Clean Hydrogen Demand Could Reach 660 Million Tonnes by 2050

Clean Hydrogen Demand Could Reach 660 Million Tonnes by 2050

Scaling up clean hydrogen lies with the experience of hydrocarbon-rich countries – McKinsey & Company

McKinsey's new report, The clean hydrogen opportunity for hydrocarbon-rich countries, reveals how hydrocarbon-rich countries (HRCs) can leverage their experience in large energy projects and resources to facilitate the scaling up of blue and green hydrogen.

HRCs form a diverse group across a range of climates and geographies, including countries such as Canada, the US, and Saudi Arabia.

Not only do these countries possess the hydrocarbons necessary to produce low-carbon blue hydrogen, but they also have experience in developing and operating complex industrial projects, and tend to have the renewable resources to produce green hydrogen at scale.

However, experience and developed infrastructure can only achieve so much. Additional investment will be needed to ensure HRCs maximize their position and produce the stable and efficient energy supply required to meet global demand.

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For the hydrogen promise to materialize for HRCs, they will need to scale up competitive supply of both blue and green hydrogen. Green hydrogen costs are expected to decline by approximately 50% by 2030, as electrolyser costs fall.

HRCs with access to low-cost wind and solar resources will be well placed to build on this green hydrogen momentum in the medium to long term, while also hedging the risk of blue hydrogen’s cost competitiveness in the decades to come.

With more than 680 large-scale clean hydrogen projects already announced globally – representing more than US$240 billion in mature investments – it is essential that these countries act soon to enhance their current assets and processes for the expected growth.

Tarek El Sayed, Senior Partner at McKinsey said: “Hydrogen has the capacity to play a fundamental role in curbing greenhouse gas emissions, abating up to 20 percent of global emissions across the world by 2050.

"Hydrocarbon-rich countries can enable the transition to clean hydrogen by leveraging their energy production experience, highly developed infrastructure, geographic locations, and access to abundant renewable energy to produce and export hydrogen with very low or zero carbon emissions.”

Markus Wilthaner, Partner at McKinsey said: “The implications of hydrogen energy are particularly important in making progress toward net-zero in hard-to-abate sectors.

"For example, McKinsey’s analysis shows that global low-CO2 flat steel demand could grow to more than 100 metric tons by 2030.

“McKinsey’s research suggests that hydrocarbon-rich countries should build on their competitive advantages and become leaders in clean hydrogen.

"These actions include investing and focusing on hydrogen equipment manufacturing, hydrogen production, CCUS, hydrogen transportation, clean hydrogen downstream production, and integrated project developers.

"Investment and action today will help countries access new and growing value pools whilst also driving the journey to a cleaner future.”

Read More: Globeleq Signs Framework Agreement for Green Hydrogen Plant in Egypt

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