The future of H2: A regional outlook - Part 1: Africa, Asia and Canada

Over the past several years, the world has been engaged in an energy transition. According to the UN, more than 70 countries have set ambitious net-zero emissions goals,1 and many have enacted new regulations and initiatives to meet those targets. These pathways include, but are not limited to, the broader adoption of electric vehicles (EVs); utilising new low-/zero-carbon fuels (e.g., blue/green H?) to decarbonise power, transport and heavy industry; increasing investments in renewable energy; increasing the percentage of bio-feedstock blending in transportation fuels; incorporating the use of carbon capture and storage (CCS) or carbon capture, utilisation and storage (CCUS); and boosting the production of biofuels and alternative/renewable fuels, among others.

One pathway to help economies decarbonise is the use of low-/zero-carbon H?. Undoubtedly, H? will play a major role in global decarbonisation activities since it is well-suited to provide clean energy to the transportation, industry, power and buildings, and processing sectors. Most industry analysts forecast a stark rise in H? demand over the next 25 years. According to the IEA, global H? demand was approximately 91mt in 2021. Several industry forecasts show global H? production reaching anywhere between 300mt/yr and 650mt/yr by 2050. For example, the International Renewable Energy Agency (IRENA) forecasts global H? production increasing sixfold, to nearly 620mt/yr, by 2050. Conversely, BP’s Energy Outlook 2023 forecasts global H? demand reaching between 300mt/yr and 460mt/yr within the same timeframe—total H? demand is based on an accelerated and net-zero scenarios.

With the stark rise in global H? demand, a significant amount of capital investment is needed to satisfy forecast consumption. This investment include capital-intensive H? production projects, electrolyser manufacturing, pipeline conversion and construction, and H? refuelling infrastructure.

Active projects. Gulf Energy Information’s Global Energy Infrastructure (GEI) database has been tracking H? projects globally for more than two years. Since the database’s inception in early 2021, active H? projects have increased more than tenfold, to nearly 1,300 —a nearly 380% increase in project announcements.

Most active projects are in Western Europe, followed by Asia and the US. These three regions account for 80% of active H? projects globally, with Western Europe accounting for nearly 50% alone. In total, these projects represent a total capital expenditure of more than $1.13t. Most projects—nearly 70%—are in the planning/proposed stage. The following is a breakdown of active H? projects by status:

·?????? Planning/proposed: 69%

·?????? Feasibility study: 17%

·?????? FEED: 7%

·?????? Under construction: 7%

When broken down by production route, 76% are green H? projects, followed by blue H? pathways

As detailed in the individual regional reports of this analysis, hundreds of billions of dollars will be invested by the end of the decade—many of these projects will also contain an element of CCS or CCUS technologies to help limit emissions—to significantly boost wind and solar power generation capacity to fuel the massive amount of electrolysers that will be put into operation over the same timeframe. The electrolyser market has increased substantially over the past two years. According to the IEA, total installed electrolyser capacity eclipsed 1GW in 2022, with projects in the pipeline that could increase installed capacity to 134–240 GW by 2030.

Part 1 is a brief overview of H? capital projects, strategies and initiatives being implemented throughout Africa, Asia and Canada. Read the details on the capital projects, strategies and initiatives here: The future of H2: A regional outlook - Part 1: Africa, Asia and Canada | Global Energy Infrastructure