Cite report
IEA, IRENA & UN Climate Change High-Level Champions (2023), Breakthrough Agenda Report 2023, IEA, Paris https://www.iea.org/reports/breakthrough-agenda-report-2023
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Hydrogen
State of transition
The deployment of renewable and low-carbon hydrogen is significantly below where it needs to be under a net zero scenario, despite continuing to receive significant interest. More than 1000 hydrogen plants are planned, although greater certainty of policy support and demand is required to move plans and announcements into real projects.
- There has been no significant reduction in total emissions from hydrogen production, due to the slow uptake of low-carbon and renewable hydrogen.
- Average emissions intensity of hydrogen production remains high as there have been no significant changes in the production mix.
- Emissions intensity needs to fall by nearly 50% by 2030, resulting in a 10% reduction in total emissions from hydrogen production.
- Renewable and low-carbon hydrogen remains more expensive than hydrogen from unabated fossil fuels.
- Alongside renewable electricity cost and availability, electrolyser capital cost is an important part of the cost of renewable hydrogen.
- Electrolyser capital cost is expected to decrease through accelerated innovation, scale-up and improved manufacturing techniques, although recent increases in material costs risk slowing down these cost declines.
- Renewable and low-carbon hydrogen has continued to grow since 2020 but remains below 1% of global hydrogen production.
- Total global hydrogen production stood at 95 Mt in 2022.
- Low-carbon and renewable hydrogen production reached 0.7 Mt in 2022, compared with 70-125 Mt/yr required by 2030.
Progress summary
| Area | What progress has been made? | What more needs to be done? | 2023 |
|---|---|---|---|
H1. Standards and certification |
IPHE leading major efforts on methodologies, in partnership with ISO, and increasingly co-ordinating the wider landscape. IEA Hydrogen TCP has set a task on certification harmonisation. Other assessments or relevant work from IRENA and RMI, the European Clean Hydrogen Alliance and the Hydrogen Council. | Prepare a well-articulated plan that defines resource needs for the development of a comprehensive portfolio of standards. Provide appropriate resources to undertake the relevant work on standards development. Governments to work through existing forums to ensure methodologies used to define regulatory frameworks are interoperable. |
|
H2. Demand creation |
Notable individual efforts from countries, albeit lacking international coordination on near-term commitments and policies. The IRENA Collaborative Framework on green hydrogen has established a workstream on understanding how to co-ordinate demand and supply globally. |
Increase the strength of the demand signal by moving from commitments and pledges to contracts and policies. Improve co-ordination of efforts by more countries and companies working through joint initiatives. |
|
H3. Research and innovation |
Commitment to establish a conceptual framework to exchange best practices by COP28. The Hydrogen Valley Platform had identified 83 projects from 33 countries by July 2023. |
Ensure new projects are focused in priority sectors and increase geographical diversity of demonstration projects. Increase efforts to establish proactive knowledge-sharing platforms and processes between lead projects. |
|
H4. Finance and investment |
UNIDO, World Bank and IRENA mapping currently available assistance and financing best practice, to support an improved offer. The Hydrogen for Development Partnership launched by the World Bank, to help catalyse funding for projects in developing countries through providing improved in-country support. |
Governments to work with IFIs to identify projects that are being delayed by high costs of capital and other obstacles to investment, then identify best practices to support targeted and tailored technical assistance for policy design. |
Hydrogen recommendations
- Governments and businesses should provide financial and human resources for the development and implementation of a comprehensive portfolio of national and international standards, based on a well-articulated plan that defines resource needs. Governments should also work towards the adoption of a common methodology to calculate the carbon footprint of the hydrogen value chain to facilitate mutual recognition and interoperability of certification systems. Governments, especially those of developing countries, should anticipate building technical capacity of their national systems to verify compliance with international hydrogen standards.
- Governments and companies should co-ordinate internationally to increase commitments for the use of low-carbon and renewable hydrogen in sectors where hydrogen is already used, supported by specific policies and purchase agreements, to collectively send a strong demand signal and mobilise investment in production. In new priority application sectors, countries should share learning to accelerate early deployment. This should be done in a manner that ensures a level playing field in international trade.
- Governments and companies should work together to dramatically increase the number and geographical distribution of hydrogen demonstration projects and to ensure that these appropriately cover each of hydrogen’s high-value end-use sectors, including maritime shipping, heavy industry and long-duration energy storage. Governments and the private sector should agree on minimum reporting principles to guide a deeper and more rapid sharing of knowledge among these demonstration projects and with the broader stakeholder community, including a commitment to share the lessons learned from all publicly funded demonstration projects.
- Governments, MDBs and relevant technical partners should work to identify viable projects that are being delayed by high costs of capital and other obstacles to investment, then identify best practices to help unlock their progress. This should be supported by appropriate technical assistance programmes to assist governments with policy design for the further scale-up of projects.