A study published in Nature Energy reveals that while over 60 countries have introduced strategies to boost green hydrogen production, less than 10% of the announced production capacity for 2023 was achieved. This highlights significant barriers in ramping up the hydrogen market, despite its critical role in decarbonizing industries.

Hydrogen remains an expensive commodity, with limited willingness to pay hindering progress. Researchers Adrian Odenweller and Falko Ueckerdt from the Potsdam Institute for Climate Impact Research analyzed 1,232 global hydrogen projects and identified a significant competitiveness gap. They call for a more pragmatic and politically robust approach to close the gap between project announcements and actual implementation.

"Over the past three years, global green hydrogen project announcements have nearly tripled," notes Odenweller. "Yet, only 7% of the originally planned production capacity for 2023 has been realized on schedule."

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The study attributes these shortfalls to increased production costs, weak demand-side interest, and regulatory uncertainties. Ueckerdt explains that achieving all announced projects by 2030 would require approximately $1 trillion in subsidies, far exceeding current global commitments.

Rather than relying solely on long-term subsidies, the researchers recommend implementing demand-side measures like binding quotas. For instance, the EU has mandated that by 2030, 1.2% of aviation fuels must be synthetic, hydrogen-based fuels, with this figure increasing to 35% by 2050. Such quotas can drive hydrogen into sectors that are challenging to electrify, including aviation, steel, and chemicals.

The study also identifies three critical gaps in hydrogen deployment:

1. Past Implementation Gap: The difference between announced and completed hydrogen projects in 2023.
2. Future Ambition Gap: The shortfall between the hydrogen required by 2030 under 1.5-degree climate scenarios and current project announcements.
3. Future Implementation Gap: The disparity between the subsidies needed to realize all announced projects and the public financial support currently pledged.

To address these gaps, the researchers highlight the risks of "fossil lock-ins," where companies may remain reliant on fossil fuels, undermining climate goals. They advocate transitioning to technology-neutral mechanisms like carbon pricing to reduce public costs and ensure fair competition with other climate mitigation solutions.

Ultimately, a balanced strategy is essential. This includes short-term support through subsidies and demand-side regulations, alongside realistic expectations for hydrogen’s potential. Such an approach could foster a more reliable path toward scaling green hydrogen, helping it play a pivotal role in global decarbonization efforts.