Industrial demand and not transport will vastly dominate hydrogen demand in the coming decades, according to a new report.
Turning Hydrogen Demand Into Reality: Which Sectors Come First?, from the International Chamber of Shipping, finds demand for hydrogen growing in multiple sectors, although the rate and timeline of uptake varies between sectors due to infrastructure and regulatory challenges and is likely to take place in stages.
“Current hydrogen scenarios for the coming decades depict the main use cases for hydrogen (and its derivatives) in the early stages being in energy-intensive industry (chemicals, fertiliser, steel and cement), followed by the transport sector (road, aviation) and finally the buildings sector,” it states.
“Hydrogen demand could double by 2040, with most of the additional demand coming from industrial sectors – as it is easier to uptake – acting as a baseload, the rest coming from new industrial uses and a small share of the total (less than 5%) from transport sectors.”
Overwhelmingly, the considered scenarios underline the dominance of hydrogen consumption by industry in the coming decades, it added.
“Industries that already use hydrogen currently as a feedstock are technically in an advanced position since they merely have to change their hydrogen source – if the economics allow it.”
“Additionally, those sectors that can relatively easily pass through additional hydrogen costs to their customers are economically in an advanced position – if they develop technologies based on hydrogen. Nonetheless, the pressure on industry to decarbonise globally will lead to a certain baseload demand for hydrogen.”
The report identifies Europe, South Korea and Japan as the three main hydrogen import markets.
For global hydrogen demand to keep the Net Zero by 2050 scenario within reach, demand would need to scale five times from current levels to reach nearly 500 million tonnes from 2030 to 2050.
Expected hydrogen demand ranges from 90Mt to 600Mt by 2050, equivalent to 4% and 11% of total global energy supply by 2050.
Since power demand for hydrogen electrolysis is enormous, reaching up to 25,000 TWh in the most optimistic scenario, the global power system would need to grow more than the tripling of renewable energy commitment announced at COP28 to make a hydrogen economy a reality.
“Without this, the transition to a hydrogen economy will be stifled and will not deliver on the objectives of the EU and the leading Asian governments,” it notes.
The development of port infrastructure and readiness to facilitate the transportation of hydrogen and its derivatives through the establishment of clean energy marine hubs will also be ‘essential’ for the maritime sector to become an enabler of the hydrogen economy.
There are 443 vessels currently transporting ammonia worldwide, but to meet expected demand of 20 million tonnes of hydrogen of the EU, the fleet will need to increase by up to 300 vessels for the EU 2030 target.
To meet 33 million tonnes, the current shipping ammonia fleet would need to more than double with 500 additional ammonia vessels to meet Japan and Korea’s demand alone.
