Global annual investments in hydrogen totaled $ 1.5 billion between 2018 and 2020, but the average could be $ 38 billion by 2040, according to a new report from Bloomberg Intelligence.

Bloomberg sees hydrogen play a major role in industries such as shipping and aviation

Released this week to mark the launch of a new ‘Hydrogen Thematic Basket’ and global hydrogen dashboard for the Bloomberg Intelligence (BI) website, the report says the hydrogen from a cottage industry to a monster with the help of government subsidies that attract investment to meet net zero emissions targets ”.

As such, hydrogen production and related infrastructure and services could represent a global investment opportunity of $ 2.5 billion through 2050. Sectors expected to achieve the lion’s share include production companies. energy, chemicals and metallurgy, those who already implement low-carbon technologies should benefit more than those who are lagging behind in decarbonization.

Specifically, BI expects annual global hydrogen investments to average $ 38 billion between 2020 and 2040, rising to $ 181 billion between 2041 and 2070. The need for countries Achieving the net zero goals is cited as one of the main drivers of this timeline shift, and the maturity of technologies and growing demand for energy cited as drivers after 2041.

According to BI projections, hydrogen will represent 10% of global final energy consumption by 2050. The proportion will be higher in maritime transport (50%), road transport (25%) and aviation (25%) than other sectors, with construction heating behind the average at just 5%. Instead, ground-based and air-source heat pumps will be the main technology.

Although hydrogen is not currently a major industry, BI believes that some companies are on the way to gaining a “front-runner advantage”. These include Shell, Orsted, Engie and Neste in the energy sector and Alstom and ITM power in the industry and equipment sectors.

Really green?

There is, however, the issue of ensuring that growth is truly green. More than 90% of the hydrogen produced globally in 2020 used fossil fuel-based processes, and criticism is mounting around “ blue hydrogen, ” which is produced using natural gas but co -localized with carbon capture technologies.

BI predicts that new national legislation, including subsidies, will help replace “gray” hydrogen, but the question of whether “green” hydrogen will be the primary replacement remains. “Water supply constraints, expensive components and relatively low energy density are major challenges for green hydrogen,” the report says. He predicts that “ gray ” hydrogen will account for less than half of global production by the mid-2030s and will continue to decline sharply until 2070.

The EU is named as the leader in green hydrogen policy. The block has pledged to deliver at least 6W of green hydrogen capacity by 2030 – a feat that will take €150 billion in investments, coming from both public and private sources. Questions remain as to whether the production of “blue” or “turquoise” hydrogen will be included in the accounting for this target.

In the UK, the long-awaited hydrogen strategy is imminent, following delays linked to Covid-19. It will build on the government’s initial £ 500million investment in the ten-point plan – intended to help deliver on the ambition to accommodate 5GW of electrolyzer capacity by the end of the decade .

Sarah george