Hydrogen industry is expanding fast in various new applications. Announced projects in manufacturing steel projects such as direct reduced iron (DRI) are growing rapidly. In the transport sector, the first hydrogen fuel cell train started operations in Lower Saxony Germany last year. The use of hydrogen is also attracting attention in power, refinery, and methanol industries.

China is the world’s largest hydrogen consumer with 244TWh in 2023, almost 5% higher than last year. The United States is the world’s second largest hydrogen consumer at around 207TWh this year. Hydrogen demand in Europe is expected to reach 128TWh by the end of this year, almost 3% higher than 2022.

Low carbon hydrogen production will be exceeded 1,000TWh by 2030 with 56% based on electrolysis and 44% on fossil fuels with carbon capture utilisation and storage (CCUS). The installed electrolyser capacity could actually reach 135-242GW by the end of this decade to produce 34Mt of low carbon hydrogen production per year by 2030.

Hydrogen is used in refineries to remove sulphur and other impurities to upgrade heavy oil fraction into lighter products. The estimated hydrogen demand in refinery sector is 1,180TWh this year, 0.8% higher than last year. The US hydrogen consumption for refinery applications will continue to increase to 2040 due to high demand of fossil fuel in the US.

Globally, refinery demand of hydrogen is expected to peak in 2030, reflecting increased penetration of clean technologies in the transport sector, e.g., direct electrification, hydrogen and hydrogen-derived fuels and biofuels.

Ammonia, methanol and DRI in the steel industry are the main industries of hydrogen consumption. The global ammonia production, which is mainly by China and Russia, will more than triple from 30TWh today to 100TWh by 2027. In 2023, around 40% of global DRI will be produced in the Middle East and 30% in India. With the current announced green steel projects, India will consume 260TWh hydrogen energy by 2030 in the steel industry.

Global hydrogen energy production for methanol will reach 77TWh by 2030, five times more than last year’s production, using electrolysis and the use of CCUS technologies to achieve low emission methanol production.

Hydrogen demand in transport exceeded 45kt in 2022, over 53% higher than the previous year. Road vehicles mainly trucks and buses, are the major source of hydrogen demand in transport due to their high annual mileage and heavy weight relative to the larger stock of fuel cell electric cars.

With the successful trials of the first fuel cell train fleet in Germany, interest is growing around the world and other countries are planning to perform their own trials. Hydrogen demand will increase in the transport sector especially where electrification is difficult, and the distances are too far to be covered by battery electric trains.

Maritime and aviation sectors are also attracting more interest in the use of hydrogen and hydrogen synthetic fuels. Despite the technologies are still not as mature as those for road and rails, there are numbers of projects on hydrogen, ammonia and methanol that can be operated in the coming decade.

China remains dominant in hydrogen demand for the heavy-duty vehicle transport sector. By the end of 2022, China had over 4,500 fuel cell buses and 5,100 fuel cell trucks on the road. FEW Jiefang delivered 300 fuel cell trucks including cargo, dump and tractor models in June 2022.

Outside of China is also experiencing the expansion in fuel cell truck market due to polices such as advanced clean truck regulation in California. In addition, the global Memorandum of Understanding on Zero Emission Medium and Heavy-Duty Vehicles, which was signed by 16 countries, will force truck manufacturers to increase their offerings of zero emissions trucks.

Although, hydrogen accounts for less than 0.2% of total power production today, interest in the use of hydrogen and ammonia for electricity production is increasing and is expected to reach 3.5GW of worldwide power plants by 2030. Almost 84% of the announced projects are on the use of hydrogen in combined-cycle or open-cycle gas turbines. 11% of them focus on fuel cells and 5% on the co-firing of ammonia in coal-fired power plants. Some current designs of reciprocating gas engines, fuel cells and gas turbines are electricity generation technologies operating on hydrogen-rich gases or even pure hydrogen.

Low carbon hydrogen and ammonia will remain expensive until the end of decade. However, the gap between the generation cost and electricity price can be moderated by wholesale electricity market. Electricity market can also support measuring carbon pricing to reduce the cost gap of fossil fuel electricity generation.