A recent report by the Deloitte Center for Sustainable Progress (DCSP) highlights the immense potential of green hydrogen, produced from renewable energy sources, in meeting the energy demands of heavy industries.
The report forecasts significant growth in the global market, with estimated values of $642 billion by 2030, $980 billion by 2040, and $1.4 trillion by 2050. This projected investment indicates a cumulative push of $9 trillion by the global economy towards green hydrogen by 2050.
Industries such as steelmaking, chemical manufacturing, aviation, and global shipping, which require high-energy dispatch, present challenges for electrochemical batteries. While batteries are suitable for mobile devices, electric vehicles, and grid-scale energy storage, hydrogen offers a promising pathway for decarbonizing these energy-intensive sectors.
According to the report, the demand for hydrogen in these sectors may increase six-fold by 2050, resulting in nearly 600 million tons of hydrogen fuel use. Although hydrogen electrolysis requires substantial electricity, burning hydrogen fuel only produces water as a byproduct, making it an emission-free source when generated from renewable sources.
However, the report highlights a gap between the projected demand and the current production capacity of green hydrogen. Based on current project announcements, the global community can only meet a quarter of the projected demand by 2030. Addressing this gap will be crucial to fully realize the potential of green hydrogen in decarbonizing heavy industry.
The report estimates that green hydrogen could abate 85 gigatons of cumulative emissions by 2050, which is more than double the annual total emissions in 2021. Deloitte emphasizes that decisive climate action can enhance the competitiveness of green hydrogen. With around a decade of focused investment, green hydrogen can become cost-competitive, leading to the creation of approximately 2 million jobs per year between 2030 and 2050. Notably, up to 70% of this job growth could occur in developing countries.
Redirecting investments from fossil fuels to clean energy sources is crucial, and the global finance industry is showing an increasing appetite for major investments in green energy, according to Bernhard Lorentz, the founding chair of the DCSP.
Deloitte’s analysis relies on the Hydrogen Pathway Explorer (HyPE) model, which provides insights into the global hydrogen supply. It delves into the cost, production, and market dynamics of hydrogen, including the business challenges and various market dynamics. The report emphasizes the importance of interregional trade and diversified transport infrastructure in driving the development and adoption of green hydrogen.
To further support the scaling up of hydrogen businesses, Deloitte has launched the Deloitte Global Hydrogen Center of Excellence, offering advisory, implementation, and operational guidance services.
The report’s findings emphasize the transformative potential of green hydrogen in decarbonizing heavy industries and accelerating the global energy transition. By embracing green hydrogen, countries can mitigate climate change, fuel economic growth, and drive job creation, particularly in developing nations.
