WEMO24-Compiled Report-Interactive compressed (002) 4154-7882-8116 v.1 - Flipbook - Page 103
In comparison, low-carbon hydrogen is more competitive with
the production of e-methanol and e-ammonia. Its production
cost is 37% lower and it therefore requires a much lower subsidy
of €1.34/kg H2.
The “hydrogen recalibration" is underway, shifting hydrogen's
role from a universal decarbonization tool to a strategic
niche player. While initial ambitions were high, the reality of
production costs, competition with other decarbonization/
electrification technologies, transportation challenges and
regulatory frameworks has led to a more focused approach.
Hydrogen's potential now lies primarily in hard-to-abate sectors
like heavy industry and heavy transportation sectors (maritime
and aviation), where electrification faces challenges. This
strategic refocusing is prompting organizations to:
• Mobilize the necessary investments to create new low-carbon
hydrogen assets
• Finance the gap between prices and production costs of lowcarbon hydrogen
Regulatory schemes, particularly in the EU, play a crucial role
in driving this transition. By setting incorporation targets and
requirements for low-carbon hydrogen adoption and providing
incentives like TIRUERT in France, they create market pull for
greener solutions.
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However, deployment challenges remain. The availability of
competitive low-carbon electricity, rising interest rates, and
infrastructure limitations pose significant hurdles. Moreover,
the willingness to pay for low-carbon hydrogen varies across
sectors, influencing adoption rates.
Ultimately, the successful integration of low-carbon
hydrogen hinges on striking a balance between technological
advancements, cost reductions, supportive policies, market
demand and the willingness of consumers to pay. As we navigate
this complex landscape, it is crucial to focus on sectors where
hydrogen's unique technical, economic, and environmental
properties can make a tangible difference in the fight against
climate change.
The road to a hydrogen-powered future might be longer and
more nuanced than initially envisioned, but with strategic
planning and collaborative effort, it remains a vital pathway
towards a decarbonized economy.
WEMO 2024
A subsidy of €4.58/kg H2 would be necessary to make low-carbon
hydrogen competitive for industrial use in France; and a subsidy
of up to €5.53/kg H2 for road transportation would be required
to offset the opportunity cost.
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