The global energy landscape is undergoing a significant transformation as countries strive to reduce greenhouse gas emissions and mitigate the impacts of climate change. In this pursuit, renewable energy sources have emerged as a crucial solution, with their potential to provide sustainable and clean power. Renewable sourced hydrogen, produced through the electrolysis of water, has emerged as a promising solution to decarbonize various sectors, including transportation, industry, and heating.
The Paris Agreement under the UNFCCC has renewed the global commitment to limit temperature rise to 1.5°C and atmospheric carbon dioxide (CO2) concentrations to 450 parts per million (ppm). The Agreement calls for concerted global efforts for rapid economy-wide decarbonization. There is clearly a need to decarbonize other forms of energy usage in hard-to-abate sectors to keep the goal of 1.5°C alive, which was reiterated at COP 26. Hard-to-abate sectors encompass steel, cement, chemicals (including Fertilizer), long-haul road transport, maritime shipping, and aviation.
Renewable sourced hydrogen will play a key role in decarbonization of the hard-to-abate sectors. Global hydrogen demand reached 94Mt in 2021, mainly for petroleum refining, and production of chemicals and fertilizer. The existing demand for hydrogen in these sectors indicates that the molecule is not entirely novel. It is expected that in the Net Zero scenario (IEA) the demand will likely be over 200 Mt by 2030 (Refer figure). Renewable sourced hydrogen market’s growth is attributed to the lowering cost of producing renewable energy by all sources, development of electrolysis technologies and high demand from FCEVs and power industry.