WEMO 2025 (complet) - Flipbook - Page 15
W E M O 202 5
O U T LO O K
However, three regulatory developments are expected to
accelerate demand:
that hydrogen is the smallest molecule and that it is 昀氀ammable
when mixed with oxygen.
applications as in steel, heavy transport, and synthetic fuel
production are growing, particularly in Europe and the U.S., with
favourable policies like the EU’s Fit for 55 and U.S. tax credits.
This creates safety problems when hydrogen is produced
and used as well as transportation di昀케culties because of its
low density.
However, in 2024, green hydrogen development in Western
countries fell short of expectations 85,86 due to the following
issues that are detailed below:
• Green hydrogen development challenges in 2024:
Green hydrogen is hydrogen gas produced through
electrolysis of water, powered by renewable energy sources,
resulting in zero carbon emissions during production.
Low carbon hydrogen is the same with renewables and
nuclear electricity sources. In both cases no GHG are
emitted during hydrogen production. In this report we will
use the terms green hydrogen or low carbon hydrogen
interchangeably. In contrast fossil fuel-based hydrogen
(grey hydrogen) generates a high level of emissions. Green
hydrogen can serve as a clean energy carrier for decarbonizing
sectors where direct electrification is challenging.
√ Maritime Organization (IMO) approved global GHG
regulations for shipping, mandating zero-emission
fuels and GHG pricing by 2027. These measures could
drive early investment in hydrogen infrastructure.87
√ Technical and economic problems linked to the
sustainability and limited lifetime of electrolyzers,
di昀케culties in production scalability and high costs
√ RED III Directive (Renewable Energy Directive III) sets
binding targets for renewable fuels of non-biological
origin (RFNBOs), including green hydrogen.88
83https://www.iea.org/reports/global-hydrogen-review-2024
84In 2024 the global hydrogen demand (98.8% grey) was almost 100 Mt
85https://rmi.org/hydrogen-state-of-the-union-where-we-stand-in-2024/
86https://www.ft.com/content/d3102a61-368e-4ec6-8de3-833f4c62e7ba
√ Demand-supply cycle: a classic chicken-andegg problem between demand and production:
low demand due to high costs and regulatory
uncertainties deterring investment and, in turn,
the lack of production growth deprived of the costs
bene昀椀ts of scale e昀昀ects.
√ Policy E昀昀orts: EU’s Hydrogen Bank and U.S. tax
credits aimed to stimulate progress but faced delays
and uncertainties in implementation.
87https://maritime-innovations.com/imo-net-zero-regulations-2025-shipping-impacts/
88https://strategicenergy.eu/how-europes-oil-refiners-could-offer-a-route-to-scale-up-greenhydrogen/
89https://www.hydrogeninsight.com/production/global-investment-in-clean-hydrogenproduction-expected-to-grow-by-70-in-2025-iea/2-1-1829577
• Investments in electrolyzers are growing but
only 7% of announced capacity were launched.
In 2024, global investments in electrolyzers reached $2.4bn,
a 60% increase from 2023. 88 Clean hydrogen projects 89 that
reached Final Investment Decision (FID) have increased from
102 committed projects in 2020, representing around $10
bn in investment, to 434 in 2024, representing around $75
bn91. Despite this growth, only 7% of announced capacity
reached FID, with challenges such as technical difficulties,
high production costs and lack of demand.
90Clean hydrogen includes green hydrogen and blue hydrogen (grey hydrogen installations with
Carbon Capture and Storagre)
91https://hydrogencouncil.com/en/hydrogen-insights-2024/
WEMO 2025
Demand for green hydrogen remains concentrated in
traditional sectors like re昀椀ning and chemicals and represents
only 1.2% of the global hydrogen demand. 84 Emerging
√ Infrastructure gaps: Insu昀케cient pipelines and longdistance transportation issues.
√ EU SAF Mandate (ReFuelEU Aviation Regulation):
14
Hydrogen development is challenging83 Let’s recall
