced projects in Chile reaches almost 4 Mtpa (2 Mtpa if projects at very early stages of development are excluded), representing more than half of the lowemissions electrolytic hydrogen that could be produced in Latin America by 2030 (see Chapter 8. Latin America in focus).

Impact of optimal sizing of renewable to electrolyser capacity
For renewables-based electrolysis projects, achieving high utilisation rates for the electrolyser reduces the impact of the electrolyser CAPEX in the overall cost of hydrogen production. For directly connected projects, oversizing the renewable generation capacity relative to the capacity of the electrolyser can be a way to achieve this. This increases the CAPEX spending for renewable electricity generation, but it can help to minimise the overall hydrogen production costs by increasing the utilisation rate of the electrolyser. Optimising the capacity ratio of the renewable plant in combination with other design options such as combining solar PV and wind in a hybrid configuration, and including electricity and/or hydrogen storage, can also lead to a more stable supply of hydrogen or industrial process, which also helps to improve the operation and economics of any subsequent synthesis process.

Change in the method used to determine the electrolyser capacity factor
compared to the Global Hydrogen Review 2023 In previous editions of the GHR, low-emissions hydrogen production from electrolysers using renewable electricity has been computed assuming a 1:1 capacity ratio of the renewable electricity generation and the electrolyser. This year, the ETHOS modelling suite of the Forschungszentrum Jülich in Germany has been used to determine for each project location the optimal sizing of the renewable electricity capacity relative to the electrolyser capacity, taking into account local hourly solar PV and wind profiles and region-specific technology costs. The optimal capacity factors have been applied to projects using solar PV, onshore wind, offshore wind or planning to combine multiple renewables types, for which a hybrid configuration of solar PV and onshore wind has been selected; they account for more than half of the 36 Mtpa that could be produced from electrolysis by 2030. This approach is particularly useful for those projects where no information on the planned renewable capacity has been released. In order to provide values that are comparable with the previous editions of this report, the non-optimised production, i.e. using a 1:1 capacity ratio between the renewable electricity and the electrolyser capacities, is also provided. The difference between the two methodologies is only around 2.2 Mtpa H2.

Hydrogen production cost from hybrid solar PV and onshore wind, and from offshore wind in the Net Zero Emissions by 2050 Scenario, 2030

Highlights
 Hydrogen trade remains minimal and mainly limited to small-scale, localised transport between neighbouring countries, and trade in hydrogen-based products such as ammonia or methanol. In the Net Zero Emissions by 2050 Scenario (NZE Scenario), interregional trade in hydrogen and hydrogen-based fuels reaches more than 70 Mt in hydrogen-equivalent terms (Mt H2-eq) by 2050, representing almost 20% of global low-emissions hydrogen demand in that year.
 If all announced projects come to fruition, export-oriented projects could account for 16 Mtpa H2-eq, or about one-third of low-emissions hydrogen production by 2030 The amount has increased only marginally since the Global Hydrogen Review 2023, indicating that production projects announced in the past year mainly focus on domestic markets. The announced volume still highlights the potential for an international market, though uncertainties persist. As much as 11 Mtpa H2-eq of this is still at very early stages of development, and a further 5 Mtpa H2-eq is undergoing feasibility study.
 Ammonia accounts for 85% of the trade from announced projects, reflecting the chemical industry’s existing experience in shipping ammonia. Australia and the United States combined could account for 10 Mtpa H2-eq of exports in 2030, while most projects (75%) target Europe as an import market.
 Announced new pipeline projects could reach nearly 40 000 km by 2035 – which is almost in line with needs in the NZE Scenario, though only 2% have reached final investment decision (FID). Infrastructure development is a capitalintensive, lengthy process, meaning planning must start early. Several pipeline projects got underway in the past year, but progress on others is slow.
 Pipelines are the most cost-effective transport option, particularly for large volumes, but shipping can be cheaper over longer distances. This would require new port infrastructure and suitable tankers. On the basis of announced projects, more than 100 new hydrogen and ammonia terminals and port infrastructure projects could be realised by the end of the decade, on multiple continents. More than half of these projects are new ammonia export terminals.
 Despite recent project announcements, planned underground hydrogen storage capacities – 10 TWh by 2035 and 40 TWh by 2050 – fall far short of the requirements of the NZE Scenario, in which more than 230 TWh is required by 2031 By 2050, the need for hydrogen storage in the NZE Scenario may reach 410 bcm, a volume comparable to natural gas storage infrastructure today.

Source:https://www.iea.org/reports/global-hydrogen-review-2024