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Low-carbon hydrogen will play “a critical role in decarbonising the energy system” in all scenarios to tackle hard-to-abate processes and activities in industry and transport.
But the role of hydrogen will be complementary to growing electrification of the energy system and its importance will vary, according to the report which sets out scenarios for the global energy industry
Both types of low-carbon hydrogen – green from renewable energy or blue from natural gas with carbon capture and storage – are forecast to grow slowly over the next decade, reflecting the long lead times of projects and insufficient policy support.
As the costs of production fall and carbon emissions policies tighten, the report expects low-carbon hydrogen to compete with incumbent fuels, leading to faster growth in the 2030s and 2040s.
Source: BP
Producing blue hydrogen is generally cheaper than producing green hydrogen, but recent policy initiatives and higher natural gas prices in Europe and Asia have reduced this cost advantage.
Improvements in technology and manufacturing efficiency are expected to further lower the price of both renewable power and electrolysers, the report states.
As a result, green hydrogen will account for around 60% of low-carbon hydrogen in 2030 in all scenarios, increasing to around 65% by 2050.
The report anticipates hydrogen transport via pipelines from North Africa and between European countries, or by other sea routes.
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