H₂ has a crucial role in decarbonizing the world’s energy system, but uptake will be too slow. Governments need to make urgent, significant policy interventions, according to a new report by DNV.

In H₂ Forecast to 2050, DNV predicts the amount of H₂ in the energy mix will be only 0.5% in 2030 and 5% in 2050. However, to meet the targets of the Paris Agreement, H₂ uptake would need to triple to meet 15% of energy demand by mid-century.

“H₂ is essential to decarbonize sectors that cannot be electrified, like aviation, maritime, and high-heat manufacturing and should therefore be prioritized for these sectors,” said Remi Eriksen, Group President and CEO of DNV. “Policies do not match H₂’s importance. They will also need to support the scaling of renewable energy generation and carbon capture and storage as crucial elements in producing low-carbon H₂.”

According to H₂ Forecast to 2050, electricity-based green H₂ – produced by splitting H₂ from water using electrolyzers – will be the dominant form of production by the middle of the century, accounting for 72% of output. This will require a surplus of renewable energy, to power an electrolyzer capacity of 3,100 gigawatts. This is more than twice the total installed generation capacity of solar and wind today.

Blue H₂ – produced from natural gas with emissions captured – has a greater role to play in the shorter term (around 30% of total production in 2030), but its competitiveness will reduce as renewable energy capacity increases and prices drop.

Global spend on producing H₂ for energy purposes from now until 2050 will be $6.8 T, with an additional $180 B spent on H₂ pipelines and $530 B on building and operating ammonia terminals, according to DNV’s forecasts.

Cost considerations will lead to more than 50% of H₂ pipelines globally being repurposed from natural gas pipelines, as the cost to repurpose pipelines is expected to be just 10-35% of new construction costs. H₂ will be transported by pipelines up to medium distances within and between countries, but not between continents. Global H₂ trade will also be limited by the high cost of liquefying H₂ for ship transport and the low energy density of H₂. The H₂ derivative ammonia, which is more stable and can be more readily transported by ship, will be traded globally.

Early uptake of H₂ will be led by hard-to-abate, high-heat manufacturing processes such as iron and steel production, which use coal and natural gas. H₂ derivatives, such as ammonia and methanol, are key to decarbonizing heavy transport like shipping and aviation, but these fuels won’t scale until the 2030s according to DNV’s forecasts.

H₂ will not see uptake in passenger vehicles, and only limited uptake in power generation. H₂ for heating of buildings will not scale globally but will see early uptake in some regions that already have extensive gas infrastructure.

“Scaling H₂ value chains will require managing safety risk and public acceptance, as well as employing policies to make H₂ projects competitive and bankable. We need to plan at the level of energy systems, enabling societies to embrace the urgent decarbonization opportunities presented by H₂,” said Eriksen.

The uptake of H₂ will differ significantly by region, heavily influenced by policy. Europe is the forerunner with H₂ set to take 11% of the energy mix by 2050, as enabling policies both kickstart the scaling of H₂ production and stimulate end-use. OECD Pacific (H₂ 8% of energy mix in 2050) and North America (7%) regions also have strategies, targets, and funding pushing the supply-side, but have lower carbon-prices and less concrete targets and policies. Greater China (6%) follows on, recently providing more clarity on funding and H₂ prospects towards 2035, coupled with an expanding national emissions trading scheme. These four regions will together consume two-thirds of global H₂ demand for energy purposes by 2050.