H2Tech Market Data 2023 - 4

liance. For both end goals, it is imperative that regulations,
market design, technological innovation, infrastructure
development and deployment strategies are aligned to
drive the uptake of low-carbon H2
.
H2 forecast and applications driving the H2
The global H2
economy.
generation market has grown more than
$7 B to nearly $137 B over the past year and is forecast
to grow at 9.1% (CAGR) to $201 B by 2025 and $225 B by
2030. Overall global low-carbon H2
demand continues to
follow the forecast from previous years and is expected to
increase to 200 MMtpy by 2030.
The drive to net zero (as indicated by the initiatives discussed
at COP26) will drive H2
demand more than carbon
pricing. The market growth will be mainly attributed to the
growing demand for clean fuel, as the world transitions to
low-carbon energy systems to reach global low-carbon/
net-zero targets; this is coupled with increasing governmental
policies and regulations to drive the same. The key
drivers for the H2
generation market include:
* Increased demand for long-term storage of renewable
energy and high-energy storage capacity for H2
* Significant CO2
abatement potential of clean H2
* Government and public ambitions for reducing
greenhouse gas emissions
* Government incentives and mandates to accelerate
the transition to clean energy and pave the path
to net-zero economies.
The scale-up of the H2
economy through 2030 must
be initially fueled by policy-driven credits and subsidies of
approximately $150 B, which will drive the cost of low-carbon
H2
competitive vs. natural gas
prices in parts of Europe, Asia and South America.
H2
applications and demand centers. H2
to $15/MMBtu in most regions of the globe, further
driving down delivered costs, coupled with carbon taxes/
pricing strategies to make H2
has applications
as a fuel in power generation and transport; a heat
source for steel, cement, paper, the metallurgical industry
and commerical and residential buildings; feedstock in the
refining, plastics and fertilizer industries; feed and fuel in
steelmaking, glass, food and miscellaneous industies; and
fuel in the mobility sector. The use of H2
in refineries and as
feedstock in industries continues to be the biggest demand
center. However, rapid expansion of green H2
strained by the lead times for low-carbon H2
demand is
being seen in the transportation and power sectors (FIG. 1).
The growth of H2
over the next few years will be conprojects
in
the pipeline to reach the state of economies to scale. The
market is forecast to show sharp growth between 2030
and 2040 driven by the falling cost of generation coupled
with tax mandates and policies propping low-carbon H2
on par with other fuels. The low-carbon H2
sector will
complement the renewable energy grid to decarbonize
hard-to-electrify sectors, while supporting power system
flexibility and stability. Although more than 90% of the
H2
produced today is fossil fuel-based, the low-carbon H2
market is growing fast and is forecast to outperform fossil
fuel-based H2
by 2030 (FIG. 2).
Industrial feedstock applications. Although not yet
cost-competitive, the use of clean H2
to decarbonize the
refining industry is no more challenging than newer applications.
The potential for blue H2
cations is estimated to account for 15% of clean H2
to decarbonize these applidemand
in
2050 (about 110 MMtpy) compared to nearly 90% today.
A significant share of decarbonization will come from the
current use of H2
methanol synthesis (54 MMtpy by 2030). Total H2
, particularly in refining, ammonia and
demand
from the refining industry is expected to expand 44% by
2030 and, based on current tracked projects, approximately
18% of this demand is slated to be met through clean H2
demand.
The ammonia and methanol synthesis markets are the
easiest sectors to decarbonize and present an attractive
business case for investors. Since the cost of natural gas
.
Therefore, the refining sector will need rapid expansion in
the next decade to meet projected H2
FIG. 1. H2 demand by sector. Source: bp's Energy Outlook, 2022.
4
MARKET DATA 2023 | H2-Tech.com
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H2Tech Market Data 2023

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