January 14, 2025
Introduction:
Read more of the Eurekalert article here: https://www.eurekalert.org/news-releases/1070242(Eurekalert) "Over the past three years, global project announcements for green hydrogen have almost tripled," says PIK researcher and lead author Adrian Odenweller. "However, only seven percent of the production capacity originally announced for 2023 has been completed on time during this period." According to the study, the recent problems with the market ramp-up of green hydrogen can be attributed to increased costs, a lack of willingness to pay on the demand side and uncertainties about future subsidies and regulation.
"Enormous additional subsidies of around one trillion US dollars would be required to realise all announced hydrogen projects by 2030," explains Falko Ueckerdt from PIK, "Green hydrogen will continue to have difficulties meeting the high expectations in the future due to a lack of competitiveness." However, permanent subsidies are not a solution. The two researchers therefore recommend using demand-side instruments such as binding quotas to channel green hydrogen specifically into sectors that are difficult to electrify, such as aviation, steel or chemicals. For example, according to an EU regulation, 1.2 percent of all aviation fuels must be blended with synthetic fuels based on hydrogen from 2030. This quota is set to rise to 35 percent by 2050.
Subsidy requirements far exceed announced global subsidies
In their study, the researchers quantify three key gaps between theory and practice: the past implementation gap, the future ambition gap and the future implementation gap. The first results from the difference between originally announced hydrogen projects and the projects actually realised in 2023. The ambition gap refers to the discrepancy between the amount of hydrogen that would be required by 2030 according to 1.5-degree scenarios and the projects currently announced by 2030. Although announced hydrogen projects are sufficient for the majority of the scenarios analysed, a wide implementation gap remains: The subsidies required to realise all projects by 2030 far exceed the global public financial support announced to date.
For a presentation of study results as published in Nature: https://www.nature.com/articles/s41560-024-01684-7
