More efforts needed
In 2018, hydrogen maintained its unprecedented recent momentum, with over 20 MW of electrolyser capacity coming online, and larger projects announced (up to 100 MW, mostly in Europe). All six new CCS project announcements in Europe related to hydrogen. Notable policies in France and Korea, plus high-level co‑ordination by Japan, bear witness to increased government interest. China, raised its levels of ambition and vehicle production to globally significant levels. In 2019, a major new IEA analysis provides recommendations for governments and companies to build on current momentum. More effort is needed in three key, trackable areas: (1) increase the share of low-carbon hydrogen in existing industrial uses; (2) expand hydrogen into new applications; and (3) deliver cost reductions.
Hydrogen supply and demand Notes: Mtoe = million tonnes of oil equivalent. MtH2 = million tonnes of hydrogen.
Around 70 million tonnes of hydrogen are used today, mostly for oil refining and chemical production. This hydrogen is currently produced from fossil fuels, with significant associated CO2 emissions.
Clean energy progress for hydrogen can be tracked using three main indicators:
- the extent to which low-carbon hydrogen is used in existing industrial applications for hydrogen
- deployment in new sectors, in which its clean burning and storability make it a leading clean energy technology for electricity storage, heat, steel, low-carbon energy supplies and some transport sector applications
- scale-up, improvements and cost reductions in cross-cutting technologies such as electrolysers, fuel cells and hydrogen production with CCUS.
Water electrolysis deployment
Electrolysers are a cross-cutting technology that enable the production of clean-burning and storable hydrogen fuel from electricity and water.
While electrolysers are a well-known and long-used technology in a variety of industry sectors, the fastest-growing market is for new purposes relating to energy and climate: storing electricity, fuelling vehicles, injecting hydrogen into the gas grid, making synthetic fuels and using cleaner hydrogen inputs in industrial processes.
While less electrolyser capacity was installed for these purposes in 2018 than in 2017, the level is still high by recent standards and, furthermore, the largest individual facility was installed in 2018.
Electrolyser installations in the last two years are valued at USD 20 million to USD 30 million per year. Almost all the 229 projects that have come online since 2000 had significant government support, and this continues for recently announced projects.
However, a key metric for sustainability and cost reductions is the size of the largest individual project installed, which was 10 MW in 2018 – still below the size needed to demonstrate accelerated scale-up. Larger projects of 100 MW are announced, however, and a 20‑MW project in Canada is under construction.
As the market develops, a high share of projects now opt for polymer electrolyte membrane (PEM) technology, which is at an earlier stage of development than alkaline electrolysers. A higher share of recently announced projects aims to reduce emissions in existing hydrogen applications such as refining and ammonia and steel production.
Electrolyser capacity installed per year
Total Largest individual project 2010 0.48 0.32 2011 5.99 3.50 2012 6.45 1.26 2013 17.02 6.30 2014 5.59 1.81 2015 9.28 6.00 2016 2.13 1.25 2017 33.13 6.00 2018 20.27 10.00
Note: MWe = megawatt electrical.
Fuel cell vehicles and refuelling infrastructure
The global fuel cell electric vehicle (FCEV) stock reached 11 200 units at the end of 2018, with sales of around 4 000 in that year (80% more than in 2017).
Most of the sales continue to be Toyota Mirai cars in California, supported by the Zero Emission Vehicle (ZEV) mandate and expanding refuelling infrastructure. Japan has the second-largest stock, followed by Korea and Germany.
China's presence in FCEVs expanded significantly in 2018, with up to 2 000 small trucks produced. However, as these vehicles wait for the corresponding refuelling infrastructure, just 400 were registered for road use in 2018.
These heavier-duty applications can be particularly well-suited to hydrogen, which would overcome the range, charging time and payload issues faced by battery-electric vehicles (BEVs). Several new models of trucks and buses were unveiled in 2018, including the Nikola truck and the Wrightbus.
While deployment of FCEVs is low compared with plug-in hybrids (PHEVs) and BEVs, several countries have announced ambitious targets towards 2030, currently amounting to 2.5 million FCEVs.
Major national and sub-national FCEV targets
US China Japan Korea 2018 5900 63 2900 900 2020 13000 5000 40000 2022 40000 20000 2025 50000 200000 2030 1000000 1000000 800000 500000
At the end of 2018, 376 hydrogen refuelling stations were in operation. Japan leads the way with 100 stations, followed by Germany (43) and the United States (38).
Leading countries have announced targets to build a total of 1 000 hydrogen refuelling stations during 2025‑30.
Hydrogen in the gas grid
Projects around the world are examining the possibility of using existing natural gas infrastructure to deliver hydrogen to end users, mostly for heating purposes, either blended into natural gas at low levels or as 100% hydrogen (with infrastructure conversion).
In 2018, the GRHYD project in France began blending 6% hydrogen into the natural gas grid and will test up to 20%.
Installations that can blend roughly 1 700 tonnes of hydrogen per year into the gas grid are already in place around the world, and the IEA will continue to track this metric as part of Tracking Clean Energy Progress (TCEP).
Several countries and sub-national governments announced new hydrogen-focused strategies and policies in 2018:
- Japan hosted the first Hydrogen Energy Ministerial meeting in 2018, which resulted in the Tokyo Statement outlining four key areas in which to accelerate hydrogen technology progress. In March 2019, Japan amended its hydrogen and fuel cell roadmap, and a more quantitative cost target was set.
- France announced its Hydrogen Deployment Plan for Energy Transition in June 2018, the targets of which include 20-40% low-carbon hydrogen use in industrial applications of hydrogen, and a reduction in electrolysis cost to EUR 2-3/kg by 2028.
- The California Fuel Cell Partnership, an industry-government collaboration, issued a vision report in July 2018 targeting 1 million FCEVs and 1 000 hydrogen fuelling stations by 2030.
- Australia issued a national hydrogen roadmap in August 2018 and announced plans to release its hydrogen strategy in December 2019.
- Korea announced its hydrogen roadmap in January 2019, targeting FCEV production capacity of 6.3 million and 1 200 hydrogen fuelling stations by 2040. The previous month, Hyundai Motors had unveiled aggressive fuel cell production capacity targets to 2030.
Hydrogen value chains can be complex and require cross-sectoral investment co‑ordination, which multiplies risks, especially for new network infrastructure.
As there are currently few applications in which clean hydrogen is a cost-effective fuel or feedstock, incentives for investment are low and the path to cost reductions and competitiveness is unclear.
Governments have a central role in incentivising private sector investment in hydrogen to scale up supply and demand and help it become financially self-sustaining in a growing number of sectors and countries.
Long-term policies and strategies that commit to sustainable, resilient energy systems are needed to provide confidence that hydrogen investments will be profitable for decades to come.
Increase international and cross-sectoral co-operation
International and cross-sectoral co‑operation is crucial to ensure smooth and rapid deployment. Multilateral initiatives and projects can help share knowledge and leverage spillover benefits.
Only through international co‑operation will the first, crucial international trade route be established, for example among trading partners in the Asia-Pacific region.
Remove critical barriers to hydrogen deployment
Some barriers relate to regulatory obstacles and uncertain standards.
Areas for close attention include:
- hydrogen refuelling standards
- refuelling station permitting processes
- natural gas grid blending limits
- demonstration of safety measure effectiveness in new applications.
The European Commission’s HYLAW project is an example of multilateral progress that could be expanded beyond Europe's borders.
The IEA’s TCEP efforts on hydrogen are a first step. Governments and the private sector can contribute highly valuable updates, progress reports and metrics to ensure that decisions made around the world are based on the best available data.