According to a study by GlobalData, the global hydrogen industry is expected to grow by 165% throughout 2023 as businesses and regions focus on the transition to green energy. The report suggests that hydrogen production capacity will accelerate this year as countries and businesses enable a quicker shift away from fossil fuels. Hydrogen output is predicted to rise as high as 71 million tonnes by 2030 as industries speed up their efforts to move towards greener fuels.
Hydrogen has become a potential alternative to carbon-emitting fuels across multiple industries due to its adaptability, which could heat our homes or even power aircraft engines. As of last month, over 90% of active and pipeline hydrogen projects were green hydrogen. Hydrogen developed from fossil fuels via coal gasification or steam methane reforming is grey hydrogen. This has been the dominant form of hydrogen production and can be referred to as ‘blue’ if the carbon dioxide emitted during grey hydrogen production is sequestered via carbon capture and storage technologies. There are plans to implement a blend of hydrogen fuels into the UK’s mains gas supply, with the government proposing last year that all boilers in new build properties may have to be prepared to make the change from 2026. Despite the existing global economic environment, the number of investments in low-carbon hydrogen continued to increase from 600 to over 1,700 between the end of 2021 to the end of 2022, according to analysis from GlobalData.
Over 390 hydrogen-focus deals were completed in 2022, representing a massive increase compared to 277 registered deals in the previous year. The value of hydrogen-focused mergers and acquisitions exceeded $24 billion, representing a 288% increase compared to 2021, while venture finance deal values increased five times, reaching over $3 billion. There was, however, a decline in the number of deals during the second quarter compared to 2021, which analysts believe could be related to businesses strengthening their core activities and diversifying investment risk due to the economic conditions. Businesses are continuously developing low-carbon hydrogen using electrolysis, with a new capacity exceeding 1,000 GW in the pipeline. Findings from GlobalData highlight activities with manufacturing companies such as Nel, Hydrogenics Corporation, ITM Power, HydrogenPro, Enapter, Ceres Power and Plug Power. The companies highlighted with the most low-carbon hydrogen capacity include US-based GHI, which is developing storage capacity in salt cavers in Green Hydrogen International. Several businesses in Egypt include the Suez Canal Economic Zone, the New and Renewable Energy Authority and the Egyptian Electricity Transmission Company. Other developers listed in London, like ATOME Energy and Hydrogen Utopia International, have continued developing green hydrogen sites in Paraguay and Poland.
While the establishment of HydrogenOne provides a specialist fund for clean hydrogen investment. GlobalData concluded from their report that the high number of active and proposed hydrogen projects focusing on green hydrogen represents the increasing electrolysis capacity manufacturing and the number of EPC contractors participating in larger green projects. The growth in renewable energy development will generate further momentum to accelerate a reduction in cost across the entire hydrogen value chain.