True North Institute LLP reposted this
Clean Hydrogen Investment Framework. Today, I am posting a link https://lnkd.in/eB9k255r to a copy of our in-depth research on where clean hydrogen fits in the overall global energy transition and where the investment opportunities are (and are not). This was first published in February, but we have updated it and posted a more digestible one-page summary on the True North Institute website https://lnkd.in/eyDUSeCf The bottom line is that electrification and biofuels can supply, by 2050, perhaps as much as 65% of all secondary (end use) energy needs affordably and without major subsidisation. This leaves only two major solutions for the rest – carbon capture (CCS) and clean hydrogen, both being burdened with high costs of over $100/tonne of carbon abated, with some applications of CCS and H2 costing over $400/tonne as you can see in the table below. The only two scenarios are that this massive amount of emissions goes unabated or governments step in with policy action to support clean hydrogen (and CCS). Capital will only be allocated to clean hydrogen where investors see significant and permanent government policy initiatives that either limit or tax the use of the fossil fuel alternatives or provide subsidies such as those currently in place in the US through the IRA. This is far from certain. As you will see in our Clean Hydrogen Investment Framework, the most profitable investment opportunities will be in the lowest cost applications of clean hydrogen. We supply our 2050 forecast below for where the market will develop most if subsidies of the scale of those provided by the IRA remain in place over the long term. This 300 Mt forecast falls far short of the 600 Mt 2050 market size that the IEA and other experts forecast is required to meet net zero targets. The whitepaper points the reader to where the largest profit pools will emerge.