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Green hydrogen: Big gaps between ambition and implementation

2025-01-14
(Press-News.org) "Over the past three years, global project announcements for green hydrogen have almost tripled," says PIK researcher and lead author Adrian Odenweller. "However, only seven percent of the production capacity originally announced for 2023 has been completed on time during this period." According to the study, the recent problems with the market ramp-up of green hydrogen can be attributed to increased costs, a lack of willingness to pay on the demand side and uncertainties about future subsidies and regulation.

"Enormous additional subsidies of around one trillion US dollars would be required to realise all announced hydrogen projects by 2030," explains Falko Ueckerdt from PIK, "Green hydrogen will continue to have difficulties meeting the high expectations in the future due to a lack of competitiveness." However, permanent subsidies are not a solution. The two researchers therefore recommend using demand-side instruments such as binding quotas to channel green hydrogen specifically into sectors that are difficult to electrify, such as aviation, steel or chemicals. For example, according to an EU regulation, 1.2 percent of all aviation fuels must be blended with synthetic fuels based on hydrogen from 2030. This quota is set to rise to 35 percent by 2050.
 

Subsidy requirements far exceed announced global subsidies

In their study, the researchers quantify three key gaps between theory and practice: the past implementation gap, the future ambition gap and the future implementation gap. The first results from the difference between originally announced hydrogen projects and the projects actually realised in 2023. The ambition gap refers to the discrepancy between the amount of hydrogen that would be required by 2030 according to 1.5-degree scenarios and the projects currently announced by 2030. Although announced hydrogen projects are sufficient for the majority of the scenarios analysed, a wide implementation gap remains: The subsidies required to realise all projects by 2030 far exceed the global public financial support announced to date.

The study is based on a global and manually verified project database with 1232 green hydrogen projects announced until 2030. For each of the 14 designated end uses of the projects, the authors calculate the competitiveness gap between the green product and its fossil competitor. Together with the volume and the timing of the project announcements, this yields the subsidies required to realise all projects by 2030.

The researchers warn against fossil lock-ins, which could tie companies to fossil fuels and thus endanger climate targets. In the long term, a transition to technology-neutral market mechanisms such as carbon pricing is crucial in order to limit public costs and ensure a level playing field with other climate mitigation options. They therefore recommend a robust strategy that supports hydrogen projects in the short term through direct subsidies and demand-side regulation, but is based on realistic expectations for hydrogen.

Article: Adrian Odenweller, Falko Ueckerdt (2025): Green Hydrogen ambition and implementation gap. Nature Energy. [DOI: 10.1038/s41560-024-01684-7]

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[Press-News.org] Green hydrogen: Big gaps between ambition and implementation