An industry report by the Hydrogen Council and McKinsey found that Europe is leading the world’s race for hydrogen projects and related investments. According to the report, 126 or 55% of 228 hydrogen projects announced globally are in Europe. Most of them are expected to be launched before 2031, and they will focus on producing renewable hydrogen or fossil fuel-based hydrogen using emissions capture technology. The study estimated that if all planned projects were realized, global hydrogen investments would be more than $300 billion this decade. However, it would account for just 1.4% of total energy sector investments.
The European Union has made hydrogen an important part of its plans to cut its greenhouse gas emissions to net-zero by 2050. It aims at increasing its electrolyzers capacity by 40 GW this decade from 0.1 GW today. Electrolyzers produce emissions-free hydrogen using renewable power and water. The EU is also betting on hydrogen to decarbonize its steel, heavy transport, and chemical industries. Europe’s chemical sector has already used hydrogen, but it is mostly fossil-based.
The Hydrogen Council includes companies such as Shell, Sinopec, BMW, and Microsoft. They plan to expand hydrogen investments by six folds through 2025, from the 2019 baseline. The report predicted that renewable hydrogen could hit cost parity with fossil fuel-based ones by 2028. However, the industry faced some challenges to build and scale-up hydrogen production, transportation, and storage infrastructure. Producing emission-free hydrogen also requires massive expansions of renewable power capacity.
