Focus H2 investments on the Demand Side

Some pretty stark findings in this analysis by BloombergNEF. 

Governments around the world are set to miss their combined 2030 clean hydrogen targets by half, primarily due to a lack of demand off-take. Only 12% of announced clean H2 production capacity that is set to come online by 2031 (approx. 11 million tonnes annually) actually has a confirmed offtaker attached, and just 1.25 million tonnes of this has been sold under binding agreements. 

There is also a concern that the demand for clean hydrogen is higher in newer emerging markets like steel and shipping, compared to some of the markets that need to be “cleaned” most urgently, such as Refining and Chemicals who currently use hydrogen from traditional dirtier, production methods ["grey" and “blue” hydrogen], 

For me it highlights that there's been too much spotlight on investment for the production side of clean H2, without real consideration of the actual demand for such capacities. As the quote below shows, the level of global hydrogen subsidies is astronomical, but just 5% of this capital has gone to the demand side. 

Unless offtakers are incentivised to switch to clean hydrogen, through strong subsidies, then the whole clean hydrogen drive is a non-starter!