Insights from the Global Hydrogen Flows—2023 Update: Key Findings and Trends for the Future

McKinsey and the Hydrogen Council have recently released the Global Hydrogen Flows—2023 update, shedding light on the future of hydrogen production, demand, and trade. The report introduces key insights that could shape the hydrogen economy by 2050.

One of the crucial findings from the report is the ample availability of low-cost renewable energy sources and low-carbon hydrogen capacity globally, which could meet or even exceed the 2050 requirements for hydrogen. Additionally, the report suggests that transporting hydrogen through pipelines or in derivative form could lead to significant cost advantages and potentially turn clean hydrogen into a commodity market over time.

The report also highlights the impact of regulatory policies on hydrogen trade, with measures like the Inflation Reduction Act in the United States and the Clean Hydrogen Investment Tax Credit in Canada potentially boosting exports from North America. Furthermore, the European Union’s Renewable Energy Directive mandates a significant percentage of hydrogen products consumed by industries to be renewable by 2030, further driving the demand for clean hydrogen.

Despite the rising costs of renewable hydrogen production, the report indicates that renewable hydrogen will continue to play a crucial role in the market, maintaining a significant market share compared to low-carbon hydrogen from gas. The forecasted demand for hydrogen and its derivatives has also shifted, with a greater volume of clean hydrogen needed to achieve net zero by 2050.

Overall, the Global Hydrogen Flows—2023 update provides valuable insights into the evolving landscape of hydrogen production, demand, and trade, offering a glimpse into the potential future of the hydrogen economy.