British oil company BP expects low-carbon hydrogen demand to grow by a factor of ten between 2030 and 2050, potentially reaching 460 million tonnes/year, Kallanish reports.
By 2050, around 40% of total industrial hydrogen demand will come from iron and steel production, BP forecasts.
According to its annual Energy Outlook report, released on Monday, low-carbon hydrogen (green, blue and biogenic hydrogen) will play a critical role in decarbonising the energy system, but its growth is relatively slow this decade. By 2030, demand is forecast at between 30-50m t/y, replacing unabated gas- and coal-based hydrogen in industrial processes.
The pace of growth will pick up in the 2030s and 2040s as falling costs of production and tightening carbon emission policies allow these types of hydrogens to compete with incumbent fuels. Demand is estimated to grow to 300-460m t/y.
Besides steel, other heavy industries such as chemicals and cement will also start using more low-carbon hydrogen. Within the transport sector, hydrogen will be mostly used in marine and aviation. Hydrogen-derived fuels will account for 10-30% of total energy demand in the aviation sector and 30-55% in the marine sector, the report says.
BP analysts expect supply and demand to be aligned, enabled by a trade mix of regional pipelines and global shipping. Green hydrogen should dominate supply at around 60% in 2030 and 65% by 2050, while blue hydrogen will serve as an “important complement” offering a lower-cost alternative in some regions and a “firm (non-variable)” supply option, they say.
The dynamics of supply and demand vary according to geographic locations and its demand drivers. The EU is expected to produce 70% of its low-carbon hydrogen needs in 2030 and 60% by 2050% – if it reaches a net-zero scenario then. The bloc’s remaining needs should be met by imports – half via pipeline from North Africa and European countries such as Norway, and half shipped by sea from global markets.
Gabriela Farhangi UK