The green hydrogen economy-Quantifying the opportunity in green hydrogen & Hydrogen demand

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Hydrogen on the horizon. Ready, Almost set, Go?


Quantifying the opportunity in green hydrogen


An analysis of the future economics of renewable energy identifies the most promising markets for importing and exporting

Green hydrogen—produced through renewable resources such as solar and wind—holds significant promise in meeting the world’s future energy demands. However, the economics of green hydrogen are challenging today, primarily because the underlying costs and availability of renewable energy sources vary widely. Recently, PwC analysed the green hydrogen market worldwide and identified potential demand growth, cost trajectories per country and the most promising export and import markets. The results give industry leaders guidance on how the future market for green hydrogen could evolve.


Key findings:


  • Demand growth will grow at a moderate, steady pace through niche applications until 2030.
  • After 2030, demand growth will accelerate, particularly from 2035 onward.
  • Hydrogen demand by 2050 could vary from 150 to 500 million metric tonnes per year, depending on global climate ambitions and the development of sector-specific activities, energy-efficiency measures, direct electrification and the use of carbon-capture technologies.

Hydrogen demand dynamics


H2 demand projections vary significantly due in part to different central assumptions in the modelling. Key differences include:


  • development of economic activities,
  • the global energy demand,
  • development of renewable electricity pricing,
  • use intensity within different sectors, and
  • technology deployment, such as electrification or carbon capture and utilization/storage
  • development of the regulatory framework.


Our report with the World Energy Council and EPRI analyses and compares the global H2 demand projections of 15 scenarios from 7 different reports, and sorts each scenario into one of three categories related to the ambition to reduce global temperature rise:


  • Low: >2.3°C global warming,
  • Medium: 1.8-2.3°C global warming, and
  • High: <1.8°C global warming

Long-term development of hydrogen demand

All reports predict a limited but steady growth of hydrogen demand until 2030, for several reasons. First, current hydrogen projects under construction and in operation are, despite growing capacities, almost exclusively at pre-commercial phase and have limited electrolyser capacities, typically well below 50MW. Proposed plants have larger electrolyser capacites of 100MW or more, but those are still small compared to current grey hydrogen production plants. Second, building the infrastructure for large scale hydrogen use, such as pipelines or export/ import terminals, will take many years—it takes seven to twelve years to plan and build a pipeline, for example. Ideally, the required infrastructure will be built in parallel to growing hydrogen demand at falling costs to ensure that by 2030 hydrogen can be traded and transported in necessary quantities. All medium and high ambition scenarios see a stronger hydrogen demand from 2030 and another strong increase from 2035 onwards. To meet the Paris climate targets, planning for infrastructure has to begin now.

Hydrogen demand is related to underlying temperature goals

The standard deviation adjusted hydrogen demand in the various scenarios varies greatly for 2050, with an overall range from 150 to 600 Mt. Based on the temperature targets in the scenarios, larger quantities of hydrogen are needed to achieve more ambitious climate targets. Under the low ambition target of above 2.3°C, hydrogen demand growth will be linear as natural gas continues to be used. Hence, the hydrogen demand in 2050 varies ranges between 150 to 200 Mt.
Aiming to limit the global warming to 1.8-2.3°C by 2050 results in higher demand – between 160 to 490 Mt, with an average growth to around 320 Mt. The wide range of hydrogen demand is due to the different scenario assumptions about the technologies used, e.g. continued use of natural gas, efficiency improvements, direct electrification or CCS.
Striving to meet a Paris Agreement aligned global warming target of below 1.8°C results in a hydrogen demand of 220-600 Mt by 2050, with an average growth to around 350 Mt.

The use of hydrogen

The hydrogen demand breakdown per sectors can vary widely. For the European Union, the expected breakdown, as outlined in the European Hydrogen Roadmap, is 39% of hydrogen usage in the industry sector, 30 % in transport, 26 % in heating and power for buildings and 5 % power generation. For industrialized countries the EU breakdown is likely to be a good proxy to estimate the sector breakdowns.