Electrolyser and renewable energy costs must continue decreasing to meet the projections, the report states.

Moreover blue hydrogen costs – which depend largely on natural gas prices as well as large upfront costs for carbon capture equipment – are also projected to rise, impacting its competitiveness.

However GlobalData finds the Ukraine crisis has made green hydrogen more competitive as costs are expected to fall as electrolyser capacity is scaled up and gigascale projects are developed – and investment has spiked, with investor interest rising 125% year-on-year.

The third quarter saw 54 new hydrogen plants announced, increasing active and announced projects to 1,368.

“Green hydrogen costs rely on technology development, while blue hydrogen costs fluctuate with gas marketed prices,” it states. “The development of the hydrogen market would make an impact in the second half of this decade, as currently just a small capacity is operating and the rest is still in various stages of development.”

The total active and pipeline capacity of low-carbon hydrogen projects stands at 155 Mtpa, with 91 Mtpa capacity expected for 2030 in a high-case scenario and 61 Mtpa in a low-case scenario.

Canada now leads “by far” the world’s upcoming capacity with almost 90 Mtpa across 44 different projects, while projects in Australia, Egypt, and Germany have added over 5 Mtpa capacity to the pipeline.

A slide showing the breakeven cost of hydrogen against alternative technology in Australia also illustrates the uneven projections for hydrogen take up.

While trucks, cars, ammonia and refineries are all forecast to be cost competitive by 2030, exceeding $2/kg, many of the hard-to-abate sectors – shipping, power generation, high-grade heat, gas blending, ships and planes – are unlikely to be viable.