Speaking at a press conference for the launch of the IEA’s Renewables Market report, International Energy Agency executive director Fatih Birol warned that ‘green’ hydrogen will play a ‘disappointingly’ small role in global decarbonisation between now and 2030.
Despite a large number of projects and huge excitement around green hydrogen, said Dr Birol, IEA research had found a significant gap between the hype and the reality. “Of all the projects today in the pipeline” he said, “only 7% will see the light of day and come online before 2030.” He said this was disappointing, because green hydrogen “can and should play a very important role to address our climate challenge and diversify the energy mix”.
Dr Birol said the hydrogen bubble had burst because of a slow pace of projects reaching an investment decision, combined with a limited appetite from off-takers and higher production costs. To fully convince investors, ambitious project announcements should be followed by consistent policies supporting demand. Dt Birol added that he hoped “to see governments take steps to create demand for hydrogen”.
Heymi Bahar, a senior renewables analyst at the IEA complied, confirming that he expected only a small number of green hydrogen capacity to become operational in the next five years, and added that, “compared to last year, we are less optimistic [on green hydrogen].”
- The IEA has been sounding warnings about the effect of insufficient investment for some time. In an October 2021 report it found that only one-quarter of the investment needed in clean hydrogen this decade for the world to reach net zero emissions by mid-century had actually been put forward.
The report noted that countries with hydrogen strategies had at that time committed at least $37 billion to the development and deployment of hydrogen technologies, and the private sector has announced investments totalling about $300 billion, but that $1.2 trillion worth of investment would be needed by 2030 to remain consistent with its calculation of a pathway to net zero emissions by 2050.
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