World’s hydrogen portfolio exceeds 70 million tons per year

The global portfolio of projects for the production of “low-carbon” hydrogen, which are in various phases, was 71.4 million tons per year at the end of last year, according to the research firm Wood Mackenzie. This is comparable to the current global yearly hydrogen consumption.

The following dynamics were noticed last year. New hydrogen projects were announced in the first quarter, totaling a record 12 million tons (per year). Its amount fell with each succeeding quarter, reaching less than 1 million tons in the fourth. The authors point out that while no mega projects were launched in the fourth quarter of 2022, work on ongoing projects advanced significantly. For instance, Shell’s Holland Hydrogen I, which has a 200 MW capacity, has started construction.

“An energy crisis and several political declarations in favor of hydrogen production from the EU, the US, and the UK characterized the year 2022. Despite this, fewer announcements were made during the year as developers concentrated on lowering risks in the already-existing project portfolio “explains Flor Lucia De la Cruz, Senior Research Analyst at Wood Mackenzie’s Hydrogen and Emerging Technologies.

The rush of announcements about new projects for the production of electrolyzers “balanced” the delay in hydrogen project announcements. Investors reported projects with a combined 45 gigawatts (GW) of capacity in the fourth quarter of 2022, increasing the entire portfolio of projects announced last year to 83 GW.

360 GW is the total amount of known plans, according to Wood Mackenzie; this amount of projects has been amassed through time. Just 1% of projects have reached the building stage, and the majority are still in the very beginning stages.

However, the authors warn that due to plans for the construction of electrolyzer manufacturing facilities being made before those for the implementation of the hydrogen project, there is a possibility that there may be a considerable excess of production capacity by 2025. Representatives of Rystad Energy had voiced similar worries.