The report, titled “Low-Carbon Hydrogen – A Path to a Greener Future,” further highlights that Energy and Utilities (E&U) companies, on average, anticipate low-carbon hydrogen to account for 18% of total energy consumption by 2050.

The global survey conducted for the report encompassed 13 countries, gathering responses from 500 executives representing E&U firms with an annual revenue exceeding $500 million. Additionally, 360 executives from end-user sectors with annual revenues surpassing $1 billion, including heavy transportation, aviation, maritime transport, steel, chemicals, and refining, also participated in the study. To provide comprehensive insights, the institute conducted over 21 in-depth interviews with stakeholders from supply- and demand-side organizations, startups, venture capital firms, academics, researchers, and regulators.

Across industries and geographic locations, there has been a remarkable increase in the demand for hydrogen, surpassing 10% over the past three years. More than half of the organizations have experienced demand growth exceeding 10% in countries such as France, India, the United Kingdom, Japan, the United States, Germany, and Sweden. Notably, India recently introduced its National Green Hydrogen Mission, further underlining the global trend towards hydrogen adoption.

The report emphasizes that this demand for hydrogen is expected to persist, particularly in traditional applications like petroleum refining, chemicals, and fertilizers. Additionally, emerging sectors such as heavy-duty transportation, aviation, and maritime are predicted to contribute to the growing demand for hydrogen.

Moreover, the report reveals that a majority of organizations perceive low-carbon hydrogen as a long-term solution to achieving emission reduction and sustainability goals. Approximately 63% of E&U organizations view low-carbon hydrogen as crucial for decarbonizing economies, while 62% believe it can help reduce dependence on fossil fuels and foster energy independence. By 2050, low-carbon hydrogen could potentially account for up to 55% of the hydrogen mix.

However, the report acknowledges existing challenges in hydrogen production, as current methods are neither cost-effective nor environmentally friendly. Sourcing low-carbon electricity and the high costs associated with electrolysers pose significant hurdles for the production of low-carbon hydrogen. Additionally, most organizations are still in the proof-of-concept or pilot stage with hydrogen projects. Only 11% of E&U organizations and 7% of end-user organizations have fully integrated low-carbon hydrogen projects into their respective markets. To enable large-scale commercialization and deployment of low-carbon hydrogen, critical engineering and infrastructure challenges must be addressed alongside cost and energy concerns.

The report also identifies sector-specific pain points faced by different industries. For instance, 65% of heavy transport organizations cited the scaling up of hydrogen fuel cell production as their primary infrastructure and engineering challenge. In aviation, 58% of respondents emphasized the need for aircraft design modifications to utilize low-carbon hydrogen as fuel, while 72% of steel industry respondents stressed the requirement for significant infrastructure upgrades to enable large-scale hydrogen-based steel production.

Beyond cost, infrastructure, and engineering issues, organizations also face a shortage of skills and expertise, which poses a major challenge to scaling hydrogen adoption. Approximately 60% of organizations identified this as a top obstacle, with skill shortages particularly notable for end-user organizations in Spain (70%) and E&U organizations in Japan (65%), France, and Australia (63% each).