Demand for low-carbon hydrogen, which plays a critical role in helping the energy system to decarbonize, is expected increase by 10 times between 2030 and 2050 reaching an annual 300 million mt and 460 million mt, respectively, according to the annual Energy Outlook report of UK-based oil and gas company BP.
The report noted that low-carbon hydrogen growth is forecast to be relatively slow this decade, reflecting both the long lead times to establish low-carbon hydrogen projects and the need for considerable policy support to incentivize hydrogen use. However, the pace of growth will accelerate in the 2030s and 2040s as falling costs of production and tightening carbon emissions reduction policies allow low-carbon hydrogen to compete against fuels.
Meanwhile, the use of low-carbon hydrogen in iron and steel production is expected to account for around 40 percent of total industrial hydrogen demand by 2050, where it acts as an alternative to coal and natural gas as both a reducing agent and a source of energy. Along with the efforts of the governments towards decarbonization, steel producers have already started investing in green hydrogen within the scope of their carbon emission reduction targets, as SteelOrbis reported.