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The Future of Hydrogen Chapter 6: Policies to boost momentum in key value chains The chapters in this report highlight a wide range of ways in which hydrogen can be produced, distributed and used as part of a changing energy system. Each application of hydrogen could play an important role in supporting clean energy transitions, but also faces significant challenges and competition. This chapter synthesises and summarises the analysis set out in previous chapters. It identifies the next decade as a critical opportunity for scaling up hydrogen technologies and supply chains so that they can fulfil their potential. It then charts the steps that governments, companies and others can take in the near term and in different policy contexts around the world. It identifies particular near-term opportunities for deployment in four complementary value chains, and reviews what policymakers need to do to support them. Governments have a central role to play in setting the overarching long-term policy framework for investment, establishing consensus around national opportunities for hydrogen, and also creating market demand, removing regulatory barriers, directing research and engaging internationally. The chapter concludes with a list of priority next steps. Key findings from IEA analysis Hydrogen is already in use in a number of important sectors. Demand for hydrogen in its pure form is estimated to stand at around 74 MtH2/yr, and industry has already demonstrated that it can be produced, stored and distributed on a large scale. Indeed, as much as 6% of natural gas demand is directed to hydrogen production today, mostly for refining and chemicals manufacture. Almost all hydrogen for industrial use is currently produced using unabated fossil fuels, and demand for cleaner hydrogen remains limited despite previous waves of interest in this topic. However, good reasons are emerging to conclude that this is changing. There is now a greater focus on the deep emission reductions that hydrogen can help deliver, a wider recognition that hydrogen can help to achieve a broad range of policy objectives, a growing awareness that hydrogen can complement expected high levels of renewables in various important ways, and a growing body of experience with low-carbon technologies across the board on which governments and investors alike can draw. Overall, hydrogen’s potential is split between: • Existing applications of hydrogen, where opportunities are available to use hydrogen produced using cleaner production methods and to make use of a more diverse set of energy sources. • A wide range of potential new applications for hydrogen, as an alternative to current fuels and inputs, or as a complement to the greater use of electricity in these applications. In these cases – for example in transport, heat, iron and steel and electricity – hydrogen can be used in its pure form, or converted to hydrogen-based fuels. The number of countries with polices that directly support investment in hydrogen technologies is increasing, with a rising focus on the first of these two types of contribution, but with support for new applications such as road transport as well. Governments have a critical role to play and are working with an increasingly strong and diverse stakeholder community to address key challenges, including: high costs; policy and technology uncertainty; value chain complexity and infrastructure requirements; regulations and standards; and public acceptance. Tackling these challenges is not optional if hydrogen is to get more than a toehold in the broader energy system. PAGE | 168 IEA. All rights reserved.PDF Image | The Future of Hydrogen 2019
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