What are the barriers to hydrogen growth?
The global hydrogen sector was estimated to be worth $247.4 billion in 2023, with forecasts to reach as high as $410.6 billion by 2030. The UK sector is predicted to be worth around £900 million with the potential to create in excess of 9,000 high quality jobs by 2030. However, given that hydrogen technology isn’t necessarily a new concept, barriers to production and deployment are slowing the industry’s progress.
Firstly, hydrogen is a light gas and can be easily compressed. This makes it potentially dangerous to store and storage units need to be enforced with kevlar and carbon fibres which makes storage solutions expensive.
In addition, fuel cells and electrolysers have material-based barriers which brings about the problems associated with rare earth mining and scarcity. Fuel cells, for example, need platinum in their manufacturing process and electrolysers are reliant on iridium, one of the most corrosive-resistant metals derived from platinum. This means hydrogen production is reliant on expensive rare earth metals.
Finally, energy costs pose a barrier to hydrogen production. Blue, green and pink hydrogen all require significant amounts of energy in their production process, and lowering the costs of renewable and low carbon energy sources is essential for further rollout of hydrogen.
How to grow the hydrogen economy
Presently, there are 52 hydrogen roadmaps across the world that vary in size, ambition, and application. Between 2030 and 2050, the hydrogen sector is anticipated to be worth $8trn, with the technology market taking $1trn of that share. The value chain of hydrogen is about more than just generating more of a single gas, but about improving a market that already exists.
“Today’s gas networks can taken hydrogen, but new pipelines need to be built to support greater quantities,” explains Amer.
“Hydrogen supply chains require greater collaboration and streamlining,” he adds. “You need companies developing the necessary components for hydrogen production to work in collaboration and integrate to develop a more complete hydrogen product. This means collaborative infrastructure projects.”
Another key blocker that exists within the hydrogen industry is skills shortages. Ramping up hydrogen output and servicing large industrial demand means building a qualified, prepared workforce at each stage of the hydrogen process.
“There’s around $570bn in research projects in hydrogen. We need more skills to ensure these are delivered for net zero,” says Amer. “Hydrogen requires a range of skills to be delivered at scale, including project managers, process engineers, financial feasibility experts, assessors, pipeline construction professionals, specialist trainers and more.”
Knowledge Transfer Partnerships (KTPs) and hydrogen school programmes could help instill hydrogen-related skills into a new generation of workers at early stages in their careers and education.
Finally, blending other renewable energy technologies into hydrogen will bolster its potential. A significant chunk of hydrogen’s costs are related to energy, so countries and regions with an abundance of solar, wind and nuclear policy mechanisms and infrastructure in place could use this to generate hydrogen and subsidise the costs. This will also ensure production is sustainable and aligns with net zero ambitions.
To summarise, five key steps to grow the hydrogen industry include:
- Upskilling and education for hydrogen roles.
- Research and development into reducing the costs of rare earth metals essential for hydrogen production processes.
- Leveraging existing \and future renewable energy technology to subsidise energy costs for hydrogen.
- Collaboration across different organisations within the hydrogen supply chain.
- Greater infrastructure to distribute hydrogen and maximise its potential.
