Hydrogen production to increase to 110 Mt per year by 2030, study says

By 2030, global hydrogen production will increase to 110 million metric tons (Mt) per year, and probably to 240 Mt by 2040, according to a study, ‘The Roaring ’30s – A clean hydrogen acceleration story,’ by the German-based management consultancy Roland Berger.

Courtesy of Roland Berger

The study revealed that global hydrogen production will grow by an average of 2% per year until 2030, and around 12% of the total volume by 2030 will be green hydrogen, which will be produced in a climate-neutral way using renewable energies.

Roland Berger said the demand will become increasingly diversified in 2040, noting that in addition to the manufacturing industry, which is expected to consume almost half (48%) of the hydrogen produced, the mobility and energy sectors will play a major role on the demand side, accounting for 30% and 15% respectively. The heating of buildings is estimated to account for 7% of demand.

Uwe Weichenhain, Partner at Roland Berger, said: “We estimate that 119 gigawatts (GW) will be added to hydrogen electrolysis plants by 2030. This is less than half of the 260 GW that governments have committed to globally and only around a fifth of the 590 GW that would be needed to achieve the 1.5-degree target. The 2030s will therefore become a critical decade for the hydrogen industry. We will see a massive acceleration of decarbonization and hydrogen production.”

Yvonne Ruf, Partner at Roland Berger, said: “Currently, the expansion of electrolysis capacities is too low to meet the Paris climate targets. In the 2030s, we will have to add as much capacity every year as in the entire previous decade. The remaining years of the current decade are crucial to create the structural conditions for the next decade to be a phase of acceleration.”

“Because if hydrogen does not establish itself as a competitive alternative for decarbonization, the debate could shift to the relocation of energy-intensive industries to countries that enable lower production costs thanks to low-cost clean energy, financial incentives or better legal frameworks.”

The most important success factor for the hydrogen strategy outlined in the study is an attractive economic framework that makes clean hydrogen an affordable alternative, Roland Berger emphasized,

“The central task for the rest of this decade is to create a structural framework because isolated incentives and regulations lead to isolated projects,” Ruf stated.

The first initiatives are already underway, Roland Berger said, highlighting tax incentives under the Inflation Reduction Act in the U.S., which support the low-cost production of clean hydrogen.

Weichenhain noted that such structural policy decisions now need to be scaled and expanded: “If we lay the foundations today, we can achieve the much-needed acceleration of hydrogen production and ensure that we achieve the global goal of decarbonization.”