IEA reduces 2030 low-emission hydrogen production forecast by almost a quarter
The International Energy Agency reported on Friday that a wave of cancellations as well as cost pressures and policy uncertainties have reduced the projected 2030 development by almost a quarter.
The IEA's Global Hydrogen Review states that the IEA expects to produce 37 million metric tonnes of low-carbon fuel per year by 2030. This is down from 49 millions a year ago as developers have shelved plans or delayed them.
It added that the actual output may be lower, as not all projects announced are completed.
The report stated that the capacity of plants that are already in operation, under construction, or that have reached a final investment decision will increase by more than five times from levels in 2024 to over 4 million tons annually by 2030.
The IEA stated that another 6 million tonnes could be available by then if the governments implemented effective policies to create demand and accelerated infrastructure development.
The main obstacle is cost competitiveness. In recent months, falling natural gas prices widened the gap between fossil-based and low-carbon hydrogen. Meanwhile, higher prices for electrolysers have put pressure on projects that are low-carbon.
The IEA predicts that the cost gap will narrow by 2030, as technology costs fall and regions with strong renewables and new regulations reduce cost structures.
China is the world's largest developer of hydrogen-electrolysers. It accounts for nearly 60% of all electrolyser production capacity and 65% of installed capacity. Electrolysis is used to split water into hydrogen, oxygen and carbon dioxide. This electricity is often renewable.
Other manufacturers are facing financial challenges due to slow adoption and rising costs. Chinese firms could also face future challenges, as their existing manufacturing capacity of more than 20 gigawatts per year exceeds the current demand.
The IEA found that installing Chinese electrolysers in other countries was not significantly cheaper than using those made by other manufacturers, once transportation costs and tariffs were taken into account.
Southeast Asia has emerged as a major hydrogen market. Projects have been announced that will produce 430,000 tons of low-emissions hydrogen per year by 2030, up from 3,000 tons currently. (Reporting and editing by Emelia Sithole Matarise; Forrest Crellin)
(source: Reuters)
