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Hydrogen for Net-Zero

A critical cost-competitive energy vector

November 2021

Published in November 2021 by the Hydrogen Council. Copies of this document are available

upon request or can be downloaded from our website:

www.hydrogencouncil.com

This report was authored by the Hydrogen Council in collaboration with McKinsey & Company.

The authors of the report confirm that

1. There are no recommendations and / or any measures and / or trajectories within the report

that could be interpreted as standards or as any other form of (suggested) coordination between

the participants of the study referred to within the report that would infringe the EU competition

law;

and

2. It is not their intention that any such form of coordination will be adopted.

Whilst the contents of the Report and its abstract implications for the industry generally can be

discussed once they have been prepared, individual strategies remain proprietary, confidential

and the responsibility of each participant. Participants are reminded that, as part of the

invariable practice of the Hydrogen Council and the EU competition law obligations to which

membership activities are subject, such strategic and confidential information must not be

shared or coordinated – including as part of this Report.

Hydrogen for Net-Zero

Hydrogen Council, McKinsey & Company

TABLE OF CONTENTS

Executive summary

Introduction

Chapter 1

Demand for hydrogen and its cost- and carbon- cutting role

Chapter 2

Scaling through 2030 is critical for meeting long-term targets

Chapter 3

Hydrogen momentum and required investments

Chapter 4

Action is required

Appendix

Methodology

Glossary

Bibliography

iii

Hydrogen for Net-Zero

Hydrogen Council, McKinsey & Company

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HydrogenforNet-ZeroAcriticalcost-competitiveenergyvectorNovember2021PublishedinNovember2021bytheHydrogenCouncil.Copiesofthisdocumentareavailableuponrequestorcanbedownloadedfromourwebsite:www.hydrogencouncil.comThisreportwasauthoredbytheHydrogenCouncilincollaborationwithMcKinsey&Company.Theauthorsofthereportconfirmthat1.Therearenorecommendationsand/oranymeasuresand/ortrajectorieswithinthereportthatcouldbeinterpretedasstandardsorasanyotherformof(suggested)coordinationbetweentheparticipantsofthestudyreferredtowithinthereportthatwouldinfringetheEUcompetitionlaw;and2.Itisnottheirintentionthatanysuchformofcoordinationwillbeadopted.WhilstthecontentsoftheReportanditsabstractimplicationsfortheindustrygenerallycanbediscussedoncetheyhavebeenprepared,individualstrategiesremainproprietary,confidentialandtheresponsibilityofeachparticipant.Participantsareremindedthat,aspartoftheinvariablepracticeoftheHydrogenCouncilandtheEUcompetitionlawobligationstowhichmembershipactivitiesaresubject,suchstrategicandconfidentialinformationmustnotbesharedorcoordinated–includingaspartofthisReport.HydrogenforNet-ZeroHydrogenCouncil,McKinsey&Company2TABLEOFCONTENTSExecutivesummaryIntroductionChapter1Demandforhydrogenanditscost-andcarbon-cuttingroleChapter2Scalingthrough2030iscriticalformeetinglong-termtargetsChapter3HydrogenmomentumandrequiredinvestmentsChapter4ActionisrequiredAppendixMethodologyGlossaryBibliographyiii8122234444853543HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyExecutivesummaryivHydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyHydrogeniscentraltoreachingnetzeroemissionsbecauseitcanabate80gigatonsofCO2by2050Hydrogenhasacentralroleinhelpingtheworldreachnet-zeroemissionsby2050andlimitglobalwarmingto1.5degreesCelsius.Complementingotherdecarbonizationtechnologieslikerenewablepower,biofuels,orenergyefficiencyimprovements,cleanhydrogen(bothrenewableandlowcarbon)offerstheonlylong-term,scalable,andcost-effectiveoptionfordeepdecarbonizationinsectorssuchassteel,maritime,aviation,andammonia.Fromnowthrough2050,hydrogencanavoid80gigatons(GT)ofcumulativeCO2emissions.Withannualabatementpotentialof7GTin2050,hydrogencancontribute20%ofthetotalabatementneededin2050.aThisrequirestheuseof660millionmetrictons(MT)ofrenewableandlow-carbonhydrogenin2050,equivalentto22%bofglobalfinalenergydemand.Hydrogeniscriticalinenablingadecarbonizedenergysystem.Itfacilitatestheintegrationofrenewablyproducedenergybecausehydrogencanstoreenergy,provideresilience,andtransporthighvolumesofenergyoverlongdistancesviapipelinesandships.Hydrogenallowsenergycompaniestotapextremelycompetitive,butotherwise“stranded”renewableenergyinremotelocations.Thisacceleratestheenergytransitionasitallowsmorerenewablestobebuilt.Finally,becausehydrogencanbeproducedfromelectricityandusedas,orconvertedinto,fuels,chemicals,andpower,theproductionofhydrogenfromelectricitywillconnectandfundamentallyreshapecurrentpower,gas,chemicals,andfuelmarkets.Intermsofenduses,hydrogeniscriticalfordecarbonizingindustry(e.g.,asfeedstockforsteelandfertilizers),long-rangegroundmobility(e.g.,asfuelinheavy-dutytrucks,coaches,long-rangepassengervehicles,andtrains),internationaltravel(e.g.,toproducesyntheticfuelsformaritimevesselsandaviation),heatingapplications(e.g.,ashigh-gradeindustrialheat),andpowergeneration(e.g.,asdispatchablepowergenerationandbackuppower).China,followedbyEuropeandNorthAmerica,willbethelargesthydrogenmarketsin2050,togetheraccountingforabout60%ofglobaldemand.Fulfillingthisdecarbonizationrolewillrequirealargescale-upofcleanhydrogenproductioninthecomingdecades.Supplying660MTtoend-useswillrequire3to4terawatts(TW)ofelectrolysiscapacityandabout4.5to6.5TWofrenewablegenerationcapacity,aswellas140to280MTofreformingcapacityforlow-carbonhydrogenproductionandassociatedinfrastructuretostoreabout1to2.5GTofCO2ayear.Insuchasupplyscenario,renewableenergyforhydrogenwillaccountforroughly15%to25%ofthe27TWoftotalnewrenewableenergyrequiredby2050ctoreachnetzero–a10xincreaseoverthe2.8TWinstalledtoday.Scalingthrough2030iscriticalformeetinglong-termtargetsandunlockingcost-efficientdecarbonizationopportunitiesSettingourenergysystemonatrajectorytonet-zerorequiresfirmcommitmentandrapidacceleration.Weestimatethedeploymentof75MTcleanhydrogenisneededby2030–anambitious,yetachievabletarget.Thissupplyofcleanhydrogencanreplace25MTofgreyhydrogeninammonia,methanol,andrefining;50billionlitersofdieselingroundmobility;and60MTofcoalusedforsteelproduction.EarlygrowthincleanhydrogendeploymentwilllikelycenteronEurope,Japan,andKorea,whichwillaccountforabout30%ofnewcleandemand.ChinaandNorthAmerica–significantlylargerhydrogenmarketstoday–willfollowcloselywithabout20%ofdemandforcleanhydrogeneach.vHydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyTosupplythisdemandinacost-optimalway,amixofbothrenewableandlow-carbonhydrogensupplywouldrequire200to250gigawatts(GW)ofelectrolyzercapacityand300to400GWofnewrenewables,aswellas45to55MToflow-carbonhydrogenproductioncapacityandassociatedcarboninfrastructuretostore350to450MTofCO2ayear.Thiswillcreatetheneedtostepupthedeploymentofrenewables:in2020,260GWofcapacitywascommissioned.Afurtheraccelerationisrequiredtomeetrisingelectrificationdemand.Thisdeploymentofcleanhydrogenwillnothappenwithouttherightregulatoryframework–bothgovernmentsandbusinessesneedtoact.Requirementsincludeasetofsuitablepoliciessuchasmandatesandrobustcarbonpricing,thedevelopmentoflarge-scaleinfrastructure,andtargetedsupportandde-riskingoflargeinitialinvestments.Theseinvestmentswillpayoff;scalinghydrogenisthekeytoreducingcoststhrougheconomiesofscale,makinghydrogenavailabletoend-usersthroughthenecessaryinfrastructure,andultimatelymakinghydrogenacompetitive,available,cost-efficientdecarbonizationvector.Inthisreport,theuseofcleanhydrogenwouldabateasmuchas730MTofCO2annuallyin2030,theequivalenttomorethantheannualCO2emissionsin2019oftheUK,France,andBelgiumcombined.Thedecarbonizationcontributionfromcleanhydrogenusewilldifferperend-usesegment:Currentindustrialuses:Alargeshareofthedecarbonizationwillcomefromcurrentindustrialusesofhydrogenwith270MTofCO2avoidedayear,particularlyfromthedecarbonizationofrefiningandammoniasynthesis.Theseapplicationsareamongthemostattractiveusesforearlydeliverablelow-carbonhydrogen,atcarbonabatementcostsforhigh-purityemissionstreamsofUSD50to100atoninmostregions.Groundmobility:Inthegroundmobilitysectorhydrogencouldavoidabout90MTofCO2emissionsin2030.Byabout2030,hydrogen-poweredvehicles(e.g.,heavy-dutytrucks,coaches,long-rangepassengervehicles,andrail)couldachievecostparitywithinternalcombustionengine(ICE)vehicles,leadingtoasignificantscale-up.Givenheavypayloadsandlongdistancestraveled,trucksaccountforthebiggestshareoftheabatement.Withashareofabout11%ofglobalheavy-dutytrucksalesin2030,emissionsofabout60MTofannualCO2emissionswouldbeavoided–asmuchas22millionbattery-electricpassengervehicles.Hydrogen-basedfuels:Fuelsbasedonhydrogen,e.g.,ammonia,methanol,e-methane,e-kerosene,orliquidhydrogen,arethemostpromisingscalablealternativestodecarbonizeaviationandmaritimeapplicationsaboveandbeyondbiofuelswherefeedstockavailabilityislimited.Theearlyadoptionofhydrogeninthesesectorswillbedrivenbyregulatorsandindustrycommitments,andwhilehydrogenadoptionin2030willberelativelylowinthesesegmentsatabout1%and6%,itlaysthefoundationtodecarbonizethesesectorslonger-termbyupto60%by2050.Steel:Whilerequiringlargerinitialinvestments,theuseofhydrogeninsteelrepresentsalarge,cost-effectivedecarbonizationleverfor2030,with880MTofCO2abatedbythen.AcarboncostoflessthanUSD50to100atoncanmakehydrogen-basedsteelproductioncompetitiveinmanylocationsduetothesignificantemissionsof1.85tonsofCO2pertonofsteelproducedfromcokingcoal.Steelcouldaccountforabout4%ofhydrogendemandin2030whiledrivingnearly20%ofemissionsreductionsthatyear.Power:Hydrogenwillenableearlydecarbonizationofcurrentfossil-fueledpowergenerationassetsthroughblendinginnaturalgas,displacingfossilfuelssuchascoalandnaturalgas.viHydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyStrongmomentum,butaUSD540billioncapitalgapremainsuntil2030Thehydrogenindustryshowsstrongmomentumaroundtheglobe,withmorethan520projectsannouncedin2021,up100%comparedto2020.Theseannouncedprojectswilltranslateinto18MTofcleanhydrogensupply(accountingforUSD95billion)aswellasinfrastructure(USD20billion)andend-uses(USD45billion).Consideringinvestmentstoachievegovernmenttargetsandsupportequipmentvaluechains,thetotalsumofestimatedspendingwillgrowtomorethanUSD600billionby2030.Althoughthepipelineofprojectsisstrong,asignificantgaptothenetzeroscenarioremains,andtherightregulatoryframeworkisrequiredtoturnprojectsfromconceptsintoactualinvestments.Outofthecurrentlyannounceddirectinvestments,onlyUSD20billion(13%)havepassedthefinalinvestmentdecision(FID)sofar,withanotherUSD64billion(40%)inthefeasibilityorfront-endengineeringanddesign(FEED)stage.Thismeansmanyproposalsareonthetableawaitingtherightregulatoryframeworktounlockdemandandinvestments.Intermsofadditionalinvestments,thecurrentlyannouncedprojects(USD160billion)covernearly25%oftherequiredUSD700billiontoachievethedeploymentlaidoutinthisreport,outofwhichUSD300billionisrequiredforhydrogenproduction,200billionforinfrastructure,and200billionforhydrogenend-uses.ThisleavesagapofUSD540billion.Whilesignificant,theseinvestmentlevelsappearpossible:TheUSD700billionrequiredequatestoaboutathirdoftheinvestmentsmadeinrenewableenergyfrom2010through2019d,orlessthan15%ofcumulativeinvestmentsinupstreamoilandgasinthesametimeframee.CalltoactionAtremendousaccelerationhastakenplaceoverthepastyearwithstronggrowthinthenumberofprojectsbeinglaunched,demonstratinghydrogen’smanypotentialusesarerecognizedintheindustry.However,afive-foldincreaseinannouncementsisrequiredtoenablethefullabatementpotentialofhydrogen.Theconversionofthismomentumintorealdeploymentandscale-upnowcriticallydependsontherightregulatoryframework,whichwillcreatedemand,enablesupply,andreduceinvestmentrisks.Hydrogen’sfullpotentialcanonlyberealizedifactionistakenacrossthreefrontsto:stimulatedemand,enableaccessthroughinfrastructure,andcreatescaletobringdowncostsandclosetheeconomicgapofhydrogendecarbonizationsolutionsversusconventionalalternatives.Whiletheoverallinvestmentrequiredislarge,itiswellwithintheorderofmagnitudeofcurrentfinancialflowsintotheenergysector.a.Abatementof7GTCO2fromuseofcleanhydrogenisequivalenttoabout20%ofCO2emissionsin2050,assumingannualemissionswouldbe35gigatonCO2.b.Assumes340EJfinalenergydemandin2050(IEANetZeroby2050),considershydrogendemandexcludingpowersectorc.27TWnewrenewablegenerationcapacityrequireduntil2050accordingto‘NetZeroby2050’bytheIEAd.Globalinvestmentsintorenewableenergyfrom2010to2019amountedtoaboutUSD2.6trillionaccordingtoUNEnvironmentProgramme(UNEP)e.Globalinvestmentintoupstreamoilandgasfrom2010to2019amountedtoaboutUSD5.7accordingtoIEAWorldEnergyInvestmentviiHydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyIntroduction93countrieshaveadoptednet-zerotargets39countrieshaveadoptedhydrogenstrategies8HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyGrowingawarenessoftheneedfordecarbonizationWithclimateurgencynowpressing,stakeholdersaremakingcommitmentstorapidlycurbemissions,demonstratingasignificantshiftinsentimentandsenseofurgency.Ninety-threecountrieshaveintroducednet-zerotargets1,and55countrieshavecarbontradingschemes.Morethan1,300corporationshavecommittedtotheScience-BasedTargets2asofthefirstquarterof2021,includingcommitmentsfrommorethan20%oftheworld’s2,000largestcorporations.Increasingly,stakeholderssuchasgovernments,industries,andconsumersarerecognizingthathydrogencouldandshouldplayacentralroleinmeetingclimatetargets.Agrowingnumberofcountrieshavesetpathwaystotaphydrogen’sdecarbonizationpotential.Thirty-ninecountriesarecoveredbygovernment-backedhydrogenstrategies,includingtheEUandanother12countriesoutsidetheEU3,whileseveralothersaredevelopingstrategiesorconsideringdoingso.TheHydrogenCouncilnowcounts129members,upfrom60in2020,representingUSD7.6trillioninmarketcapitalization,6.9millionemployeesglobally4,andrevenuesofUSD4.5trillionin2020.5Urgentnear-termactionsmustbetakentomeetclimateobjectivesandpreventout-of-controlglobalwarming.Theworldiscurrentlynotonapathtowardnet-zeroin2050,andhumanityisatapivotalpointinitshistory.Atthecurrentemissionrateofabout43GTofCO2emittedin2019,withaCOVID-19induceddipin2020toabout40GT,theremainingcarbonbudgetof420GTofcarbondioxide(CO2)through20506–consistentwitha1.5-degreescenario–willbeexhaustedby2030unlessdrasticemissionreductionsareinitiatedinthecomingdecade.Thesolutionrequiresthefullarsenalofdecarbonizationsolutions,includingenergyefficiency,theelectrificationoftransport,industrialuses,andapplicationsinbuildings,biofuels,carboncaptureandstorage–andcleanhydrogen.Thetimetoactandaddressthisunprecedentedchallengeofglobalwarmingisnowandthecomingdecadewillplayacriticalroleinmakingitpossible.Cleanhydrogenisoneofthemostversatileandcost-efficientdecarbonizationvectors.Itssystemicroleiscriticaliftheworldistoachievethedecarbonizationofhard-to-abatesectorsandenablethewideruptakeofcomplementarydecarbonizationefforts.Buildingahydrogendemand,abatement,andinvestmentperspectiveTheHydrogenCouncil’sreportfromJanuary2020,“PathtoHydrogenCompetitiveness,”demonstratedhydrogencouldbecomeacost-competitivedecarbonizationsolutionacrossmanysectorsinthecomingdecade.Themorerecent“HydrogenInsights”publicationsshowacontinuedaccelerationinmomentumforhydrogen.However,whileinterestinhydrogeninitsmanyconfigurationsandusesisstrong,asignificantstep-upininvestments,commitments,andsupportiveregulatoryframeworksmusthappentoachievesuccess.Whiletherolehydrogencouldplayiscleartomany,significantuncertaintyremainsregardingthemagnitudeoftheinvestmentsrequiredinthecomingdecadetoenableacleanhydrogeneconomytocontributetothenet-zeroemissiontargets.1Includes14EUmemberstatesthathavenotannouncedtargetsbutfallunderEU’soverarchingnetzerotargetby2050.AllianceofSmallIslandStates(AOSIS)hasonbehalfofits37memberstates(asdefinedbytheUN)committedtonetzeroby2050.2AsoffirstQ12021,upfrom1,009attheendofyear2020.3Countrieswithagovernment-backedhydrogenstrategy:Australia,Canada,Chile,China,theEU(covering27memberstates),Japan,NewZealand,Norway,SouthAfrica,SouthKorea,UnitedKingdom,UnitedStates,andUzbekistan.4AsofOctober2021.52020revenues.6ThecarbonbudgetincludesallanthropogenicCO2emissions.9HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyExhibit1–Framingfor‘HydrogenforNet-Zero’Thispublicationlaysoutanambitiousyetrealisticpathtonet-zeroin2050(seeExhibit1)andexaminestherolecleanhydrogencouldplayintheenergytransitionfromnowthrough2050.Itaddressesaninformationgapbyprovidinganindustry-derived,holisticperspectiveonhydrogenanditscriticalroleasacost-efficientdecarbonizationsolution.Itnotonlylaysouthydrogen’spotentiallong-termrolebutalsodescribeswhatmusthappeninthecomingdecadetoreachthenet-zerotargets.Thisperspectiveprovidesauniquebasisforindustryandgovernmentstomakeinformeddecisions,prioritize,andinitiatethenecessarytransition.TheHydrogenCouncilMembers(Exhibit2)andMcKinsey&Companyco-authoredthisreport.HydrogendemandandCO2abatementCurrentmomentumInvestmentsrequired&gapPPeerrssppeeccttiivveeontherolehydrogencanplayinaNetZeroworld2050,andhhiigghhlliigghhtt(realistic)sstteeppsstthhaattmmuussttbbeettaakkeenniinntthheeccoommiinnggddeeccaaddeeHydrogenforNetZero……isdevelopingaambitious,yetrealistic,pathtoNetZeroin2050Currenttrajectory(BAU)HydrogenforNetZeroAAmmbbiittiioouuss,,yyeettrreeaalliissttiicc,,ppeerrssppeeccttiivveeonhydrogen’sroleonthepathwaytoNetZeroin2050iinnlliinneewwiitthhtthheePPaarriissAAccccoorrddTTeecchhnnoo--eeccoonnoommiiccooppttiimmuummfor‘whatwouldneedtohappen’,thatisuunnccoonnssttrraaiinneeddbypolicyframework,supplychainlimitations,andinvestmentsrequiredCCoonnttiinnuuaattiioonnooffccuurrrreennttttrraajjeeccttoorryyandtrends,withlimitedemissionreduction-wweeffaaiillttoommeeeetttthheePPaarriissttaarrggeettssNetZero(Unconstrained)Focus10HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyExhibit2–HydrogenCouncilMembersReportstructureThepublicationexploresmultipleaspectsofthehydrogeneconomyandisstructuredinthefollowingfourchapters:Chapter1(Demandforhydrogenanditscost-andcarbon-cuttingrole)addressesthe2050long-termdemandpotentialofcleanhydrogenacrossapplicationsandregions,thecleanhydrogensupplymix,CO2abatementpotential,andhydrogen’ssystemicroleinconnectingmultipleindustriessuchaschemicalsandpower.Chapter2(Scalinguntil2030iscriticalformeetinglong-termtargets)exploresthehydrogendemandgrowthtoward2030,therequiredchangestohydrogensupplymix,hydrogen’smid-termabatementpotential,aswellaswhichsectorsaremostlikelytoreachscalefirst,thusenablingthefullhydrogeneconomyacrossabroadersetofend-useapplications.Chapter3(Hydrogenmomentumandrequiredinvestments)considerscurrenthydrogenmomentumintermsofannouncedprojectsandinvestments,comparingittotheinvestmentsacrossthevaluechainandregionsrequiredtoscalehydrogen.Itidentifiestheinvestmentgap,whichisthedifferencebetweenannouncedandrequiredinvestments.Chapter4(Actionisrequired)describestherolehydrogenshouldplayintheenergytransition,whatisneededtounlockcleanhydrogenatscale,andgivesacalltoactiontoregulatorsandtheindustry.ThefocusisonEurope,NorthAmerica,China,JapanandKoreatogether,andtherestoftheworld.Thereportconsiders39sub-sectorsacrosstheexistinghydrogenindustry,newindustryuses(e.g.,steel),mobility,heating,andpower.Adescriptionoftheanalyticalmethodologyunderlyingthereportcanbefoundintheappendix.11HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyDemandforhydrogenanditscost-andcarbon-cuttingrole1660MTp.a.cleanhydrogenrequiredin2050toreachnet-zero–upfrom90MTtoday22%ofCO2abatementrequiredintheyear205012HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyTherolehydrogencan–andshould–playinachievingnet-zerotargetshasbecomeincreasinglycleartoregulators,industryleaders,andend-consumers.Theworldneedsrapidemissionsreductionsandcleanhydrogenhasacrucialroletoplay,particularlyinhard-to-abatesectors.Thischapterprovidesaperspectiveonhydrogen’slong-termroleintheenergysystemthrough2050anditsbroaderroleinenablingaccesstoattractiverenewableresourcesandincouplingsectors.Itdescribesthelong-termpotentialofcleanhydrogendemandacrosssegmentsandregions,thecleanhydrogensupplyscale-uprequired,aswellashydrogen’sabatementpotential.Hydrogenisacriticaldecarbonizationvectorandcanconnectandreshapecurrentpower,gas,chemicals,andfuelmarketsHydrogencanplayafundamentalroleinenablingcountriesandindustriestomeettheirnet-zeroemissiontargetsby2050.Whilenotinitselfthesolutiontoabateallemissionsacrosssectors,hydrogenuniquelycomplementsandenablesotherdecarbonizationpathwayssuchasdirectelectrification,energyefficiencymeasures,andbiomass-basedfuels.Inanet-zeroworld,demandforcleanhydrogen7couldreachapproximately660millionmetrictons(MT)in2050,makingup22%ofthefinalenergydemandglobally(Exhibit3)andavoidingannualemissionsof7gigatons(GT)ofCO2.Thisannualabatementpotentialof7GTin2050isequivalenttoabout20%oftheemissionsiftheworldremainsonitscurrentglobalwarmingtrajectory.8By2050,cleanhydrogencouldabateacumulativetotalof80GTofCO2–abouttwicethecurrentamountofannualanthropogenicemissions.The80GTcumulativeCO2abatementpotentialthrough2050constitutesabout11%9oftheemissionsreductionsrequiredtostaywithinthecarbonbudgetof420GTneededtolimitglobalwarmingto1.5-1.8degreesCelsius.Exhibit3–Globalhydrogendemandbysegmentuntil20507Cleanhydrogenisinthispublicationdefinedaseitherrenewableorlow-carbonhydrogen;Renewablehydrogenreferstohydrogenproducedfromwaterelectrolysiswithrenewableelectricity,whilelow-carbonhydrogenreferstohydrogenproducedfromfossilfuelreformingwithcarbonsequestration.8Assumes35GTanthropogenicemissionsin2050incurrenttrajectory.9Considerstheshare80GTCO2abatedfromhydrogenintermsofcumulativeemissionsfrom2021to2050,subtractingtheremainingcarbonbudgetof420GT.205038520306602040902020140Hydrogenend-usedemandbysegment,MThydrogenp.a.1.IEAnet-zeroscenariowith340EJfinalenergydemandin2050.HHVassumed.Excludingpower.PowergenerationMobilityBuildingandindustryheatNewindustryfeedstockExistingindustryuse22%ofglobalfinalenergydemand1660MThydrogenrequiredp.a.in2050fornet-zero1.IEAnet-zeroscenariowith340EJfinalenergydemandin2050.HHVassumed.Excludingpower.13HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyHydrogen’sprimaryroleintheenergytransitionisthatofacost-efficientdecarbonizationvectoracrossmanysectors,particularlythoselesssuitedfordirectelectrification.Hydrogenapplicationsincludeavarietyoffeedstockuses,suchasammoniasynthesisforfertilizerproductionandironreductionforsteel;fuelformobility,includingthedirectuseofhydrogeninheavy-dutyvehiclesandhydrogen-basedfuelsorliquidhydrogenforuseinmaritimeandaviationapplications;heating,includinghigh-gradeheatinindustryandbuildingheat;andpowerapplicationslikeseasonalbalancing,backupgeneratorsandblendinginexistingbaseloadpowerplants.Hydrogen’sroleintheenergysystemHydrogenalsoplaysacriticalroleinenablingahigherdegreeofelectrificationandastrongerpenetrationofrenewablepowergenerationtobuilddecarbonizedenergysystems.Hydrogen’sversatilityenablesittostoreenergyoverlongperiodsandprovideenergysystemresiliencybymakingsystembalancingpossible.Itcanfacilitatethetransportofcleanenergyoverlongdistancesviapipelinesandshipping,thusunlockingpreviouslyuntapped“stranded”renewablesresources.Furthermore,itcanreshapecurrentchemicals,fuels,andmetalproductionsectorsandconnectthemwiththepowerindustry.Thissystemicroleofhydrogenmakespossibleaholisticandhencefasterandmorecost-effectivedecarbonizationacrosssectorsandregions.Energystorage:Hydrogencanstorelargeamountsofenergyoverlongperiodstobetappedasrequired,forexample,inundergroundsaltcaverns.Suchusesmightincludeprovidingheatingduringunexpectedlycoldwintersorensuringsteadyhydrogensupplyatindustrialplants.Ifpipelinesareavailable,hydrogencanbestoredthrough“linepacking,”i.e.,increasingthepressureinthepipelinestostoreahighervolumeofhydrogenandstrengthenthesecurityoftheenergysupply.Energysystemresiliency:Hydrogenprovidesenergysystemresiliencyinmultipleways.Itenablescontinuousgridoperationbybalancingpeaksandtroughsindemand,storingpowerwhenexcesslow-costenergyisavailableandreleasingitwhenneeded.Furthermore,itsupportsthediversificationofenergyresourcesacrossgeographies,enablingtheuseofthemostattractivecost-effectiveresourcesratherthanoverbuildinglocally.Itfuelsbackupgeneratorsrequiredtoensurethepowersupplyforessentialfacilitieslikedatacentersandhospitals.Energytransmission:Hydrogencanmovecleanenergyfromareaswithattractiveenergyresourcestoareaswithlessattractivedomesticresources,enablingbothregionalandglobalenergytransmission.Withinaregion,pipelinesandtruckscandistributehydrogen.Pipelinescantransmitsignificantamountsofenergy,about10to20timesmorethanelectricitytransmissiongridsandensurethecost-competitiveprovisionoflargevolumesofenergyoverlongdistances.Forinstance,pipelinescouldtransmitenergyfromtherenewablerichsouthofEuropetonortherndemandcenters.Pipelineswillalsoberequiredtosupplyhydrogentolarge-scaleindustrialuserssuchassteelandammoniaplantswhereon-sitehydrogensupplyisnotavailable.Truckswithcompressedorliquidhydrogencancost-competitivelysupplydistributedend-userssuchasrefuelingstations,remotegenerators,constructionsites,orsmallerindustrialcustomers.Forlongerdistances,hydrogencanbeshipped.Itcanconnectlow-costhydrogenproductionregionslikeAustralia,LatinAmerica,andtheMiddleEasttodemandcenterssuchasEurope,theWesternUS,Japan,andKorea.Itcanbeshippedaseitherpureliquefiedhydrogenorconvertedintoothercarrierssuchasammoniaorliquidorganiccarrierstobeuseddirectlyinend-useapplicationsor“cracked”backintopurehydrogen.14HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyUnlockinguntapped“strandedrenewables”:Hydrogencanenableextremelycompetitiveyetotherwiseuntapped“stranded”renewableenergypotentialinremote,thinlypopulatedlocations.Theserenewableresourcesoftenexistinhighvolumesandquality(i.e.,highloadfactorsandlowcost),buthavebeeninaccessibleuntilnowbecauseoftheinfeasibilityofbuildingelectricitytransmissionlinestodemandcenters.Hydrogenenablestheenergysystemtotapintotheseresourcesandtransmitthemtodemandcenterswithlessattractiveenergyresources,ultimatelytransferringlow-cost,cleanenergytowhereitisneeded.Itcanthusacceleratetheenergytransitionandavoidshortagesinrenewableenergydeploymentbyprovidingaccesstopreviouslyinaccessibleresources.Sectorcoupling:Beyondthesesystemfunctions,hydrogenconnectsindustriesinnovelways.Becausehydrogencanconvertelectricityintogasandotherend-products,itcanconnectandultimatelyreshapecurrentgas,power,chemicals,andfuelmarkets,withcleanenergyatthesourceoftheseapplications(Exhibit4).Cleanhydrogenusedinsteelproductionorfuelforaviation,forexample,ultimatelyoriginatesfromrenewableenergy,naturalgas,orbiogaswithcarboncapture.Hydrogenconnectsthecleanpowerandenergymarketwiththemetals,fuels,chemicals,andpetrochemicalindustries,expandingthebordersofpreviouslydistinctlyseparatesectors.Forinstance,ammonia–todayusedforfertilizerproductionorotherindustrialapplications–couldplayamajorroleasafuelformaritimeorpowergeneration,orasacleanenergycarrierfortheglobaltransmissionofcleanelectronsintheformofcleanmolecules.Exhibit4–HydrogenpathwaysintheenergysystemAmmoniasynthesisElectrolysisGasrefor-mingWaterRene-wablesMethane/biogasHydrogenGridpowerCrackingaftertransmissionIronspongeFertilizerMaritimefuelCarbondioxideStoredRefiningSynfuelforaviationGroundmobilityHeatingFuelPowerStorageTransportFeedstockEnergycarrierCleanhydrogenproducedfrom“stranded”renewablesusedasreductantinsteelproduction-ortofuelshipsandtrucksChemicalsandenergysectorsarecoupled-chemicalsbecomeenergycarriersorfuelsNote:Selectedexamples–notexhaustiveIronoreNitro-genCO2Cleanhydrogenproducedfrom“stranded”renewablesusedasreductantinsteelproduction-ortofuelshipsandtrucksChemicalsandenergysectorsarecoupled-chemicalsbecomeenergycarriersorfuelsNote:Selectedexamples–notexhaustive15HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyTomeetnet-zerotargets,long-termhydrogendemandshouldreach660MTin2050Thelargestend-usesegmentsforhydrogenin2050willlikelybemobility,industrialusesofhydrogen,includingfeedstockandheating,andheatingforbuildings,togetheraccountingfor90%ofthetotaldemandof660MT.Mostofthegrowthwillcomefromnewusesforhydrogen,whichwillaccountformorethan540MTofdemandin2050.Therearemultiplemajorsub-sectors:Mobility.Mobility,accountingforabout19%ofglobalemissionstoday,willbethelargestsinglehydrogenend-usesegmentwith285MTofhydrogendemandin2050.Thesectorincludeshydrogenapplicationswithingroundmobility,maritime,andaviation.Somemobilityend-uses,suchaslong-rangeflightsandcontainerships,areamongthemostchallengingsectorstodecarbonize,andhydrogenincombinationwithbiofuelsofferstheonlyscalablepathwaytofullydecarbonizethese.Withingroundmobility,hydrogenhasanimportantroletoplay.Groundmobilitycontributesabout15%ofglobalemissionstoday,includingthosefromheavytrucks,regionaltrains,long-rangepassengervehicles,andcoaches.Hydrogencomplementsdirectelectrificationthroughbatteriesinusecasesthatrequirelongranges,highuptime,andswiftrefueling.Heavy-dutytrucksareexpectedtobethelargestconsumerofhydrogenlong-termduetotheirhighmileageandpowercharacteristics,requiring110MTofhydrogenin2050toabate13GTofCO2.Maritimeandaviation,whichgenerateabout4%ofglobalemissionstoday,arebothhigh-power,long-rangeend-usesandwillpartlyrelyonhydrogen-basedfuelstodecarbonizecost-efficiently.Liquidhydrogenorhydrogen-basedfuelssuchasammonia,methanol,ore-methanearethemostpromisingcleanfuelsforfulldecarbonizationofthemaritimesector.Aviationwillbecomeamajorconsumerofsyntheticfuels(e-kerosene),basedonhydrogencombinedwithCO2frombiogenicsourcesordirectlycapturedfromtheair,aswellasliquidhydrogenforshort-rangeintracontinentalflights.Together,thesetwoend-useswillaccountfor110MTofhydrogendemand,abating13GTofCO2through2050.Existingfeedstocks.Hydrogentodayplaysanintegralroleinfeedstockapplicationslikeammonia,methanol,andrefining,andcleanhydrogenisrequiredfordecarbonization.Together,theseusescompriseabout2%to3%ofglobalemissions.Cleanhydrogentodecarbonizetheseapplicationswillaccountforabout15%ofdemandin2050(about105MT),downfrommorethan90%today.Steel.Steelisoneoftheworld’shighestCO2-emittingindustries,accountingforabout8%ofglobalannualemissionsduetotheuseofcokingcoalintheblastfurnaceprocess.Steelmakingisoneofthemostchallengingsectorstoabateduetofewalternativedecarbonizationpathwaysandreliesonhydrogenforfulldecarbonization.Steeldecarbonizationrequires35MTofdemandforhydrogenin2050,resultingin12GTofemissionsavoidedthrough2050.Power.Poweraccountedforabout30%ofglobalemissionsin2019.Thekeydecarbonizationsolutionwithinpowergenerationisexpandingrenewableenergygenerationcapacity.However,solarandwindpowerisinherentlyvolatile,andtheenergysystemwillrequirebothshort-andlong-durationbalancing.Hydrogenhasacrucialroleindecarbonizingthefinal1%to3%ofdemandinafullydecarbonizedgrid,becauseitcanprovidelong-durationandseasonalstorage,aswellaspeakshaving,andwillbecriticalforstabilizingthegrid.In2050,hydrogenforgridpowergenerationcouldaccountfor65MTofcleanhydrogen.16HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyAromatics.ThedecarbonizationofBTX(benzene,toluene,andxylene)productioniscurrentlyataveryearlystage.Hydrogen-basedaromaticsproductionroutes,suchasmethanol-to-aromatics,whichcombinescleanhydrogenwithCO2frombiogenicsourcesorcapturedfromtheair,arecurrentlyunderdevelopmentandtesting.Industryplayersexpectaromaticswilldecarbonizeinlinewiththerestoftheeconomy,acceleratingafter2030whentechnologyreachescommercialscale.In2050,hydrogendemandformethanol-to-aromaticscouldaccountforabout40MT,althoughthisishighlyuncertain.Ifusedforplasticsproduction(e.g.,nylon),BTXcanactasacarbonsinkbystoringcapturedCO2forlong-durationstorage.Ifbiogenicorair-capturedCO2isusedandtheplasticisnotincinerated,low-carbonBTXcancontributetonegativecarbondioxideemissions.Industryheat.Industrialheatingaccountsforsignificantemissionstodayduetotheextensiveuseofcoalandnaturalgas,particularlyforhigh-gradeheatsupply.Multipledecarbonizationpathwaysexist,includingbiomass,directelectrification,post-combustioncarboncaptureandstorage,andhydrogencombustion.Hydrogenhasakeyroletoplayindecarbonizingindustryheat,inparticularforhigh-gradeheat(temperaturesabove400degreesCelsius)applicationssuchascementplants,glassmaking,andaluminumremelting.In2050,demandforhydrogeninindustrialheatcouldaccountforabout70MT,mainlyinhigh-gradeheatingapplications.Buildingheat.Heatingforresidentialandcommercialbuildingsaccountsforabout5%ofglobalemissionsandisoneofthelasthydrogenend-usestoscaleduetothesignificantinfrastructureinvestmentsneeded,asitwillrequireahydrogenpipelinedistributionnetwork.Blendinghydrogeninexistingnaturalgasgridscoulddevelopasanearlysteptowardfullyhydrogen-readypipelinenetworks.In2050,buildingheatcouldaccountfor40MT,mainlyinregionsthattodayusenaturalgasforheatlikeEurope,partsofChina,andtheUS.However,significantuncertaintiesremainregardingtheroleofhydrogensolutionsinthissectorandcostcompetitivenessversuselectrifiedsolutionssuchasheatpumps.Chinalikelythelargestsinglemarketforcleanhydrogenin2050Acrossregions,China,Europe,andNorthAmericawillbethelargestconsumersofhydrogenglobally(Exhibit5).In2050,hydrogenwillbeamajorpartofenergymarketsacrossgeographies,enablingsomecountriestoexploittheirnaturalresourcesandreducetheirrelianceonimportedoilandgaswhiledecarbonizingvarioussectors.Australia,LatinAmerica,andtheMiddleEastwilllikelybecomemajorexporters.China,theworld’slargestconsumerofprimaryenergy,shouldbecomethelargestsinglemarketforcleanhydrogenin2050,withabout200MTofdemand.EuropeandNorthAmericawillfollow,accountingfor95MTofcleanhydrogeneach.Europehassignificantdecarbonizationmomentumacrossindustries.Hydrogenshouldplayamajorroleinmeetingthetargetsacrossfeedstock,industryenergy,mobility,andpower.InEurope,cleanhydrogendemandisexpectedtobepartiallysuppliedbyimportsandscale-upproportionallyearlierthaninothergeographies.InNorthAmerica,theworld’ssecond-largestconsumerofenergy,hydrogenwillplayamajor>7xgrowthinhydrogendemanduntil205017HydrogenforNet-ZeroHydrogenCouncil,McKinsey&Companyroleinensuringalow-carbondomesticenergysupply,buildingonattractiveresourcesforrenewablepowerproductionaswellaslow-costnaturalgasandabundantcarbonstoragesites.JapanandKoreawillrequireabout35MTofhydrogenin2050,themajorityofwhichwillbeimportedrenewableorlow-carbonhydrogen.Althoughmanyconsiderthesemarketshydrogenfront-runnersandthecountriesthemselvesviewhydrogenasacorepartoftheirenergystrategies,thesewillberelativelysmallmarketscomparedtoChina,Europe,andNorthAmerica.OtherregionslikeSouth-EastAsia,Oceania,MiddleEast,andLatinAmericawillaccountforabout235MThydrogendemandin2050.Whilemanyofthesemarketshavebeenslowertoadopthydrogenatscaleinnewend-usescomparedwithfrontrunnerssuchasEurope,Japan,andKorea,theyhavealreadyseenactivityonthisfront.Severalcountrieswithintheseregionshavedevelopedhydrogenstrategiesorareintheprocessofdevelopingsuchplans.Therehavealsobeenmovestodeveloptheirexportpotentialbyleveragingattractiverenewableandlow-carbonenergyresourcestoproducelow-costhydrogen.Exhibit5–Hydrogendemandbyregionin2030and2050Hydrogenend-usedemandbyregion,MThydrogenp.a.PowerExistingindustryuseMobilityNewIndustryusesHeating25203020509520302050103520020302050405020302050235203020509520NorthAmericaEuropeChinaJapan&KoreaRestofWorld18HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyCleansupplyiscriticaltofulfillinghydrogen’sroleasadecarbonizationvectorFulfillinghydrogen’sroleasadecarbonizationvectorwillrequireasignificantscale-upofcleanhydrogensupplythrough2050tomeetthenet-zerotargets.Theindustryneeds690MToflow-carbonandrenewablehydrogensupplytomeethydrogendemandof660MTin2050duetolossesinthesupplychain,suchasthosefromconversionstoorfromcarriers,leakageinpipelines,orboil-offfromliquidhydrogenstorageordistribution.Today,mosthydrogenisfossil-based(grey);overthelongerterm,thiscapacitywilleitherbedecommissionedorconvertedintorenewableorlow-carbonhydrogen(Exhibit6).Low-carbonhydrogenwillbethemostcost-competitivemid-termsolutioninmultipleregions,andmostofthecapacitybuiltduringthecoming10to15yearswillbelow-carbonhydrogen.Longer-term,renewablepowergenerationcapacitywillhaveexpanded,andrenewablehydrogenwillbecomethemostcompetitivesourceofhydrogeninmostregions.Inthedecadebetween2040and2050,renewablehydrogenwilllikelyaccountforthelargestshareofcapacity.Low-carbonhydrogenwillaccountforabout20to40%ofsupplyin2050,theequivalentof140to280MTofhydrogensupply.Thisamountstoabouttwotothreetimestoday’sgreycapacityandwouldrequireinfrastructuretostoreabout1to2.5GTofCO2ayear.Renewablehydrogenwillaccountfor60%to80%ofsupplyor400to550MTofhydrogen.Suchavolumeofrenewablehydrogenwillrequire3to4TWofelectrolysiscapacityandabout4.5to6.5TWofrenewablecapacitydedicatedtohydrogenproduction.Incomparison,thisisabouttwotimesthetotalrenewablegenerationcapacityof2.8TWinstalledthrough2020.Astep-upinrenewablegenerationinstallationsisrequirednotonlyforhydrogenproductionbutalsoforthebroaderelectrificationofsociety.About27TWofrenewablepowerwouldberequiredinanet-zeroeconomyin2050–theestimatedelectrolyzerbuildoutwouldrequireabout20%ofthiscapacity.Renewableandlow-carbonhydrogenarecomplementary.Buildingoutbothsupplypathwayswillenabletheuseofthemostattractiveresourcestodecarbonizecost-efficientlyandrapidlyacrosssectorsandregions.Ifallthehydrogenweretocomefromrenewablepower,about5.5TWelectrolysiswouldberequired,withabout8GWofrenewables.Similarly,supplyingthedemandwithonlylow-carbonhydrogen,about5.5GTofannualcarbonstoragecapacitywouldberequired.Combiningthetwosourceswillleadtolowerenergysystemcostsoverallandafastertransition.Relyingonasinglepathwayforcleanhydrogensupplymayslowthenecessaryscale-upasitrequiresanevenswifterramp-upofvaluechainsandprojectdevelopments,hinderingthenecessarydecarbonizationtoreachthenet-zerotargets.Zerogreyhydrogenin205019HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyExhibit6–HydrogensupplymixovertimeCleanhydrogenhassignificantabatementpotentialthrough2050Fromnowthrough2050,hydrogencouldprevent80gigatons(GT)ofcumulativeCO2emissions,asmuchaseighttimeswhatChinaemittedin2019orequivalenttoabout11%oftheabatementrequiredtolimitglobalwarmingto1.5-1.8degreesCelsius(Exhibit7).Theannualcarbonabatedfromtheuseofcleanhydrogenannuallyin2050couldbearound7GT,orabout20%ofannualanthropogenicemissionsiftheworldremainsonitscurrenttrajectory.Abating7GTofCO2emissionsequalsremovingallpassengervehicles,trucks,andbusesfromtheroadandremovingallaviationindustry,orabatingnetemissionsfromtheUS,Japan,andGermanyin2019.Hydrogensupplybyproductionmethod(indicative)MThydrogenp.a.Source:HydrogenCouncilDecarbonisationPathwaysGreyRenewableLow-Carbon~30%ofgreyhydrogenconvertedtocleanin203020HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyIndustryandmobilitywillaccountformostofthispotentialwithover6GTofCO2abatedin2050,orcumulativeabatementof70GTCO2through2050.Foraviationandmaritimesectors,hydrogen-basedfuelsaretheonlyviableat-scaledecarbonizationoption,withsignificantpotentialforhydrogentoabate13GTofCO2by2050.Chemicalsandsteelwillprovideanotherthirdoftotalhydrogenabatementpotentialthrough2050,decarbonizingrespectively20%and35%ofemittedCO2in2050inthecurrenttrajectory.10Exhibit7–Globalemissionsabatedbyhydrogenuntil205010Assumes35GTofanthropogenicemissionsin2050onthecurrenttrajectory.-60-80-400-20TransportationHeatingNewindustryfeedstockExistingindustryuseRoadtransportAviationMaritimeOthertransportBuildingsIndustrySteelAmmoniaRefiningPowergenerationCO2abatedfromhydrogenend-use,GTCO2cumulativeuntil205020202050304045352580GTcumulativeabatementby20507GTp.a.abatedin2050,with~4GTCO2p.a.in204021HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyScalingthrough2030iscriticalformeetinglong-termtargets275MTp.a.cleanhydrogenneededin2030tobeontracktonet-zero–approximatinggreyhydrogenproductiontoday30%ofgreyhydrogencapacityphasedoutuntil203022HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyThepotentialforhydrogenasasignificantdecarbonizationleverisclear.However,positioninghydrogentoavoid80GTofCO2emissionsby2050willrequireactiontoday.Foundationalinvestmentsareneededrapidlytoscaleupthevaluechaintorealizehydrogen’slong-termpotential,asareclearregulatoryframeworksthatenablethetransition.Industrymustalsobewillingtoinvestinthecomingdecadetoachievethetargets.Thischapterdescribeswherestakeholdersneedtoscaleuphydrogendemandandsupplythrough2030toenableitsfullCO2reductionpotentialandachievenet-zeroemissionsin2050.Itdescribesapathwayforgrowthincleanhydrogendemandacrosssectorsandregions.Furthermore,itconsiderstherequiredsupplymixoflow-carbonandrenewablehydrogen,includingthephase-outofgreyhydrogen,aswellashydrogen’sabatementpotentialthrough2030.Needed:75MTofcleanhydrogenby2030foranet-zero2050Inthisnet-zerovision,demandforhydrogenwouldreach140MTin2030(anincreaseof50MTinthecomingdecade)ofwhich75MTwouldbecleanhydrogen(Exhibit8).Althoughthisisambitious,itisbothachievableandnecessary.Growthinhydrogendemandmustaccelerateinmultiplesub-sectorsandregionstoreachtherequiredcleanhydrogendeployment.Byscalingupinmultiplesectorsandgrowingdemandinnewhydrogenend-uses,thecostofhydrogensupplywilldecline,andsupportinginfrastructurewillproliferate.Thisdevelopmentisnecessarytoenablefurtheruptakeofcleanhydrogeninapplicationsthatarelesscompetitivetoday.Cleanhydrogendemandgrowththrough2030willdifferacrossend-usesegments,withthelargestcontributionfromapplicationswithinexistingfeedstocks(13MTofnewdemand,and25MTofgreycapacityconvertedtogreen),mobility(18MT),power(11MT),andsteel(6MT).Withinexistingfeedstocksandindustryuses,ammonia,refining,andmethanolaccountfornearlyalltheabsolutegrowthindemand.Inmobility,trucksareexpectedtocontributeroughly40%ofvolumes,followedbymaritimefuels(about5MT),andaviation(about4MT).Steelmakingwillbeoneofthesinglelargestsub-segmentsforcleanhydrogenin2030,withearlygrowthcenteredinEurope.23HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyExhibit8–Hydrogendemandgrowthfrom2020to2030EarlygrowthwillcenterinEurope,JapanandKorea;ChinaandNorthAmericaneedtofollowcloselyEarlygrowthinhydrogenwilllikelycenterinEurope,Japan,andKorea.Combined,theywillrepresentabout20%oftotalhydrogendemandin2030.ChinaandNorthAmerica,togetherrepresentingnearlyhalfofgreyhydrogendemandtoday,willfollowclosely.Combined,thesefourregionswillaccountformorethan60%oftheglobalhydrogenmarketin2030,and70%ofglobalcleanhydrogendemand.Europe.Europeiscurrentlytheregionwiththemostactivityinhydrogen,with50%ofannouncedprojectsandabout35%ofannouncedinvestmentvolume.Thereissignificantmomentumacrossallsectors.Examplesincludecleansteel,whereEuropeaccountsforthemajorityofallannouncedcapacity,mobility,existingfeedstock,andpowerandheating.Thephase-outofgreyhydrogenisexpectedtobethefastestinEurope,withgreycapacityrepresentingonly25%ofhydrogenproductionin2030duetotheeliminationofabout50%ofgreycapacity.Phase-outsoffreeallowancesunderETS,availableincentivesforreconversions,andtheintroductionofacarbonbordertaxadjustmentwilldrivethischange.JapanandKorea.HydrogenplaysamajorroleintheenergystrategiesofbothJapanandKorea,withanestimated35to40MTofhydrogendemandin2050.ThecountriesplaceastrongfocusonimportedcleanhydrogenfromtheMiddleEastandAustralia,bothregionswithattractiveenergyresources.Hydrogeninpowerandmobilityarecentralpillarsofthestrategy,withearlyplanstoblendammoniawithcoalforpowergeneration.Analystsalsoexpectthetwocountriestohavethehighestsharesoffuel-cellvehiclesales.Globalhydrogenendusedemandbuild22002200--3300,MTp.a.6MobilityPowergeneration90Newindustrialuse2020ExistingindustrialuseHeating20301113184140Moderategrowthinhydrogenforammonia,methanol,andrefiningSteelproductionviatheH2-DRI-EAFroutegrowssignificantlyTruckslargestsub-segmentat~40%ofvolume,followedbymaritime&aviation(~20%each)Earlyadoptionofhydrogenforhigh-gradeindustryheatandblendingwithgasforbuildingheatHydrogenadoptionthroughammoniablendingwithcoalandpilotsforpurehydrogenandblendinginturbinesPowerHeatingMobilityNewindustrialuseExistingindustrialuse24HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyChina.Chinahassethighambitionstobealeaderinhydrogen.Todayitisthelargestconsumerofhydrogenandafront-runnerinhydrogen-fueledtrucksandbuses,withabout40MTofdemandexpectedin2030(upfromabout25MTtoday).ChinastarteddevelopingthecleanhydrogeneconomyafterEuropeandJapanandKoreabutisacceleratingfast.TheChinesegovernmentconsiderscleanhydrogenacentralpillarofitsfutureenergystrategytodecarbonizetheeconomy,createjobs,andbecomeatechnologyleaderinequipmentformobilityandhydrogenproduction.NorthAmerica.NorthAmericaisthesecond-largestconsumerofhydrogentoday,withstrongmomentum,particularlyinthecoastalstates.Theadoptionofcleanhydrogenwillbelowerthanintheleadingregions,yetsignificantdemandgrowthisexpected,from17MTtodaytoabout25MTin2030–growthof50%.NorthAmericaiswell-positionedtoproducebothlow-costrenewableandlow-carbonhydrogen,yetpricesofotherfuelsarelow.Therearefewerregulatoryincentivesonthefederallevelthan,forinstance,inEurope(althoughsomestateshavestrongincentives,e.g.,LCFS11),resultinginslowerhydrogenadoption.Restofworld.Demandincountriesoutsidethefourmainregionsisexpectedtodevelopslowerduetolessregulationandmomentumaroundhydrogen.However,manyofthesemarketsareexpectedtobecrucialinmeetinghydrogendemandinhydrogenhubssuchasEurope,JapanandKorea,asevidencedbylargehydrogenexportprojectsannouncedintheMiddleEast,LatinAmerica,andOceania.Low-carbonandrenewablehydrogensupplymustexpandtosupporttheenergytransitionOfthe75MTofcleanhydrogensupplyrequiredin2030,about25MTshouldcomefromconvertedgreycapacityandabout50MTfromnewbuiltrenewableorlow-carbonhydrogen(Exhibit9).Toachieveclimatetargets,productioncapacityadditionsmustbecleanhydrogenfornewdemand,withagradualphase-outofcurrentgreyproductioninexistingusestowards2030.Exhibit9–Cleanhydrogendeploymentbysectorin203011LowCarbonFuelStandardsMethanolAmmoniaRefiningConventionalotherTransportSteelPowergenerationHeating203075Cleanhydrogenendusedemandin2030,MThydrogenp.a.11.Greyhydrogenconversionby2030:50%(EU,Japan,Korea),30%(NorthAmerica)and20%(China,MiddleEast,RoW)NewdemandConversion1GTCO2cumulativeabatementuntil20301.Greyconversionby2030of:50%(EU),40%(Japan,Korea),30%(NorthAmerica)and20%(China,MiddleEast,RoW)25HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyPhase-outofgreyhydrogen.Existinghydrogenusecasessuchasammonia,methanol,andrefiningwillseebothagrowthindemandof13MTofcleanhydrogenfornewcapacitycomingonline,aswellastheconversionof25MTofexistinggreycapacityintocleanhydrogen,resultinginademandfornearly40MTofcleanhydrogenby2030.Theconversionofexistinggreyhydrogencapacityinexistingplantsisamajordecarbonizationleverandoneofthekeynear-termopportunitiestorapidlyscaleupcleanhydrogensupply–inturnloweringcostsandmakingcleanhydrogenmorecompetitive.Thepaceofconversionandphase-outwilldependontechnicalcomplexity,thecostofswitchingtocleanhydrogen,aswellastheregulatoryenvironmentandeconomicincentives.Refiningistheeasiesttoconvertfromgreytocleansinceitrequiresnoadditionalequipment,followedbyammoniasynthesis,whichneedsanairseparationunittoensurenitrogensupply(ifrenewablehydrogenisused).Methanolisthemostcomplexduetotheintegratedsyngas-basedproductionprocess.Costisacentralelementoftransitioningfromgreytocleanhydrogen,wherethelattercarriesapremiuminthenearterminmostregions.Regulatoryincentivessuchascarbonprices,taxcredits,orblendingmandateswillcontributetoclosingtheeconomicgap,andheavilyinfluencethepaceofgreyhydrogenphase-outinconventionalindustryfeedstockapplications.CO2prices,ifsufficientlyhigh,willactasaprimaryeconomicdriver.However,expectationssuggestthatmostregionswillrequireadditionalpoliciessuchasblendingmandates,forinstance,REDII12inEurope,toacceleratedemandforcleanhydrogen.By2030,regionssuchasEuropeorJapanandKoreaarelikelytoimplementamoresupportivepolicyenvironmentforgreyhydrogenphase-out,whichwouldresultinalargershareofgreyphaseoutinthesemarketsrelativetoothermarketssuchasChina.Newhydrogendemand.Decarbonizationisthemainreasonforemployinghydrogeninnewusecasessuchasmobilityandsteelmaking,andthoseshouldnotbemetwithgreyhydrogen.Thegrowthinhydrogendemand–fromabout90MTtodayto140MTin2030–willresultinlargedemandforcleanhydrogeninthesesectors.Thegrowthofnewusecaseswillrequirenearly40MTofcleanhydrogenin2030,equaltoabouthalfoftotalcleanhydrogendemand.Buildingout75MTofcleanhydrogenby2030willrequiresignificantinvestmentsinrenewableandlow-carbonhydrogenproductionequipmentandinfrastructure.Thisanalysisexpectsthatrenewablehydrogenwillaccountforabout20to30MTin2030,whilelow-carbonhydrogenwillbeabout45to55MT.Bothrenewableandlow-carbonhydrogenmustplayaroletosettheworldontracktonet-zeroin2050.Cleanhydrogensupplyisakeyingredientinahydrogeneconomyandensuringamplesupplywillbecriticaltoreachinggoals.Renewablehydrogen.Supplyingabout20to30MTofrenewablehydrogenwouldrequire200to250GWofelectrolysiscapacity,withannualelectrolyzerinstallationsreachingabout45GWin2030.Thisiswellabovetheroughly90GWcumulativecapacityannouncedtodayandwillrequireelectrolyzermanufacturerstoscaleupproductionlinesrapidlytobeabletomeetthedemand.Thenewelectrolyzercapacitywillrequireabuildoutofrenewableenergysources;about300to400GWofnewsolar,wind,andhydrocapacitydedicatedtohydrogenproductionwillbeneededby2030,assumingthesesourcessupplyalldemand.Consideringtheprojectedincreaseinrenewablecapacityis7.3TWinanet-zeroscenariofromtodayuntil2030,renewablehydrogenwouldrequireabout5%ofthiscapacity.Suchabuildoutofrenewablecapacityisambitiousbutrequiredtoenablebroaderelectrificationofsociety,includingsufficientrenewablehydrogensupply.12RenewableEnergyDirective226HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyLow-carbonhydrogen.Avolumeof45to55MTlow-carbonhydrogenisneededtoenabletherequireduptakeofcleanhydrogenandtheannualabatementpotentialof730MTofCO2in2030.Low-carbonhydrogenenablesamorerapidphase-outofgreyhydrogenasexistingplantscanberetrofittedwithadditionalcarboncaptureequipment,limitingtheinitialinvestmentneeded.Thedeploymentoflow-carbonhydrogenrequiresinfrastructuretotransmitthecapturedCO2toundergroundstoragesites.Scaling-uplow-carbonhydrogencomplementsrenewablehydrogenandallowsforrenewablepowergenerationcapacitybuildup–ifonlyrenewablehydrogenweredeployed,theelectrolyzervolumeneededwouldbeabout600GW,supportedbyabout1TWrenewablegenerationcapacity.Suchascale-upofrenewablegenerationandelectrolysiswouldbeextremelychallengingandmayheavilydrawonstill-scarcerenewablepower,thusrequiringstrongercommitmentsandanevenfasterscale-upofsupplychains.Phase-outofgreyhydrogenThepaceofgreyhydrogenphase-outdependsontheregulatoryenvironment.Torapidlyaccelerategreyphaseout,acarbonpriceisrequiredaswellasothersupportingpolicies,suchasblendingmandatesforcleanfuelsorammonia.Withoutpoliciestosupportgreyhydrogenphase-out,industrycommitmentsandconsumerpressurewillbethemaindrivers,whichwilllikelynotmeetthenet-zerotarget.Currenttrajectory:Underthecurrenttrajectory,somegreyhydrogenproductioncapacitywillconverttorenewableorlow-carbon,drivenbyindustrycommitmentsandconsumerpressure,resultinginabout10%conversionthrough2030.Acceleratedtransition:InaworldwithCO2costsofabout50to100USDaton,about30%ofgreyhydrogenwouldconverttoclean,withhighersharesinregionswherecleanhydrogenproductioncostsarelowestandexistingplantsallowforcost-effectiveconversionwithlimitedcomplexity.Highestambition:Conversionof50%ofcurrentgreycapacityisfeasiblewheresufficientlyhighcarbonpricesarecombinedwithselectedincentivestodecarbonize.PoliciessuchasREDII/REDIIIinEuropeandtheLCFSinCaliforniaareexamplesofpoliciesthattargetsuchuses.30%50%0-20%Note:Rapidaccelerationofgreyphase-outdependstoalargeextentoncarbonprice,asmostCCSretroﬁtapplicationsbreakevenat50-100USD/tonCO2.Additionalpoliciesrequiredfornet-zero,suchasREDandswiftphase-outoffreeallowancestoconvertgreyhydrogeninusecaseswhereCO2pricenotsufﬁcientaspolicyinstrument.~50-100USD/tonCO2Mostcost-optimalusecasesconvertgreyhydrogen(e.g.,closetocarbonstorage)100+USD/tonCO2Policyincentives(e.g.,RED,freeallowancephase-out,etc.)driveadditionalconversionLoworzeroCO2costIndustrycommitmentsandconsumerpressuremaindecarbonizationdriversProgressacrossregions(examples)RequiredCO2price&policyUSD/tonCO2Shareofgreyhydrogenconverted,%by2030CurrenttrajectoryAcceleratedtransitionHighestambitionAmbitionlevelNote:Rapidaccelerationofgreyphase-outdependstoalargeextentoncarbonprice,asmostCCSretrofitapplicationsbreakevenat50-100USD/tonCO2.Additionalpoliciesrequiredfornet-zero,suchasREDandswiftphase-outoffreeallowancestoconvertgreyhydrogeninusecaseswhereCO2pricenotsufficientaspolicyinstrument.27HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyCleanhydrogenhassignificantabatementpotentialin2030Cleanhydrogencancontributeasmuchas3.5GTofCO2abatementby2030.Mostofthedecarbonizationwillcomefromindustrialusesinrefiningandammoniaproduction,aswellasfrommobility,primarilyfromheavyroadtransport(Exhibit10).Withinexistinghydrogenuses,theconversionofgreytocleanhydrogeninconventionalusesisacriticalwaytodecarbonizefeedstockindustries,thusavoidingabout1GTofCO2through2030.Itcanalsohelpscaleupthecleanhydrogensupply,makinglow-cost,cleanhydrogenavailablethroughoutthehydrogeneconomy.Theannualabatementpotentialfromcleanhydrogenin2030is730MTofCO2,ornearly2%ofemissionstoday.Thisconstitutesmorethantheemissionsin2019fromtheUnitedKingdom,France,andBelgiumcombined,ortheequivalentoftakingabout200millionpassengervehiclesofftheroad.Largepartsofthisabatementpotentialin2030arefromconventionalindustrialuses(270MTofCO2perannum)andsteel(130MTofCO2perannum).Otherbigcontributorstohydrogen’sabatementpotentialin2030includemobility(180MTofCO2ayear)andpowergeneration(100MTayear).Exhibit10–Hydrogenabatementin2030bysegmentIndustrialheating730ConventionalindustryuseMaritimeSteelTrucksOthertransportCars,BusesAviationPowerBuildingTotalCO2abatementfromcleanhydrogenin2030bysegment,MTCO2in2030IInndduussttrryyHHeeaattiinnggPPoowweerrSource:HydrogenCouncil,McKinseyHydrogenInsights,EUcommissionTTrraannssppoorrtt180MTp.a.400MTp.a.40MTp.a.100MTp.a.28HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyCleanhydrogenmustbedeployedinnewandexistinghydrogenapplicationsGrowthincleanhydrogenwillcomefromexistinghydrogenindustryusesandnewhydrogenapplicationsinmobility,power,steelmaking,andheating.Thefollowingdescribesthehydrogengrowthrequiredtoreach730MTofCO2abatementin2030tobeonthetracktonet-zeroin2050.ExistingconventionalfeedstockAmmoniasynthesisandrefiningwilllikelybecomethefirstoftheexistingusestoconverttocleanhydrogenduetoarelativelyattractivebusinesscaseandlimitedcomplexityinchanginghydrogensupply.Forammoniasynthesisandhydrogenusedinrefining,themaincostdrivertodayisthenaturalgasfeedstock,whichaccountsforabout60%to70%ofthetotalcostofammonia.CarboncostsbetweenUSD50to100atonaresufficienttosequestratealargeshareofemissionsinmostlocations.Methanolsynthesiswilllikelytakelongertodecarbonizeduetothreemainfactors.First,theneedforacleansourceofCO2(fromeitherbiogenicsourcesordirectlycapturedfromtheair),second,thehighercomplexityofalteringthecurrentintegratedsyngas-basedprocess,andthird,theexpectedlargeshareofcapacityingeographieswithlowerimmediatedecarbonizationpressure(e.g.,morethan50%ofglobalmethanoldemandissuppliedfromChina).Today,mostplantsproducethehydrogenon-siteorhaveitdeliveredbypipeline–anecessity,giventhesignificantvolumesrequired.Thisisexpectedtoremaincommonintheindustry,howeverlocationsofnewplantscouldbeinfluencedbythequalityoflow-costrenewableorlow-carbonenergyandcarbonstorageavailable.Inaddition,severalplantsareexpectedtoberetrofittedtocapturetheemittedcarbon,whichwillrequireinfrastructuretotransmittheCO2(e.g.,throughpipelines)andstoreitunderground.Suchinfrastructurewilldevelopinareaswitheasyaccesstocarbonsinksandwithconcentrationsoflargeemittersthatcanbenefitfromit.SteelproductionHydrogen-basedsteelproductionwillaccountfor6MThydrogenin2030,equivalenttoabout90MTof“greensteel”producedperannum–orabout5%ofglobalsteelproductionin2019.Hydrogenistheonlyscalablezero-carbonalternativeforsteeldecarbonization,andwhilerequiringinitialinvestmentstoconverttohydrogen-basedsteelmaking,theuseofhydrogeninsteelisahighlyefficientdecarbonizationlever.Althoughsteelwillonlymakeupabout8%ofcleanhydrogendemandin2030(about4%oftotalhydrogendemand),itwillaccountfornearly20%ofemissionsavoided.Thislargeabatementpotentialforhydrogen-basedsteelmakingstemsfromtheuseofcokingcoalintheconventionalblastfurnaceprocess,whichemitsnearly2tonsofCO2pertonofsteel.Europeisthecenterofearlygrowthinhydrogen-basedsteelmaking,withsignificantactivityongoingintheindustry.Theregionhasannouncedmorethan25MTofcleansteelcapacitythrough2030.Otherregionswillfollow,withsignificantpotentialinChinawhichtodaysuppliesabout60%ofglobalsteeldemand.Hydrogen-basedsteelmakingcanbeverycompetitiveneartermgivenevenrelativelylowcarbonprices.Hydrogen’scompetitivenessinsteelishighlydependentonthecostofcoalandhydrogen,however,acarbonpriceofUSD50to100atonissufficienttomakecleansteelcompetitiveinmostregions.However,convertingasteelplanttohydrogenrequiressignificantinvestments,assteelmakerscannotretrofitablastfurnacetoaH2-DRI-basedconfiguration,whichmayrequireinitialpublicincentivesforconversion.12%offlatsteeldemandproducedfromcleanhydrogen29HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanySteelplantsarelarge;aplantwithanannualcapacityof5MTsteel–equaltoabout0.25%ofglobalsteeldemand–requirestheequivalenthydrogenproductionofabout800MWofelectrolysis.Steelplantsnotonlyrequirehydrogenproducedon-siteordeliveredbypipelinebutalsoaccesstohigh-qualityironore,themainfeedstockinsteelproduction,andscrap.Mostannouncedcleansteelprojectsareplanningtobuildhydrogensupplieson-site,thewayammoniaplantsandrefineriesoperatetoday.GroundmobilityGroundmobilitywillbeoneofthelargestnewend-usesegmentsforhydrogenwithabout10MTofproductionaddedthrough2030.Thiswouldmakemobilitythesecond-largestend-usesegmentforcleanhydrogenin2030.About60%ofthehydrogendemandwithingroundmobilityisfromheavy-dutytruckswithlong-distanceandhigh-powerrequirements.In2030,theshareoftheglobalfuel-cellheavy-dutytrucksalescouldbe11%,whichcouldavoidemissionsofabout60MTofCO2ayearin2030.Acceleratingthedeploymentofhydrogen-fueledvehiclesthrough2030willbeacriticalelementasfarasbuildingtheinfrastructureneeded–andenablingfurtheruptakeofdecarbonizedroadmobility.Hydrogen-fueledpowertrainsshouldbecomecompetitiveforheavy-dutytrucksbetween2025and2035inmostregions–evenrelativetothedieselICEwithexistingdieseltaxationschemes–withnoadditionalCO2priceneeded.Batteryelectricvehiclesarelessattractiveinhighpower/highdemandusecasesduetobatteryweight,rangelimitations,andrechargingtime.Thekeydeterminantofcompetitivenessinheavy-dutytruckusecasesisthecostoffuel.Twofactorswilldrivehydrogencostcompetitiveness.First,deliveredfuelcostsshoulddeclinesignificantlywitheconomiesofscaleinhydrogensupplyandhigherutilizationofinfrastructure.Second,fuelcellsallowforhigherefficiencythaninternalcombustionengines,thusmakingbetteruseoftheenergyinthefuel.Refuelinginfrastructureiscriticaltoenablehydrogenmass-marketadoptioningroundmobility.End-customerswillnotbewillingtopurchasehydrogen-fueledvehiclesunlesstheyhavesecurefuelingavailability.Refuelinginfrastructuremustbebuiltclosetomaintransportationaxesandlogisticscenters.Forinstance,Europehasproposedatargetforahydrogenrefuelingstation(HRS)every150kmtoencouragehydrogenvehicleuptake.Furthermore,cleanhydrogenmustbesuppliedtotheHRSeitherthroughonsiteproduction(requiringlow-costelectricity)ordeliveredfromnearbyproductioncenters.MaritimeHydrogen-basedfuelsformaritimeapplicationswillcontributeasignificantshareofhydrogendemandofabout5MTin2030.Theshippingsectorisoneofthemostchallengingonestodecarbonizeduetohighloadsandlongranges,andsustainablefuelsarelimitedtobiofuelsorhydrogen-basedfuels.Hydrogenforshippingdecarbonizationcanbeeithercompressedorliquefiedhydrogen,orsynthetichydrogen-basedfuelssuchasammonia,methanol,orsynthetic(liquefied)methane.Inlong-distanceshipping,hydrogen-basedfuelsaretheonlyscalabledecarbonizationalternatives,andeachfuelhasdifferentcharacteristics.Itisnotyetclearwhetheronetechnologywilldominate,buttheadoptionofhydrogen-basedfuelsshouldreachabout6%totracknet-zerotargets.Giventhelonglifecyclesofshipsandresultinglonglead-timestoreplacefleets,industrystakeholdersmusttodayplanforthetransitionbydeploying6%ofocean-goingvesselsrunningoncleanhydrogen-basedfuelsin203030HydrogenforNet-ZeroHydrogenCouncil,McKinsey&Company“hydrogen-ready”ships.Enginesmustbeadapted,andportinfrastructuremustsupportthebunkeringofnewfuels.Theeconomicsarechallenginginmaritimeuses,withcarbonpriceswellaboveUSD100atonrequiredforhydrogen-basedfuelstooutcompeteheavyfueloilormarinediesel.Intheshortterm,biofuelssuchasbiodieselandbio-methanolcostlessthanhydrogen-basedfuels,yetresourcesforlow-costbiofuelsarefiniteandarenotsufficientlyscalabletodecarbonizeallshiptransport.Challengingeconomicsaredrivenbythehighercostofhydrogen-basedfuels,aswellasadditionalcapitalexpenditurerequiredtoenableshipstooperateonnewfuels.Newportinfrastructuremustbebuiltaroundtheworldtoenablebunkeringofnewfuelssuchasammoniaormethanol.Thebunkeringinfrastructureshouldideallybeclosetoattractiverenewableorlow-carbonenergysourcestolimittransmissionanddistributioncosts.Compressedorliquidhydrogenapplicationswillrequirededicatedinfrastructuretocompressorliquefyandtransportthehydrogentoend-users.AviationHydrogenforfuelingaircraftwillcontributeabout4MTofcleanhydrogendemandin2030.Theaviationsectorischallengingtodecarbonizegiventhelimitedrangeofalternatives–itrequireseitherbiofuels(whicharefinite)orhydrogen-basedfuels,withfewerpotentialpathwaysthanmaritime.Airtravelcanbedecarbonizedwitheitherpureliquidorhigh-pressuregaseoushydrogen,orsynthetickerosene(e-kerosene)fromcleanhydrogenandCO2frombiogenicsourcesordirectlycapturedfromtheair.Initialdecarbonizationwilllikelybebiofuel-based.However,hydrogenwillberequiredtoreachfulldecarbonization,andspecificblendingtargetsforhydrogen-basedfuelsareunderdiscussion,suchasa0.7%targetforrenewablefuelsofnon-biologicaloriginforaviationinEurope.13Tobeonthepathtoadecarbonizedaviationsector,theinitialadoptionofhydrogen-basedfuelsshouldbeabout1%globallyin2030.Todecarbonizemediumandlong-rangeflights,e-keroseneiscrucialandtheonlyviablepathway.Thisrequireslimitedamendmentstotheaircraftasthecleanfuelhasthesamemolecularstructureasfossilfuel-basedkeroseneandcanbe“droppedin”inthefuelmix.Purehydrogen,likelyintheformofliquidorpotentiallyhigh-pressuregas,isaviableroutetodecarbonizeshorterduration,smalleraircraftthatconductshort-range,regionalintracontinentalflights.Purehydrogeninliquidformwilllikelybethepredominantpathwayduetoitshigherenergydensityrelativetocompressedgas.Twomainpropulsionalternativesforpurehydrogenaircraftexist,fuelcellsorhydrogenturbines,wheretheformerismoreefficient,andthelatterallowsforhigherpowerrequiredtolifttheaircraftofftheground.Thetwotechnologiescanbecombinedinoneaircraft.Theeconomicsarechallenging,ande-kerosenerequirescarbonpricesaboveUSD200atontooutcompeteconventionalkerosene.Higherfuelcostslargelydrivethepooreconomics,withthecostofthehydrogenfeedstockandcleancarbonhavingthebiggestimpact.Withindirecthydrogenuse,settinguptherequiredinfrastructureanddevelopingnewaircraftdesignsareimportantdrivers.13Partofthe‘Fitfor55’proposal100,000returntripsreturnflightsfromNewYorktoLondonrunningone-kerosene31HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyE-kerosenerequiresonlylimitedinfrastructureinvestmentsduetoitsidenticalpropertiescomparedwithconventionalkerosene.Supplyroutesmayneedtobereroutedduetonewconcentrationsofproductioncapacity.However,theuseofcompressedorliquidhydrogenwillrequirededicatedinfrastructure.Thehydrogenmustbecompressedorliquefiedandbroughttotherefuelingsite.Liquidhydrogen,expectedtobethemainformofpurehydrogenusedinaircraft,requiresliquefactionplants,high-volumestorage,andliquiddistributionnetworks(e.g.,distributiontrucksandrefuelingforaircraft).PowerHydrogencanplaymultiplerolesinthepowersector.Itcancoverthebaseload(mainlyinregionswithlimitedrenewablesorcarbonstoragepotential),provideflexiblecapacity,serveaslonger-termstorage,andfuelbackuporremotegenerators.Demandforhydrogeninpoweruseswouldbeabout11MTin2030,largelydrivenbytwosub-segments:ammoniablendingincoal-firedplants,andhydrogenblendinginnaturalgasturbines.Theblendingofcleanammoniaincoal-firedpowerplantsinJapanandKoreaisthefirststepinatransitiontofullyammonia-firedpowerplantsandisacriticallevertodecarbonizethepowersystem.Blendinghydrogeninexistinggasturbinesenablesenergycompaniestoaddupto20%to30%hydrogen(byvolume)inthefuelmix,thusavoidingabout5%to10%ofCO2emissions.Thiswilllikelyoccurprimarilyinmarketswithhighrenewablespenetrationinthegridandastrongdecarbonizationagenda(e.g.,EuropeortheUS).Asmallshareofdemandwillcomefromhydrogenfuelcellbackupandremotegenerators(about0.5MTin2030),wherehydrogenreplacesdiesel,forexample,indatacentersorremotelylocatedtelecomtowers.Long-term,hydrogenwilllikelyplayamajorroleinapplicationslikelong-termstorageandgridbalancing.Initiatingthisramp-upbefore2030isimportant,bothtokickstartdecarbonizationeffortsandtodevelopthetechnologyfurther.Thecostoffuelisthekeydriveringridpowergeneration,accountingformorethan60%to80%ofthetotalcostofpowergenerated.Forhydrogentooutcompetenaturalgasturbinesin2030,highcarbonpricesofaboveUSD100atonarelikelyrequired–hencehydrogengridpowergenerationwillbeusedmid-termwherethereisstrongdecarbonizationpressureandlimitedalternatives.Forgenerators,themaincostdriversdifferbetweenbackupandremotegeneration.Forbackupgenerators,thecapitalexpenditureofthegeneratorsystemisthekeydeterminant,includingthefuelcellandhydrogenstorage,duetolowutilizationratesofonlyhoursordaysinayear.Hydrogen,besidesbiodiesel,istheonlyalternativetodecarbonizebackupgeneratorsbecausebatterieswouldcostmoreandbelesssuitedforlong-termstorage.Forremotegenerators,fuelisthekeycostdriver,includingboththeproductionofcleanhydrogenandthedistancetraveledtotransportittothesite.Hydrogenremotegeneratorscanbethemostcompetitivedecarbonizedalternative,whereon-siterenewableshavelimitedpotentialandon-siterenewableswithbatterystorage,arenotcompetitive.Theuseofhydrogenderivativessuchasammoniaormethanolmaymakeitpossibletobridgesomeofthestorageanddistributionchallenges.However,ahighcarbontaxisrequiredforbothgeneratorapplicationstomakethemcompetitivewithdiesel.Storageinfrastructurelikesaltcavernsisnecessarytoenablehydrogen-to-powerforthegridatscale.Wheresufficientrenewableenergyisavailable,companieswilllikelybuildthehydrogensupplyon-site,orpotentiallydeliveritbypipeline.Insomeregionswithlimitedrenewablespotential,hydrogen(potentiallyintheformofammonia)willbeimportedandrequireinfrastructureforexportandimportbysea.Generatorswillrelyonmerchanthydrogendeliveredascompressedgasorliquidhydrogen.Backupgeneratorusesrarelyrequirefuelandrefillthefuelstoragesystemasrequired.Remotegeneratorendusesarelikelytoberelativelylongdistancesfromsupplyhubsandpipelines,withcostsincreasingthefurtherthehydrogenmusttravel.32HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyIndustrialheatingHydrogen’sroleasafuelforindustrialheatingisclearestinhigh-gradeheatapplicationsthatrequiretemperaturesabove400degreesCelsius,suchascementproduction,aluminumremelting,orothermetalsprocessing.Givenchallengingeconomicsinmostusecases,theadoptionofhydrogeninhigh-gradeheatingprocessesisexpectedtobeabout1%in2030,andclosetozeroforlow-andmid-gradeheatingprocesses.Theadoptionofhydrogeninhigh-gradeheatapplicationswouldresultinabout2MTofhydrogendemand,equivalentto70TWhofenergy.Toillustratethatisenoughtoproduceabout90MTofcementifallhydrogenweredirectedthere14,equaltoallcementproductionin2020intheUnitedStates.Inindustrialheat,hydrogencompeteswithconventionalfossilfuelsourcespurelyonaheat-valuebasis.Tooutcompeteconventionalfuels,low-costhydrogenisneededataboutUSD1akgorlowerinmostcases,oranequivalentpenalizationofconventionalfuels.Forinstance,inEurope,acarbonpriceofaboveUSD120atonisneededforhydrogentooutcompetecoalinacementplant.Industrialplantsthatrequireheatvarybysize,drivingdifferentneedsforinfrastructure.Thelargestplantsthatrequiresignificantvolumes(similartorefineries,ammoniaplants,andsteelplants)willhavethehydrogenproducedon-siteordeliveredbypipeline.Smallerusersthatonlyintermittentlyrequireheatingcouldsourcethehydrogenviadistributiontrucks.However,thiswouldincreasecostanditwouldlikelybepreferabletoeitherproducethehydrogenon-siteorsourceitfromanearbyindustrialclusterthroughapipeline.BuildingheatHydrogen’sroleinbuildingheatismoreuncertainthaninothersegmentssuchassteel,ammonia,andheavyroadtransportdecarbonization.Itisoneofthesectorsexpectedtoscaleupafter2030duetotheextensiveinfrastructurerequiredandchallengingeconomics.Demandforcleanhydrogeninbuildingheatshouldbeabout2MTin2030fromblendinghydrogenintothenaturalgasgrid.Thisissufficienttomeetdemandfromroughly50millionhouseholdsgivena20%hydrogenblend.15EarlyvolumesareexpectedinpartsofEurope,inparticulartheUK,aswellaspartsofNorthAmerica,wherethereisongoingactivityaroundblendinghydrogen.Thecostofhydrogen-basedheatingforbuildingslargelydependsonthecostofcleanhydrogen,aswellasinvestmentsrequiredtodevelopahydrogen-readypipelinenetworkandthenecessaryequipmentinthebuildings,suchashydrogen-readyboilersorcombinedheatandpower(CHP)systems.Thehydrogenroutecanbecost-competitivewithotherlow-carbonalternativessuchaselectricheatpumpsincertaininstances,particularlyinregionswithexistingnaturalgasinfrastructure,highseasonaltemperaturevariation,andbuildingswherethecostofinstallingaheatpumpishigh(e.g.,olderflats).Ultimately,competitivenesswilldependonlocalclimateconditions,theexactinfrastructureupgradesrequired,andthecostsofretrofittingthebuildingsthemselves.Usinghydrogentoheatbuildingsrequiresahydrogentransmissionanddistributionpipelinenetwork.Developmentofthenetworkisexpectedtoaccelerateafter2030,withhydrogenblendingintonaturalgaspipelinesasanearlystep,withupto20%hydrogenvolumeconsideredfeasibleinmostareas.Heatingforbuildingsisacriticalfirststeptowardbuildingouthydrogen-readypipelinenetworks.142.85GJrequiredpertoncementproduced1518,000kWhannualheatingconsumptionforahouse;20%hydrogenblendbyvolumeisequivalenttosupplying7%ofenergyfromhydrogen33HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyHydrogenmomentumandrequiredinvestments3>520large-scalehydrogenprojectsannouncedtodate540billioninvestmentgapuntil2030–outofUSD700billionrequiredUSD34HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyIncreasinglyrecognizedasacriticalrequirementforachievingnet-zerotargetsby2050,hydrogendeploymentmustbescaledupinthemid-termtoreachitsfullpotential.Momentumaroundhydrogenishigh,asdemonstratedbymultipleannouncementsofnewprojectsacrossthevaluechain.Yet,fundingwillneedtoacceleratetoincreasedeploymentandmeettheprojected660MTofdemandrequiredtoabate80GTofCO2toachieveclimatetargetsby2050.Thischapterprovidesanoverviewofthestatusofannouncedprojectsworldwideandassociatedinvestments.Italsoassessestheinvestmentsrequiredtoreachdeploymentof140MTofhydrogen–including75MTofcleanhydrogen–by2030,andthefundinggaptheindustryandregulatorsmustclosetoimplementthedecarbonizationpathwayoutlinedinthisreport.HydrogenprojectmomentumisgrowingInvestmentmomentumisbuilding,with520large-scaleprojects16announcedglobally,representinga100%increasesinceJanuary2021(Exhibit11).Onehundredandfiftyprojectshavebeenaddedinthepastthreemonthsalone.Around70%oftheprojectshaveannouncedfullorpartialcommissioningbefore2030,withtheremaindercomingonlineafter2030ornothavingannouncedacommissioningdateyet.Industryplayershaveestablishedtheavailabilityofsupportoranenablingregulatoryecosystemasprerequisitesforthecommissioningofmanyoftheseprojects.Thenumberofgiga-scaleprojects17hasmorethandoubledfrom17to43inthepastyearwithannouncementsspanningallregions,confirmingthemomentumsurroundinghydrogenisstrong.Thesizeofhydrogengiga-scaleprojectsisalsogrowing,withninerenewablehydrogenprojectsexceeding10GW–alreadyequalingthescaleoftheworld’slargestrenewableenergyprojects–and16low-carbonhydrogenprojectsexceeding0.2MTperannum.16Large-scaleprojectsdefinedasprojectslargerthan1MWorequivalent17Gigascaleprojectisdefinedas>1GWofelectrolysisor>200kilotonp.a.hydrogenproductioncapacity9renewablehydrogenprojectslargerthan10GW16low-carbonhydrogenprojectsexceeding0.2MThydrogenp.a35HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyExhibit11-HydrogenprojectannouncementsAcrossregions,Europeaccountsforthelargestshareofannouncedprojects,followedbyAsiaandNorthAmerica.InEurope,261projectshavebeenannounced,drivenlargelybystrongmomentumingovernmentsupport,nationalstrategies,andambitiousdecarbonizationpolicies.Ofthese,16aregiga-scaleproductionprojects.Inaddition,thereisevidencethatmanyotherprojectsareintheearlystagesofdevelopmentandhavenotyetbeenpubliclyannounced,includinglarge-scalerenewableandlow-carbonprojectsaswellassmallerR&Danddemonstrationprojects.Asia-PacificandNorthAmericahavealsoseenlargegrowthinthenumberofprojects,withatotalof121and67projectsannouncedinthesetworegions,respectively.WithinAsia,Chinaaccountsforroughlyhalfthetotalannouncements,withmultipleprojectsemergingtomeetgrowinglocaldemandandgovernmenttargets.AmongallannouncedprojectsinChina,mostfocusonhydrogenuseinthegroundmobilitysector.Playershavealsoannouncedgiga-scaleprojectsfocusedonhydrogenexportsinOceania,Africa,theMiddleEast,andLatinAmerica;atotalof28exportprojectshavebeenannounced.18Theseareregionswithattractive,low-costenergyresourcesandstrategiclocationstosatisfythegrowingdemandofNorthernhemispherehydrogenhubssuchasEurope,Japan,andKorea.18Ofwhich17haveannouncedcommissioningpriortoorin203043Giga-scaleproduction221Large-scaleindustrialusage51Infrastructureprojects2133Transport74Integratedhydrogeneconomy522261121Europe43OceaniaAsiaandChina67NorthAmericaAnnouncedMW-scaleprojects120MiddleEastandAfrica10LatinAmerica50-100%increasesincelastJanuaryreport100+%increasesincelastJanuaryreport1.Focusonlarge-scaleprojectsincludingcommissioningafter2030,>1000smallscaleprojectsandprojectproposalsnotincluded2.Includes9hydrogenproductionprojectsinChinawithoutannouncedend-useRenewablehydrogenprojects>1GW,low-carbonhydrogenprojects>200ktpaRefinery,ammonia,methanol,steel,andindustryfeedstockHydrogendistribution,transportation,conversion,andstorageTrains,ships,trucks,carsandotherhydrogenmobilityapplicationsCross-industry,andprojectswithdifferenttypesofend-uses1.Focusonlarge-scaleprojectsincludingcommissioningafter2030,>1000smallscaleprojectsandprojectproposalsnotincluded2.Includes9hydrogenproductionprojectsinChinawithoutannouncedend-use36HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyConsideringcleanhydrogenproduction,playershaveannouncedmorethan18MTofrenewableandlow-carbonhydrogenproductionthrough2030–anincreaseofnearly12MTthisyear,andabouteighttimestheprojectionsfrom2019(Exhibit12.Additionalannouncementsincludenearly13MTofcleanhydrogenproductioncapacitywithdeploymentbeyond2030.Thetotalcleanhydrogenproductionvolumeannouncednowexceeds30MT–morethan30%ofcurrentglobalhydrogendemand.Renewablehydrogencapacityaccountsforhalfthetotalannouncedcapacityandislinkedto93GWofannouncedelectrolysiscapacityglobally.Since2020,about40GWofelectrolyzercapacityhasbeenannouncedandannouncedvolumeshavegrownfivefoldsince2019.Exhibit12-AnnouncedcleanhydrogenproductionvolumebypathwayMostoftheannouncedcleanhydrogenvolumeisinEuropeandOceania,togetheraccountingformorethanhalfofthecapacitythrough2030,mostofitfromrenewablehydrogen.NorthAmericafollowscloselywithabout3.5MTofthecapacityannouncedthrough2030,85%ofwhichislow-carbonhydrogen.202022252030272118.22623242829Announced1Mature2Announced1Mature2Low-carbonhydrogenRenewablehydrogen1.Preliminarystudiesoratpressannouncementstage2.Feasibilitystudy,front-endengineeringanddesignstage,finalinvestmentdecisionhasbeentaken,underconstruction,commissionedoroperationalProjectionsfrom2020Projectionsfrom2021Projectionsfrom20191.Preliminarystudiesoratpressannouncementstage2.Feasibilitystudy,front-endengineeringanddesignstage,finalinvestmentdecisionhasbeentaken,underconstruction,commissionedoroperational>30MTcleanhydrogencapacityannounced37HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyAnnouncedcapitalinvestmentsareincreasingThestronggrowthinthenumberofhydrogenprojectsthrough2030impliestotaldirectinvestmentsofUSD160billion(Exhibit13).Mostinvestmentsareinrenewableandlow-carbonhydrogenproduction,accountingforaboutUSD95billion,followedbyend-useapplications(aboutUSD45billion)andtransmission,distribution,andstorage(aboutUSD20billion).Inenduses,mobilityapplicationsandsteelaccountforover75%oftheannouncedinvestments,indicatingparticularlystrongmarketmomentuminthesesectors.Themomentumresultsfromtheincreasingregulatoryfocusondecarbonization,suchasthephase-outoffreeallowancesforthesteelsectorintheEuropeanTradingScheme(ETS),aswellastheattractiveeconomicsofthesehydrogenapplications.Thelowestvolumeofannouncedfundinginvolvespowerandheatingapplications.Heatingrequiresthedevelopmentofhydrogenpipelineinfrastructure,whichwillonlybedevelopedwhenrequiredtosupportgrowingdemandforhydrogenacrosssectors,whilehydrogen-for-powerisatanearlystageofdeployment,withthefirstprojectsfocusedonblendingwithfossilfuels(e.g.,mixinghydrogeninnaturalgasturbinesorammoniablendedasfuelincoalpowerplants).Exhibit13-HydrogenprojectinvestmentsbystageNotonlyareprojectsbeingannounced–theyarealsomaturing.Thepastyearhasseenasignificantincreaseininvestmentsassociatedwithprojectsintheplanningstage–meaningtheyareperformingfeasibilityandengineeringstudies–aswellasprojectswithcommittedfunding.Oftheprojectswithcommissioningdatesbefore2030,nearly100arenowintheplanningstage,accountingforUSD64billionininvestments–upfromUSD18billionin2020.Investmentsinprojectswithcommittedfundinghavemorethandoubled,fromUSD9billiontoUSD20billion.Estimatedinvestmentsinprojectsonlyannounced(i.e.,beforethedetailedplanningstage)havesurpassedUSD75billion,withmanystillwaitingforfundingsupportbeforecommittingdevelopmentcapital.Cleanhydrogensupplyisthemostmature,withapproximately80%and45%oflow-carbonandrenewablehydrogenproductioncapacity,respectively,alreadyintheplanningstageormoreadvanced.DistributionAnnounced76Planningstage1Committed264End-applicationProduction20Directhydrogeninvestmentsuntil2030,USDbillion1.Includesprojectsatfeasibilitystudystage(70%ofinvestment)andatengineeringstudies(30%ofinvestment).2.Includesprojectswereafinalinvestmentdecisionhasbeenmade,alreadyunderconstructionoroperationalProjectsuntil2030,#157981261.Feasibilitystudyoratengineeringstudystage2.Finalinvestmentdecisionhasbeenmade,alreadyunderconstructionoroperationalProjectsinpressannouncementsorpreliminarystudystage.AlsoincludesrequiredinvestmenttoreachnationaltargetsandgovernmentfundingpledgesProjectsthatareatthefeasibilitystudyorfront-endengineeringanddesignstageProjectswhereafinalinvestmentdecision(FID)hasbeentaken,underconstruction,commissionedandoperational1.Feasibilitystudyoratengineeringstudystage2.Finalinvestmentdecisionhasbeenmade,alreadyunderconstructionoroperational38HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyStep-upininvestmentsneededtoremainonanet-zeropathwayWhilethelevelofprojectmomentuminthehydrogenindustryisstrong,reachingestablishednet-zerotargetswillrequireasignificantpush.Achievingtheproposednet-zeropathwayby2050anddecarbonizing22%offinalenergydemandwillrequire75MTofcleanhydrogensupplyanddemandin2030.Toachievethisandassociatedmidstreamandend-useinvestments,theindustryneedstotaldirectinvestmentsofUSD700billionacrossthehydrogenvaluechainby2030(Exhibit14).Theglobalhydrogenshipping,pipeline,localdistribution,conversion,andrefuelinginfrastructurewillrequireinvestmentsofUSD200billionthrough2030,withmorethanhalfininfrastructureforhydrogenmobility(e.g.,refuelingstations).End-usesrequireinvestmentsofUSD200billiontomeetprojecteddemandfornewequipmentandplants.Mobilityandnewhydrogenindustryuse(i.e.,steel)arethesectorsthatwillrequirethelargestvolumesofinvestments,totalingUSD150billion.EstimatedinvestmentsincludingindirectfundingandgovernmentcommitmentsThischapterdescribesthedirecthydrogenannouncementsobservedintheindustry.Thismeasureunderestimatesthetruecommitmentstohydrogenintermsofinvestments.Togetafullpicture,twoadditionalmetricsmustbeconsidered:first,nationalgovernmentcommitmentsortargetsmayexceedthevolumeofannouncedinvestmentsandcreatearealisticexpectationthatfurtherinvestmentswillcomeincertaingeographies.Second,directinvestmentsimplycertaininvestmentsinthesupplychaintoensurecapacitycanbeprocuredandconstructed.Forexample,investmentsinrenewablehydrogenimplyequivalentcapacityinvestmentsinelectrolyzerassemblylines,sub-componentmanufacturingcapacity,andrawmaterialsourcing.Whenincludingthesegovernmentcommitmentsandindirectinvestmenttosupporttheannouncedhydrogenprojects,thetotalestimateofannouncedinvestmentsacrosstheentirevaluechainexceedsUSD600billionthrough2030.Thisincludes:•USD160billionindirectinvestmentinprojects.•USD150billioninadditionalgovernmentinvestmentsrequiredtoreachnationalgovernmenttargetsandcommitments.•USD300billionininvestmentsimpliedfromOEMsandsupplierstosupporttherequireddirectinvestmentsinhydrogenprojectsaswellasgovernmenttargetsalongthesupplychain.Comparedwith2020,thetotalestimatedinvestments–announcedprojects,governmentcommitments,andindirectinvestments–doubledfromaboutUSD300billion.Consideringonlythedevelopmentsinthethreemonthssincethe“HydrogenInsightsJuly2021”publication,totalestimatedinvestmentsgrewbyUSD100billion,or20%.39HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyConsideringtotalinvestmentsrequiredalongthevaluechainfordifferentapplications,includinghydrogensupply,transmissionanddistribution,andend-useequipment,thelargestvolume(USD275billion)isrequiredinhydrogenmobility,ofwhichaboutUSD200billionisingroundmobility.Theexistinghydrogenindustryissecond,withtotalinvestmentsofaboutUSD200billionrequired,ofwhichmorethan70%ofrequiredfundingisforcleanhydrogenproduction,eitherforretrofittingcurrentsupplybyaddingcarboncaptureequipmentorreplacingitwithnewbuiltcleanhydrogensupply.Powergenerationandheatingforindustry,buildings,andnewindustrywillrequireaboutUSD225billionintotal.Exhibit14-RequiredinvestmentsalongthehydrogenvaluechainTransportExistingIndustryusePowergenerationHeatingNewIndustryuse1102754520060HydrogenProductionEnd-useTransmissionanddistributionUSDbn300HydrogenproductionSource:McKinseyHydrogenInsightsGlobalhydrogeninvestmentrequirementby2030(directinvestment,bysector),USDbillionUSDbn200Hydrogentransmission&distributionUSDbn200Hydrogenend-useapplication40HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyDespitethestrongobservedmomentumandprojectannouncements,asignificantinvestmentgapremainsacrossthehydrogenvaluechain.Achievingapathwaytonet-zerowillrequireadditionalinvestmentsofUSD540billionby2030–closingthegapbetweentheUSD160billionofannouncedprojectsandUSD700billioninrequiredinvestments(Exhibit15).Mostoftheprogresssofarhastakenplaceincleanhydrogenproduction,whichhasthehighestamountofannouncedinvestments.However,productionisalsothesegmentwiththebiggestinvestmentrequirements.ThecurrentinvestmentgapisroughlyUSD210billionthrough2030,implyingtheannouncementofonly30%ofneededinvestmentstodevelopnewrenewableorlow-carbonhydrogencapacity.Meetingprojecteddemandinthevariousend-useapplicationswillrequireadditionalinvestmentsofUSD160billion,withthelargestabsolutegapinmobility.NewindustryapplicationssuchassteelwillalsorequiresignificantinvestmentsofUSD35billionforoutlayslikenewH2-DRIplants.However,steelisalsooneofthemostadvancedsegmentsconsideringannouncedinvestments,withabout45%ofrequiredinvestmentsannounced,andhasparticularlystrongmomentuminEurope.Withintransmission,distribution,andstorage,aninvestmentgapofoverUSD170billionremains–constitutingthelargestrelativegap.Investmentsinthispartofthevaluechainarecriticaltoenablingaccesstocost-competitivehydrogensupplies.Examplesincludeconnectingtheregionswiththelowestproductioncoststodemandhubs,developingrefuelinginfrastructureforvehicles,orbuildingpipelinestosupplyindustrialplants.Ifstakeholdersfailtomakesufficientinvestmentsininfrastructure,growthandthesubsequentscale-upofcleanhydrogensupplycouldbehalted.However,infrastructuredeveloperswilllikelyrequirepredictabilityanddemandsignalsthatensuretheutilizationoftheirassetsbeforetheywillinvestinmidstreaminfrastructure.Availableinfrastructureisacriticalcomponentofthemass-marketadoptionofcleanhydrogen.Withoutit,cleanhydrogenwouldbelimitedtoon-sitesupplyuses,andtherequireddeploymentanddecarbonizationwouldnotbeachieved.41HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyExhibit15-InvestmentgapinhydrogenvaluechainsChinaandEuropearetheregionswiththehighestdeploymentambitions.Evenso,giventheirenormousdemandpotential,theyarealsotheregionswiththelargestabsoluteinvestmentgap,accountingfornearlyhalfofthetotalgap.Meetingtherequiredcleanhydrogendemandofnearly20MTinChinaby2030willrequireanadditionalUSD160billion.Thecountryhasonlyannouncedabout10%ofitstotalfundingrequirementsandneedstorampupsignificantlytomeetnet-zerotargets.Inaddition,EuropeneedsadditionalinvestmentsontheorderofUSD90billionby2030–nearlydoublethetotalamountoffundingannouncedthusfarintheregion.About30%ofrequiredinvestmentsinNorthAmericahavebeenannounced;anotherUSD60billionwouldberequiredtobeonanet-zeropathwayin2030,whileJapanandKoreawillrequiremorethanUSD50billiontoclosetheinvestmentgap.TherestoftheworldwouldneedroughlyUSD150billiontodeveloptherequiredsupplyanddemandby2030.AnnouncedandrequireddirectinvestmentsintohydrogenUSDbillionuntil2030AnnounceddirectinvestmentsGap~700Totalneed~540160ProductionTransmission&distributionEnd-use42HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyInvestmentsby2050torivaloil&gasindustrytoday;USD3trillionvaluecreatedTheinvestmentgapthrough2030issignificant.Evenso,ambitionsfor2050aresteep,with690MTofcleanhydrogensupplyrequiredtomeetdemandfor660MTinhydrogenend-useapplications.EstimatesofthetotalrequiredinvestmentarearoundUSD7to8trillionacrossthehydrogenvaluechainthrough2050,generatingaboutUSD3trillionrevenuesin2050acrossthehydrogeneconomy.Whiletheinvestmentsrequiredaresignificant,theyarecomparabletoinvestmentsofUSD5.7trillionmadeinupstreamoilandgasinthepastdecade(from2010to2019).Ofthetotal,morethanUSD2trillionwillsupporthydrogenproduction(excludingenergyproduction)–thekeytoensuringrenewableandlow-carbonhydrogensuppliesacrossdifferentdemandsectors.Ofthetotalinvestmentinhydrogenproduction,about75%willflowtorenewablehydrogenandtheremaindertolow-carbonhydrogen.AdditionalcumulativeinvestmentsofUSD5to7trillionwillberequiredtodevelopthenecessaryrenewableenergycapacity.Conventionalindustrialusesandmobilitywilllikelyrepresentthelargestdemandsegmentsforcleanhydrogen,accountingformorethanhalfoftotalhydrogendemandin2050.Withinallhydrogenend-uses,aprojectedUSD2.5trillionwillbeneededtosupporthydrogendemandapplications,consuming660MTofhydrogenglobally.Energyandinfrastructureplayersmustdevelopat-scaletransmissionanddistributionsystemstoensuretheinterconnectednessofproductionregionswithdemandhubsandallowtradeflowsacrossallcontinents.Withinregions,hydrogeninfrastructuresuchaspipelineswillplayacriticalroleincost-efficientlysupplyinghydrogen.Globally,thisexpansionisexpectedtorequireinvestmentsofaboutUSD3trillionby2050.3trillionannualrevenuesfromhydrogenin2050USD43HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyCalltoaction444HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyHydrogenisacentralpieceofthedecarbonizationpuzzle.Itistheonlyscalableandcost-efficientenergyvectortodecarbonizesectorsthatrequirecleanmoleculesasfuelorfeedstock.Thetimetoscalehydrogenisnow–itisanecessitytomeetthenet-zerotargets.Momentumisstrong;industrialplayersacrossthevaluechainarewillingandeagertoinvestandscalehydrogen,whilegovernmentsacrosscontinentsincreasinglyrecognizehydrogen’scriticalcontributiontodecarbonization.Nevertheless,translatingthemomentumandintentionsintorealdevelopmentsisbecomingincreasinglyurgent.Ifwearetodecarbonizeeconomiesandlimitglobalwarmingto1.5-1.8degreesCelsiusby2050,actionsmusttakeplaceinthecomingdecade–the2050ambitionandpotentialof80GTCO2abatedcannotberealizedunlessthefoundationislaidtoday.Therearethreeimportantleverstounlockhydrogen:Demandforcleanhydrogenmustbestimulatedindifferentsectors,infrastructuremustbedevelopedtoenableend-useraccesstohydrogen,andcostcompetitivenessmustbestrengthenedthroughaccelerationinscale-upofcleanhydrogendeployment(Exhibit16).Exhibit16–HydrogenunlocksandstakeholderrolesEnsureaccessMakehydrogenaccessiblethroughtherightinfrastructureHydrogenmustbeunlockedandscaledGovernmentandprivatesectorhaveimportantrolestoplayCreatedemandIncentivizedecarbonizationthroughcleanhydrogenLowercostCreateeconomiesofscaletoreducecostandopennewmarketsGovernmentsIncentivizethetransitionthroughincentivesandenforcingmechanismsSupporthydrogentoovercometheinitialeconomichurdlestoscaleandbecometrulycompetitivePrivatesectorBewillingtoinvesttocreatethechange-andtakesomeriskSetcommonstandardsandambitionlevelsacrossindustriesandregions45HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyCreatingdemand.End-usedemandwill‘pull’investmentsthroughoutthesystem.Alevelplayingfieldmustbecreatedtoallowforacoordinatedtransitionofdifferentend-usesectors.Companiescanplayarolebypursuingindustry-widetransitioncommitments,whilegovernmentsmustplayarolethroughcreatingtherightincentives,forinstance,byintroducingdirectsupportmechanismsandmandatingquotasortargets.Developinginfrastructure.Upfrontinvestmentsarerequiredtodeveloplarge-scaleinfrastructurethatenablesthedistributionofhydrogenmolecules,suchaspipelinesandintercontinentalcarriercapacity,aswellaslocaldistributionsuchasrefuelinginfrastructure.Suchinfrastructure,whilerequired,mayinitiallysufferfromunderutilization.Itenableshydrogenuseandhelpslowerhydrogencostsbyenablingaccesstoenergyfromuntapped“stranded”renewableassets.Theinfrastructureindustryalsoneedsglobalcoordinationtoenablethesemission-criticalinvestmentsfortheenergytransition.Scalingupproduction.Hydrogendemandwillreachmass-marketadoptiononlywhenlow-costcleanhydrogensupplyisavailable.Itrequiresanunprecedentedscale-upinelectrolysiscapacityandaccompanyingrenewableenergycapacity,aswellasthebuildoutofcarbondioxidetransmissionandstorageinfrastructure.Thesoonertheseinvestmentsingiga-scaleproductionaremade,theearlierhydrogenwillreachcostcompetitivenessandreducetheeconomicgap.Governmentsandtheprivatesectorbothhavecriticalrolestoplayinunlockinghydrogen.Governmentsandregulatorsmustcreatetheright,predictableframeworkstoencouragethetransitionandsupportinovercominginitialeconomichurdles.Theprivatesectormustalsocommittoinvestinginthecleanhydrogeneconomy.Investmentsareneededandsomelevelofriskmustbeaccepted;theenergytransitionmega-trendisnotafad.Companiesshouldbewillingandboldlycommittotransitioningtheenergysystem.Weareatapivotalmoment,andthechancetoactisnow–beforeitistoolate.Ifdonecorrectly,hydrogenwillbecomeoneofthecriticalcleanfuelsandfeedstocksforourfutureworld.TheHydrogenCouncilmemberscommittoacceleratingitsscale-uptodayandaskalltojoininthisplight.46HydrogenforNet-ZeroHydrogenCouncil,McKinsey&Company47HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyAppendix-Methodology,Glossary,Bibliography39hydrogenapplicationsconsidered5regionsmodelled48HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyMethodologyforestimatinghydrogendemand,investments,andabatementpotentialonanet-zeropathwayTheunderlyingenergytransitionscenarioforthe“HydrogenforNetZero”perspectivefollowsatrajectorythatlimitsglobalwarmingto1.5-1.8C,inlinewiththeParisAccordandtherecentIPCC6thAssessmentreport.Thescenarioconsidersemissionconstraintsandassessestherolehydrogencouldplayasadecarbonizationvectoranditscomplementaryrolewithotherdecarbonizationtechnologieslikebiofuels,directelectrification,batteries,andcarboncaptureandstorage(CCS).Otherimportantpremisesincludeanimplicitassumptionthatthemacroenvironmentremainsstable,i.e.,steadyGDPgrowthglobally,nomajorgeopoliticalshifts,andthatcommoditypricesremainstableovertime(i.e.,nolong-termpricespikeorsignificantpricefalllong-term).Further,itisassumedthathydrogentechnologyreachestechnologicalmaturityandcostlevelsaslaidoutinthe“Pathtohydrogencompetitiveness”and“HydrogenInsights”(fromJanuary2021).Thecurrencyused,unlessstatedotherwise,istheUnitedStatesdollar(USD).Thereportconsidershydrogenacross39sub-sectorsinindustry,mobility,heating,andpower.Inadditiontoestimatingthehydrogendemandpersub-segmentthrough2050,thisperspectivealsoconsidersthecarbonabatedusingcleanhydrogen,thechangesinhydrogensupplymixtowards2050,andtheinvestmentsrequiredinthehydrogenvaluechaintorealizethedemandprojections.The“HydrogenforNetZero”reporthasbeenco-createdbytheHydrogenCouncilandMcKinsey&company.Findingshavebeensyndicatedandalignedwiththe129HydrogenCouncilmemberswhohaveprovidedinvaluableindustryinsightandexpertise.DemandprojectionsThepotentialrolehydrogencouldplayisbasedondetailedcostcompetitivenesscalculationspersub-segmentcombinedwithmarketintelligence.Theanalysisestimateshydrogenuptakeforeachofthe39sub-segmentsbyconsideringcost-competitivenessrelativetootherdecarbonizedalternativesperregionlikebatteries,andcarboncaptureandstorage,aswellasconventionalalternativessuchasdieselandnaturalgas.Additionally,theperspectiveconsidersthefeasibilityofneworretrofitfacilitieslikeammoniaplants,andtruckfleets,steelplants,andpotentialsupplychainconstraints.HydrogensupplymixThisperspectiveconsidersthehydrogensupplymixandaddressesboththemixofnew-builtcleanhydrogenproductioncapacity,whichistheshareofrenewableandlow-carbonhydrogen,aswellasthephase-outofgreyhydrogen.Thereportdifferentiatestheperspectiveacrossregionsandovertimeandaccountsforglobalimportandexportdynamics.Itestimatessupplychainlossesthroughhydrogentransmission,distribution,andconversion.Theshareofnewlybuiltrenewableandlow-carbonhydrogenisbasedonproductioncostoptimizationacrossregionsandovertime.Theanalysisreflectsannouncedrenewableandlow-carbonhydrogencapacityinthenear-termbuildoutofcapacity.ImportandexportconsiderstradebetweenmarketswithattractiveconditionsforhydrogenproductionsuchasOceania,LatinAmerica,theMiddleEast,andNorthernAfricatodemandhubswithlimitedlow-costcleanenergyresources–placessuchasJapanandKorea,ContinentalEurope,andpartsofChina.Theanalysisassumesallnew-builthydrogencapacitythrough2050tobecleanhydrogen.49HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyTheconversionofexistinggrey-to-cleanhydrogencapacityvariesacrossregionsandisonlyrelevantforexistinghydrogenapplicationslikeindustryfeedstock(i.e.,ammonia,refining,methanol,andothercurrentindustrialuses).Theconversionrateconsidersregionaldifferences(thecostofrenewableorlow-carbonhydrogensupplyandtheageandstateofcurrentgreyhydrogenproductionplants),theregulatoryenvironment(currentandexpectedpoliciessuchascarbontaxschemesorgovernmentdecarbonizationtargets),andindustrymomentum(announcedconversionandretrofitprojects).CO2abatementpotentialTheassessmentofcarbonabatementpotentialconsiderstheamountofCO2emissionsavoidedthroughtheuseofcleanhydrogen.Othertypesofemissionssuchasparticles,nitrogendioxide,ormethanearenotconsidered.Foreachsub-segment,thecurrentenergymixbyregionservesasabaseline(e.g.,coal-basedhydrogenproductioninChina).Forinstance,H2-DRIsteelproductionreplacescokingcoalusedintheblastfurnaceprocess,whereashydrogen-poweredheavy-dutytrucksreplacethedieselequivalent.TheanalysisaccountsforresidualCO2emissionsfromlow-carbonhydrogenproductionandshowsthenetabatementfromtheuseofcleanhydrogen.AnnouncedhydrogeninvestmentandmarketmomentumThemappingofannouncedinvestmentcoversthreemaincategories:Directprivatesectorinvestments(i.e.,publiclyannouncedprojects),additionalinvestmentsrequiredtoreachstatedgovernmenttargets,andindirectinvestmentsrequiredtosupporttheannouncedprojectinvestments.Thefocusofthisreportisprimarilyondirectprivatesectorinvestments.DirectprivatesectorinvestmentTheestimateofannouncedinvestmentsbuildsonacontinuouslyupdateddatabaseofglobalpubliclyannouncedprojects,withresultsvalidatedbyMembersoftheHydrogenCouncileveryquarter.Thereportcalculatesimpliedprojectinvestmentsusingpublicprojectinformationsuchascleanhydrogenvolume,plantcapacity,andnumberofvehicles.ItcombinesthisinformationwithinvestmentandcostdatafromHydrogenCouncilMembers,collectedandaggregatedbyanindependentthird-partycleanteam,toderiveaviewonannouncedinvestments.Furthermore,itclassifiesprojectsintermsofthreematuritylevels.Operationalprojects,thoseunderconstructionoroneswiththefinalinvestmentdecisionreceivea“committed”classification,whileprojectswithongoingfeasibilityorengineeringstudiesreceivea“planningstage”classification,andtheremainderaretaggedas“announcedonly.”GovernmentproductiontargetsandpublicfundingThereportmapsannouncedgovernmenttargetsandcomparesthemwiththeprojectpipeline(includingannounced,planningstage,andcommittedprojects)toquantifytheadditionalcapacityrequiredtoreachthetargets.ItestimatestheadditionalinvestmentsrequiredbasedoninvestmentandcostdatafromHydrogenCouncilmembers.IndirectvaluechaininvestmentsToquantifythetotalimpliedinvestmentsrequiredtorealizeannounceddirectprivatesectorinvestments,theanalysiscalculatestheindirectupstreaminvestments(e.g.,factories,mines,andcomponentsupply)usingindustryrevenuemultipliers.Ittreatsfuelcellandon-roadvehicleplatformsseparately,withabottom-upestimateofR&Dandmanufacturingcosts.50HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyHydrogenrevenuepoolToquantifythetotalrevenuesgeneratedinthehydrogeneconomy,directrevenuesareconsidered.Thisincludestherevenuegeneratedfromsellinghydrogenmolecules,equipment(e.g.,fuelcells,industrialplants),revenuesfromdistributingthehydrogen(e.g.,globalshippingofhydrogen,refuelingstations,bunkering,andpipelines),aswellasrevenuesfromoperatingandmaintaininghydrogenfacilities.HydrogenvaluechaindirectinvestmentrequirementThisreportpresentsanovelviewofthedirectinvestmentsrequiredtorealizetheprojectedhydrogeneconomy.Itbuildsonthedemandprojections,supplymixperspectives,andrequiredcapitalexpenditures.Itemploysdetailedhydrogenapplicationtotalcostofownership(TCO)modelsandhydrogencostandinvestmentdatacollectedfromHydrogenCouncilMembersthroughacleanteam(pleasereferto“Pathtohydrogencompetitiveness”and“HydrogenInsights”(fromJanuary2021).Theanalysisconsidersthreemainvaluechainsteps:hydrogensupply;transmissionanddistribution,includingstorageandconversion;andend-applications.HydrogensupplyEstimatesincludetheinvestmentsrequiredtobuildoutnewrenewableandlow-carbonhydrogenproductioncapacityintermsofelectrolyzersandnaturalgasreformerswithrequiredcarboncaptureequipment.Further,itconsiderstheinvestmentsrequiredfortheconversionofexistinggreyhydrogenproductioncapacitytoeitherlow-carbonorrenewablehydrogensources.Itdoesnotincludetheupstreamenergyinvestmentsrequiredtobuildoutrenewablepowergenerationunlessexplicitlystated.Theanalysisconsidersaregionalviewofthesupplymix,accountingforimportsandexports,resultinginapositiveornegativedeltabetweendemandandlocalsupplyinaregion.Hydrogentransmission,distribution,conversion,andstorageThereportderivesinvestmentrequirementsfromsegment-specificestimatesaccountingforfiveprimaryhydrogentransmissionanddistributionroutes(includingon-siteproduction,short-andlong-distancetransport).Italsoconsiders15routesintermsofshipping,trucks,orpipelines,aswellas10conversiontechnologiessuchasliquefaction,compression,andotherpathways.Furthermore,itaccountsforinvestmentsinportbuildoutsandstoragefacilitiesintheinvestmentestimates.Hydrogenend-applicationsDownstreaminvestmentsincludeequipmentandplantsrequiredtosupporthydrogendemandacrossapplications.Inmobility,forinstance,fuelcells,hydrogentanks,andrefuelinginfrastructureareincluded.Otherequipmentincludesturbines,generators,plantinvestmentforconventionalindustrialfeedstockusessuchasammoniaandmethanol,andnewhydrogenapplicationslikesteelandBTX.51HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyDefinitionlowcarbonandrenewablehydrogenTherearecurrentlynocommonstandardsfordefiningrenewableandlowcarbonhydrogen.Thisisaconsequenceofthelackofinternationalstandardmethodologyforcalculatingthecarbonfootprintofhydrogenproductionpathwaysandthresholdsforqualifyinghydrogenaslowcarbonthatwouldbeapplied,forexample,acrosstaxonomiesforsustainablefinanceandhydrogencertificationsystems.ThisissueisexploredfurtherinsectionDonenablingpoliciesintheHydrogenCouncil’sreportPolicyToolboxforLowCarbonandRenewableHydrogen.Inthepresentstudyweusetheterms“clean”,“renewable”,“low-carbon”,and“grey”hydrogen,whereby•Renewablehydrogenreferstohydrogenproducedfromenergysourcesofrenewableorigin.Forexample,i)hydrogenproducedthroughwaterelectrolysiswithelectricityofrenewableoriginusedasfeedstock;and/orii)hydrogenproducedthroughthegasificationofsustainablebiomasswhichisthenreformedorpyrolyzed(iftheCO2issequestratedthehydrogenproducedcanbequalifiedascarbon-negative).Definedthresholdsforqualifyinghydrogenasrenewable(intCO2eq/tH2orgCO2/MJ)needtobeputinplace.•Low-carbonhydrogenreferstohydrogenproducedfromenergysourcesofnon-renewableoriginwithacarbonfootprintbelowadefinedthreshold.Forexample,i)hydrogenproducedusingnaturalgasasafeedstockwithSMRorATRcoupledwithCCS;ii)hydrogenproducedthroughpyrolysisofnaturalgasintohydrogenandsolidcarbon;iii)hydrogenproducedthroughgasificationofcoalwithCCS;iv)hydrogenproducedthroughelectrolysisusingelectricityofnon-renewableoriginasfeedstock.Definedthresholdsforqualifyinghydrogenaslowcarbon(intCO2eq/tH2orgCO2/MJ)needtobeputinplace.•Cleanhydrogenreferstorenewableandlow-carbonhydrogen.•Greyhydrogenreferstohydrogenproducedusingfossilfuelsasfeedstock,mainlythroughreformingofnaturalgasorthegasificationofcoal.52HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyDRIDirectreducediron(forsteelmaking)ATRAutothermalreformerBTXBenzene,Toluene,Xylene(commonlydefinedasaromatics)CC(U)SCarboncaptureandstorageorcarboncapture,use,andstorageCHPCombinedheatandpowerEJExajoule,1billionGJETSEmissionTradingSchemeFEEDFront-EndEngineeringDesignFIDFinalInvestmentDecisionGJGigajouleGTGigaton(metric)H2-DRIHydrogenDirectReducedIronLHVLowerheatingvalue(33.33kWh/kghydrogen)MTMillionmetrictonSBTitargetsScienceBasedTargetsSCRSelectiveCatalyticReducerSMRSteammethanereformerSpongeironDirectreducediron(forsteelmaking)TW/GW/MW/kWTerawatt,gigawatt,megawatt,kilowatt(unitofpower,1Watt=1J(Joule)persecond)TWh/MWh/kWhTerawatthour,megawatthour,kilowatthour(unitofenergy,1Watt-hour=3600J(Joule))GLOSSARY53HydrogenforNet-ZeroHydrogenCouncil,McKinsey&CompanyBP.(2021).StatisticalReviewofWorldEnergy2021.Retrievedfromhttps://www.statista.com/statistics/263455/primary-energy-consumption-of-selected-countries/ClimateWatch.(2021).DataExplorerNetZeroContent.Retrievedfromhttps://www.climatewatchdata.org/data-explorer/net-zero-content?net-zero-content-categories=netzero&net-zero-content-countries=All%20Selected&net-zero-content-indicators=nz_status&page=1&sort_col=country&sort_dir=ASCEuropeanCommission.(2021).AlternativeFuelsInfrastructureRegulation.Retrievedfromhttps://ec.europa.eu/commission/presscorner/detail/en/ip_21_3541Energy&ClimateIntelligenceUnit.(2021).NetZeroTracker.Retrievedfromhttps://eciu.net/netzerotrackerIndustrialEfficiencyTechnologyDatabase.(2012).Cement–ClinkerMaking.Retrievedfromhttp://www.iipinetwork.org/wp-content/Ietd/content/clinker-making.htmlIntergovernmentalPanelonClimate.Change(2021).ClimateChange2021,ThePhysicalScienceBasis.Retrievedfromhttps://www.ipcc.ch/report/ar6/wg1/#FullReportJames,B.,DeSantis,D.,Huya-Kouadio,J.,Houchins,C.,&Saur,G.(2018).AnalysisofAdvancedHydrogenproduction&deliveryPathways.Retrievedfromhttps://www.hydrogen.energy.gov/pdfs/review18/pd102_james_2018_p.pdfMcKinseySustainabilityInsights.(2021).EMITdatabasebyMcKinseySustainabilityInsights.REN21.(2021).Renewables2021GlobalStatusReport.Retrievedfromhttps://www.ren21.net/wp-content/uploads/2019/05/GSR2021_Full_Report.pdfTheGlobalCarbonProject.(2020).GlobalCarbonAtlas.Retrievedfromhttps://www.statista.com/statistics/270499/co2-emissions-in-selected-countries/TheGlobalCarbonProject.(2020).TheGlobalCarbonBudget2020.Retrievedfromhttps://data.icos-cp.eu/licence_accept?ids=%5B%226QlPjfn_7uuJtAeuGGFXuPwz%22%5DTheGlobalCarbonProject.(2020).GlobalCarbonAtlas.Retrievedfromhttps://www.statista.com/statistics/270499/co2-emissions-in-selected-countries/TheGlobalCarbonProject.(2020).TheGlobalCarbonBudget2020.Retrievedfromhttps://data.icos-cp.eu/licence_accept?ids=%5B%226QlPjfn_7uuJtAeuGGFXuPwz%22%5DTheWorldBank.(2021).TheWorldbankCarbonPricingDashboard.Retrievedfromhttps://openknowledge.worldbank.org/bitstream/handle/10986/35620/9781464817281.pdfUNEP(UnitedNationsEnvironmentProgramme).(2019).GlobalTrendsinRenewableEnergyInvestment2019.Retrievedfromhttps://www.unep.org/news-and-stories/press-release/decade-renewable-energy-investment-led-solar-tops-usd-25-trillionUSGeologicalSurvey.(2021).USGS–MineralCommoditySummaries2021.Retrievedfromhttps://www.statista.com/statistics/219343/cement-production-worldwide/WorldSteelAssociation.(2020).Steel’scontributiontoalowcarbonfutureandclimateresilientsocieties.Retrievedfromhttps://www.worldsteel.org/en/dam/jcr:7ec64bc1-c51c-439b-84b8-94496686b8c6/Position_paper_climate_2020_vfinal.pdfWorldSteelAssociation.(2020).WorldCrudeSteelProduction–Summary.Retrievedfromhttps://www.worldsteel.org/en/dam/jcr:391fbe61-488d-46d1-b611-c9a43224f9b8/2019%2520global%2520crude%2520steel%2520production.pdfBIBLIOGRAPHY54HydrogenforNet-ZeroHydrogenCouncil,McKinsey&Company55HydrogenforNet-ZeroHydrogenCouncil,McKinsey&Company

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