account higher hydrogen demand in the hard-to-abate sectors, such as steel or chemicals, substituting current grey hydrogen and new demand generated by new applications and/or products. It is necessary to emphasise that only the ambitious hydrogen demand scenario will enable the achievement of the Paris Agreement goals. As such, efforts should be directed towards immediately providing the suitable conditions for the acceleration of the hydrogen market ramp-up. The development of a ‘hydrogen economy’ is still in its early stages. However, the number of countries publishing hydrogen strategies has increased considerably, demonstrating broadening global interest and support.
To date, 26 countries and the EU have published national hydrogen strategies, with 13 published in 2021 alone. A further 22 countries are currently drafting hydrogen strategies, a number of which should be published in 2022. This reflects a clear acceleration of government interest that is potentially backed by COP26 agreements, which act as a catalyst (see Figure 2).
Hydrogen trade development
The hydrogen market will pass through various development phases, characterised by stakeholder involvement, transportation infrastructure development, spatial expansion levels, and its international trade (see Figure 3). During the initial ramp-up period, there will be ‘hydrogen islands’. Initially, hydrogen will be produced in local projects close to the demand site in order to facilitate technology testing and avoid extra transport costs. These projects will be the result of joint development ventures and industrial parks in which stakeholders combine their hydrogen-related business activities. These islands will have the capacity to meet annual demand of up to 110 TWh if production capacity is built up by 5 GW, targeted in the national strategy by 2030. An example of a hydrogen island is the project ‘HYBRIT’, in which the Swedish steel producer Figure 1. Range of hydrogen demand assessment by 2050 (source: World Energy Council). SSAB, mining company LKAB, and energy provider Vattenfall will cooperate to bring into operation a fossil-free steelmaking plant located in Lulea, Sweden. The pilot plant will produce sponge iron, a crucial ingredient for the steel-making process, while carrying out tests between 2020 – 2024 to determine which production processes are the most efficient. The project aims to introduce the first fossil-free steel to the market by 2026. In the medium-term, a second development trade phase will continue, characterised by hydrogen production in hubs progressing in regional hydrogen markets, accelerating growth in volumes. The hydrogen island will converge towards an integrated EU-wide transportation network. Hydrogen hubs, or clusters of Figure 2. Overview of countries’ activities towards developing a hydrogen strategy large-scale demand, are local (source: PwC). areas where various existing
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GlobalHydrogenReview.com
Spring 2022
