Clean hydrogen needs $9 trillion investment to meet net zero by 2050

22 August 2023 Consultancy-me.com 4 min. read
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Decisive action in the short term could make green hydrogen competitive in less than 10 years. This type of clean hydrogen could help the world meet net zero goals by 2050.

Though green hydrogen could be a game changer in meeting climate goals like the Paris agreement, cumulative investments of around $9 trillion would be needed and carbon emitting industries would need to switch to hydrogen at an accelerated rate. That is according to a new report from Big Four professional services firm Deloitte.

As the momentum behind clean hydrogen as a dependable and environmentally friendly energy source intensifies, it is projected that the market will surpass the value of the liquid natural gas trade by 2030. This growth is then expected to reach an impressive annual value of $1.4 trillion by the year 2050.

Clean hydrogen needs $9 trillion investment to meet net zero by 2050

Green hydrogen is a type of hydrogen gas that is produced using renewable energy sources to split water molecules into hydrogen and oxygen. Because this hydrogen gas is produced without emitting any greenhouse gases or pollutants, it is considered a premier clean energy that could replace carbon emitting fuels on a large scale.

Though much of the clean hydrogen expected to become available by 2030 will come from China, the report shows an expected uptick in production in North America, South Asia, and Africa in the coming decades.

Morocco and Algeria are seen as especially poised to become a player on the green hydrogen market due to the incredible amounts of open, sun-baked territories where solar and wind power installations can be installed and used to power sustainable hydrogen production.

Further readingMorocco to become leader in green hydrogen production market.

Clean hydrogen needs $9 trillion investment to meet net zero by 2050

“While wind, solar, and other more traditional forms of renewable power are essential to a net-zero future, our research demonstrates how clean hydrogen can help tackle decarbonization of some of the world’s most emissions-intensive and hardest-to-abate sectors, further mitigating the effects of climate change while fueling economic growth, particularly in developing countries,” said Joe Ucuzoglu, CEO of Deloitte.

“If policymakers and business leaders provide decisive support for the market, green hydrogen can outcompete carbon-intensive hydrogen production in less than 10 years,” said Jennifer Steinmann, leader of Deloitte’s Global Sustainability & Climate practice.

“Reducing our carbon emissions and the physical and economic damages from unmitigated climate change is a massive win for nations and businesses alike. This represents a key pathway for the world’s developing countries to establish their energy security and independence, bolster economic growth as a result of the investment that will need to flow, and collectively firm up global growth and resilience,” she continued.

Clean hydrogen needs $9 trillion investment to meet net zero by 2050

Along with the report, Deloitte has announced the launch of two new initiatives designed to facilitate the adoption of green hydrogen: The Global Hydrogen Center of Excellence will be dedicated to supporting clients in adopting clean hydrogen and prioritizing decarbonization; and the Hydrogen Investment Corridor, an initiative that aims to enable international collaboration in the hydrogen trade with a focus on investment.

The report found that solar power-fueled hydrogen production will reign by 2050, with other types of hydrogen making up a smaller share of the market. Blue hydrogen, a form of hydrogen produced from natural gas through a process that captures and stores the resulting carbon emissions, is expected to remain a major part of the industry until being overshadowed by clean hydrogen around 2040.

recent report found that a pipeline from the Gulf region to Europe via Egypt was actually logistically feasible and could be economically viable. The demand for hydrogen, whether green hydrogen or not, is expected to continue growing due to energy concerns worsened by the ban on Russian oil.