In this midyear update, we delve into these key hydrogen trends and provide an update on how they are playing out and shaping the global energy transition.

Emergence of India’s hydrogen market

India has taken substantial strides towards establishing itself as a major player in the hydrogen market. At the beginning of 2023, the National Green Hydrogen Mission was approved by the Union Cabinet with the goals of making India a leading producer and supplier of clean hydrogen. The mission takes an all-encompassing approach towards building the hydrogen ecosystem. The development of key hydrogen hubs is prioritized to mitigate infrastructure challenges and reduce costs. India allocated USD $2.1 billion for supply-side incentives for electrolyzer manufacturing and clean hydrogen production, helping unlock scale and accelerate investment into hydrogen projects. The mission suggests appropriate policy frameworks that build upon the Green Hydrogen policy launched in February 2022, which will provide a favourable environment for reducing costs throughout the full value chain.

With a vision of becoming energy independent by 2047 and achieving carbon neutrality by 2070, the Indian government has recognized hydrogen’s potential and is committed to growing the sector. India’s ambitious plans for hydrogen infrastructure development are poised to attract domestic and international investments, positioning the country as a hydrogen centre in the near future.

The Inflation Reduction Act will boost North American hydrogen investment

In North America, the Inflation Reduction Act (IRA) has become a game-changer for hydrogen. This legislation aims to reduce inflation and promote economic growth by incentivizing clean energy investments, including hydrogen. The act has generated renewed interest in hydrogen technologies and catalyzed committed investments in research, development and commercial-scale deployments across the continent. As a result, industry leaders have increased their efforts to scale up hydrogen production, storage and distribution networks. This surge in investment is expected to accelerate the deployment of hydrogen infrastructure and foster the growth of a robust hydrogen economy in North America.

Our Hydrogen Insights 2023 report explores the impact of the IRA in deeper detail, dissecting how the act can significantly accelerate the clean hydrogen sector in the United States.

Just transition to Africa’s clean hydrogen hub

Africa, with its vast renewable energy resources, is poised to become a clean hydrogen hub. In 2023, we have witnessed the establishment of several partnerships and initiatives aimed at leveraging Africa’s potential for clean hydrogen production. In South Africa, 3 hydrogen hubs have been identified, presenting substantial economic and employment potential while strategically establishing the country as an important centre for hydrogen production. In North Africa, construction for a new production plant in the southern region of Morocco has started, with a projected annual output of 320,000 tons of clean hydrogen once the plant is developed. This past May, Egypt’s Cabinet granted approval to a draft law aimed at boosting clean hydrogen projects. The law will provide a range of incentives for renewable energy projects, encouraging investment in hydrogen initiatives.

These projects and policy changes not only enable Africa to address its own energy needs but also position the continent as a major supplier of clean hydrogen to the global market. Africa’s clean hydrogen hub has the potential to drive economic growth, create jobs and foster sustainable development across the region.

Global policy changes to accelerate final investment decisions

Governments worldwide have recognized the urgency of transitioning to a low-carbon economy and have implemented policy changes to expedite progress throughout the hydrogen project funnel. In 2023, several countries have introduced regulatory frameworks, financial incentives and supportive policies to encourage investment in hydrogen projects and increase international collaboration. By reducing regulatory barriers and providing long-term stability, these policy changes facilitate the realization of final investment decisions (FIDs) for hydrogen infrastructure projects. The increased clarity and certainty surrounding the regulatory landscape has encouraged investors to commit to hydrogen projects, with the total investments reaching FID increasing by 30% since May 2022. The swift acceleration of FID will enable the scaling up of the full hydrogen value chain across the globe.

Hydrogen as an energy storage solution

In 2023, we have seen growth in the research and development of innovative hydrogen storage. Hydrogen has the highest energy per mass of any fuel but its low ambient temperature density results in a low energy per unit volume. Therefore, the development of advanced storage solutions that have the potential for higher energy density is key to advancing hydrogen and fuel cell technologies. Innovation will enable new use cases and accelerate hydrogen deployment. From providing backup power at datacenters to providing off-grid power on construction sites to the developments for HyPSTER, the first hydrogen storage demonstrator, hydrogen storage enables the decarbonization of hard-to-abate industries. Hydrogen-based energy storage systems offer scalability, long-duration storage capabilities, and compatibility with existing infrastructure, making them an attractive solution for ensuring a stable and resilient energy supply.

Looking ahead

2023 has been a pivotal year for hydrogen, marked by advancements in technology, investments and policy support. The progress made in these key areas sets the stage for accelerated growth in the hydrogen sector, laying the foundation for a cleaner, more sustainable energy future. With governments, industry leaders and researchers collaborating to address challenges and unlock the full potential of hydrogen, it is evident that hydrogen will continue to play a crucial role in achieving global climate goals and transitioning towards a greener and more resilient energy system.

As we move into the second half of the year, it is essential to sustain and build upon the momentum generated thus far. Continued investments, research, and collaboration will be crucial to drive innovation, scale up hydrogen technologies and overcome remaining barriers. By embracing the opportunities presented by hydrogen, countries around the world can accelerate the energy transition and create a more sustainable and prosperous future for generations to come.