Hydrogen economy reaches pivotal stage, says GlobalData

The development of the hydrogen economy has faced some setbacks recently, with demand not rising as quickly as anticipated back in 2020 when companies aggressively outlined their energy transition plans. While industries like steel, transportation, and power are working to decarbonise, driving increased demand for low-carbon hydrogen, the sector is now at a critical juncture, according to GlobalData, a leading data and analytics firm.

In its thematic report, "Hydrogen," GlobalData highlights that by 2030, approximately 83% of new low-carbon hydrogen capacity will come from green hydrogen plants, with the remaining capacity supplied by blue hydrogen. However, the contributions from purple and turquoise hydrogen are expected to be minimal. Currently, only around 2% of the total anticipated capacity is operational.

Ravindra Puranik, Oil and Gas Analyst at GlobalData, explains: “Low-carbon hydrogen will play a vital role in decarbonising energy-intensive industries. As a key feedstock in oil and gas processes, switching to low-carbon hydrogen offers a path to reducing emissions. Additionally, hydrogen’s high energy density makes it a promising alternative for decarbonising the transportation sector, particularly in marine and heavy vehicle applications.”

Historically, hydrogen has been used primarily in the oil and gas industry for refining processes and in petrochemicals. Demand from the oil and gas sector will continue to drive hydrogen consumption, but new demand is also emerging from industries like metallurgy, power generation, and transportation.

Puranik adds, “In recent years, there has been a surge in low-carbon hydrogen project announcements as industries commit to decarbonisation. Around 75% of these projects are still in the feasibility phase, which reflects the growing momentum for new plants as part of the global energy transition.”

For oil and gas companies pursuing energy transition goals, blue and green hydrogen offer significant growth potential. Many are investing in this energy source, with a particular preference for green hydrogen.

Puranik concludes: “Several oil and gas companies have already announced plans for blue and green hydrogen plants that are expected to be operational by 2030. However, to fully capitalise on this opportunity, the hydrogen distribution network—especially the pipeline infrastructure—must expand significantly. The global hydrogen economy is at a critical point, and its future will depend on how quickly the necessary infrastructure develops in the coming years.”