Engaging the Business Community at COP29 – Green Hydrogen

Low-carbon hydrogen  

Hydrogen is a versatile energy carrier, allowing it to play an important role in the decarbonisation of sectors where emissions are hard to abate, such as heavy industry and long-distance transport.  However, currently hydrogen is mainly used in the refining and chemical sectors and produced using fossil fuels such as coal and natural gas, therefore its carbon footprint remains high. Low-carbon hydrogen produced using renewable or nuclear energy via electrolysis is a nascent yet important sector for meeting the goals of the Paris Agreement.

Achieving globally available, affordable renewable and low-carbon hydrogen by 2030, as set out by the Breakthrough Agenda, will require an exponential reduction in the production and use of hydrogen from unabated fossil fuels.  

Stimulating private sector efforts  

The International Energy Agency’s (IEA) Global Hydrogen Review 2024, published earlier in October, shows an overall picture that the investment and projects in low-carbon hydrogen are growing, however policies to stimulate demand in key sectors such as heavy industry, refining and long-distance transport are needed to speed up deployment. 

The report shows that the number of projects that have reached final investment decision has doubled in the past 12 months, which would increase current global production of low-carbon hydrogen fivefold by 2030. The total electrolyser capacity that has reached final investment decision now stands at 20 gigawatts (GW) globally. 

These announced projects, if released, would total production at almost 50 million tonnes a year by the end of this decade. However, this would require the hydrogen sector to grow at an unprecedented compound annual growth rate of over 90% between now and then. 

Further, it highlights that despite new project announcements, installed capacity for electrolysers and low-carbon hydrogen volumes remain low as developers wait for clarity on government support before making investments. Uncertainty around demand and regulatory frameworks has resulted in a large majority of potential production remaining in planning or early-stage development.  

Global production targets set by governments equal 43 million tonnes per year by 2030, but the inconsistency with demand targets, totaling just over a quarter of this, at 11 million tonnes by 2030, makes clear the need for government policies to stimulate demand for low-carbon hydrogen and hydrogen-based fuels. Whilst the report shows that examples such as carbon contracts for difference and sustainable fuel quotas for aviation and shipping, are triggering action on the industry side, it is not sufficient to meet climate goals.

Technology and production cost pressures affect the low-carbon hydrogen sector, with the report drawing attention to the regression for electrolysers due to higher prices and tight supply chains. Cost reductions are driven by technology development, as well as optimising deployment processes and mass manufacturing to achieve economies of scale.   

The Breakthrough Agenda Report 2024 supports this conclusion, noting that progress has been made in developing methodologies for hydrogen production, yet not enough is being done to create demand and establish the infrastructure needed to deploy renewable and low-carbon hydrogen at pace.  

On the publication of the Global Hydrogen Review, IEA Executive Director Fatih Birol said “The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals. But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.” 

COP29 and the Climate Action Innovation Zone  

The COP29 Hydrogen Declaration recognises the multiple regulatory, technological, and financial barriers to the development of hydrogen markets. It emphasises the urgent need to harmonise international frameworks, regulations and standards to create viable business models for the end-to-end value chain for hydrogen.  

The Hydrogen Transition Summit, taking place in the Climate Action Innovation Zone on 15 November, presents an engaging programme highlighting the challenges facing hydrogen projects and the global hydrogen economy. It will explore innovative solutions to overcome these barriers enabling the rapid growth of the Hydrogen ecosystem.  

During the opening panel, Mike Train, Chief Sustainability Officer at Emerson and Christian Stuckmann, Vice President of Hydrogen Development at Uniper, will speak alongside Kristin Tilley, Ambassador for Climate Change for the Government of Australia, and Leslie Labruto, Managing Director for Sustainable Finance at the Environmental Defense Fund, on the role of the private sector in supporting informed and ambitious policy. 

Moderated by Luca Corradi, Chief Technology Officer of the Net Zero Technology Centre, the panel ‘Improving scalability and affordability of green hydrogen production’ will explore cutting-edge production methods, hearing the perspective of business from Alicia Eastman, Founder and Managing Director of APC Investors and Co-Founder and Board Director of InterContinental Energy; Kevin Lynch, CEO at Source Galileo; and Francois Dao, Vice-President Middle East & Africa at EDF Renewables Middle East, joined by Wade Crowfoot, California Secretary for Natural Resources.  

To see the full agenda and to find out more about the Climate Action Innovation Zone: Climate Action Innovation Zone