The report found low-carbon intensity (LCI) hydrogen can play a role in decarbonising hard-to-abate sectors at a “lower cost to society” if deployed at scale, estimating it could abate around 8% of US carbon emissions by 2050.

But it said “significant and immediate actions” beyond current policies are required to unlock low-carbon hydrogen demand sectors at the scale to support Net Zero aspirations.

US Energy Secretary, Jennifer Granholm, said the report’s findings were “sobering.”

Despite noting the stimulating effect of legislation such as the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA), the NPC report said current policy levers are “insufficient” to meet the US’ 2050 goals.

“Hydrogen demand would need to increase by nearly seven times compared to the current market to enable cost-effective achievement of US Net Zero ambitions,” it said.

“Additional policies recognising the value of carbon emissions reductions can support this demand growth by supporting LCI hydrogen achieve sector-specific cost parity with higher carbon incumbent fuels and feedstocks.”

The report noted industrial sectors along with transportation will be the first segments to utilise LCI hydrogen, but warned without additional policies, further unlocking “will not occur.”

It called for policies that increase investor certainty and confidence, as well as regulatory frameworks associated with permitting processes to “streamline navigation of administrative and legal complexities across jurisdictions.”

NPC said green hydrogen would need $1.8 trillion in capital investments between now and the mid-century to meet the 2050 goal, while blue will need $100bn.

The report made no mention of the US’ proposed rules on the 45V clean hydrogen production tax credit (PTC) under the IRA, which offers strict guide rails for the electricity supply for electrolysers, but it did call on Congress to extend to lifetime of the PTC, which is currently due to end in 2032.

Read more: Do 45V rules threaten to halt the IRA’s hydrogen momentum?